Today’s Trading Lesson | 7-11-16
A good trade for me, may not be a good trade for you.
Trading experience matters. We have to pick the right opportunity, at the right time. We need to trade, to learn how to trade, but we must pursue volatility and risk, commensurate with our experience.
If we tackle too much too soon, the odds are we will lose our money. Too often I have witnessed traders wanting to “drive” faster than they know how.
Many stocks are near Saturation Points today, they have moved far, fast. Are many of them still longs? Yes. Absolutely. That’s not the trading lesson. This conversation is centered around: “What if we break out and fail?” Do you have the experience and the decision making ability to exit in a disciplined manner?
Or will you be caught looking higher? Will you be caught off guard? Will you be biased because the news over the weekend was focused on all-time highs?
Long is a good idea. But are you prepared if it reverses? If you’re new, be honest about your answer.
On the Tape Today...
$UNP breakout over $89.50 held. Continue to be long today if the net change is positive. (see chart)
$SBUX multi day consolidation, looking for a trend day today.
$HON and $ATVI and EA 52 week highs.
$AA Alcoa kicks off earnings season today. The company reports after the close.
$HUM 7-11-16 (Click to Enlarge)
U.S. stock futures climb, with S&P near record high
Alcoa unofficially kicks off earnings season after market close.
Wall Street was set for firm gains on Monday, with the S&P 500 index within striking distance of a record high after a surprisingly strong jobs report last week fueled a stock-buying spree.
“U.S. markets look set to open at their best levels this year with the S&P 500 close to its record high of 2,137 as the ripple out effect from Friday’s payrolls number looks set to percolate through to the start of a new week and the beginning of a new U.S. earnings season,” Michael Hewson, chief market analyst at CMC Markets, said in a note.Read More — >>
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 7-11-16 | $HUM Relative Weakness
Stocks Close With Ample Gains, As Job Growth Surges
The stock indexes closed with gains of more than 1% Friday, solidifying a rally that began a week and a half ago.
The Nasdaq jumped 1.6%, the S&P 500 added 1.5%, and the Dow Jones industrial average improved by 1.4%. All three closed near session highs, as the market applauded a strong jobs report for June. Small caps outperformed, with the Russell 2000 bringing home a 2.3% advance.
The S&P 500 came a point away from making a new all-time closing high, falling just short of the record 2130.82 set in May of last year. The Dow reached its highest level in more than a year. The Nasdaq, which has lagged the other main indexes, is drawing closer to a key test below the 5000 level.
Compared to the previous session, volume was higher on the Nasdaq and lower on the NYSE, according to early figures from the day’s trading.
It was a bullish day for leading stocks, with the IBD 50 indicated as having increased more than 2%.Read More — >>
Tape Reading the SPY ETF
$SPY gap and go on Friday impressed with solid volume. All-time highs are within reach.
The BREXIT Bounce is real, but I don’t advocate getting aggressive on a new long. I believe we are going higher, but I would wait for a pause or a pull back for a new swing trade. A day trade long is still in play, but make sure the $SPY is above the open price.
Stocks in Play: $HUM research on finviz.com
$HUM NEWS: Humana Hit Harder on News of Department of Justice Meeting
The Aetna-Humana deal could fall through – and Humana is poised to feel more damage.
Both Aetna (AET) and Humana (HUM) saw a steep drop in trading prices Thursday afternoon on news that the companies will meet with the Department of Justice to discuss their merger.
Humana, though, saw a far steeper drop than Aetna, falling 11% since midday Thursday, as compared to Aetna’s 6% drop.
Not to mention, JPMorgan downgraded Humana from overweight to neutral.
“Of the ‘deal stocks,’ we have long held that only Humana shares have material downside if the DOJ were to block the pending acquisition by Aetna,” JPMorgan analyst Gary Taylor wrote in a note.
Others say that since Aetna’s purchase price of Humana comes at a premium to its trading price, it makes sense that Humana’s share price was hit harder by the news that the deal could fall through.Read More — >>
Aetna meets with Justice Department over merger with Humana $HUM
Aetna Inc (AET.N) executives met with top Justice Department antitrust officials on Friday to convince the government that asset sales it proposed would address potential competitive problems that could threaten its deal to buy rival Humana Inc (HUM.N), according to a source familiar with the matter.
Aetna’s plan to buy Humana would combine two of the largest providers of Medicare Advantage plans for elderly people, and investors are concerned that antitrust regulators could oppose the deal.
The Justice Department’s Antitrust Division is assessing both Aetna’s $34 billion merger as well as Anthem’s (ANTM.N) $44 billion deal to buy rival Cigna (CI.N). The two mergers, if they close, would reduce the number of big, national health insurance companies from five to three.Read More — >>
Stocks to Trade 7-11-16 | Monday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: CAR, SRPT, X, KMX, RIO, NVDA, FL, WDC, LEN, LRCX, NUE, RLYP, ROST, AMGN
Negative last 20 and 5 trading days | closed 2% lower from the open:
Quarterly Order Flow:
Bullish Stocks to Trade: MBLY, LRCX, UNP, SLCA, CNC, HON, EA, LULU, CVX, PM, AMZN, COST, CHTR, AEM,
Bearish Stocks to Trade: bidu, psx, ma, vlo, fslr
2x Normal Volume: AET, DD, CBG, SWHC
Inside days: cop, xom, wmt, cvx, mgm, wmb, pep, wba, mpc, dvn, hfc, mos, cog, slb, apc, mur, cnq, ar, pe, apa, rh, wynn