Today’s Trading Lesson 7-13-16
The market is in a tough place to initiate a new long. What is the reward potential? Is the market a long? Yes. But how do you justify accepting new risk?
I am not talking about a day trade. You must day trade long. Look at yesterday. After a half hour of profit taking, the $SPY found a bid and rallied for one dollar.
Don’t confuse the following scenarios:
The up trend is slowing down/has moved too far too fast – therefore it’s not a long so let’s short it with a tight stop loss.
The market/stock is in a down trend, let’s short it.
A stock with low probability to follow through higher, because of a recent rally, is not a short sale. You can, and you might make money, but it is not a great trading idea.
On the Tape Today...
$VLO bear flag in play. (see chart)
$AIG topping tail and gap fill setting up a sell-short today.
$COF five days of buying into 50 sma resistance. Strong sector this week, but if the market weakens a spot to look for a short.
$WDC head and shoulders bottom. Needs to stay above $50 for the long to remain valid.
$VLO 7-13-16 (Click to Enlarge)
U.S. stock futures take breather after record run
Fed’s Beige Book to grab the spotlight…
U.S. stock futures struggled for direction on Wednesday, with investors pausing for breath after pushing the S&P 500 and Dow industrials to fresh all-time highs.
The small moves come after another upbeat trading day on Wall Street on Tuesday, when the S&P SPX, +0.70% and Dow DJIA, +0.66% both rose 0.7% to close at record highs, supported by a rally in energy shares and stronger-than-expected earnings from Alcoa Inc. AA, +0.47%
Economic news: With few prominent earnings on tap for Wednesday, attention is turning Federal Reserve news with the Beige Book survey of current economic conditions due at 2 p.m. Michael Hewson, chief market analyst at CMC Markets, said the report could reinforce the view that the U.S. economy is doing well and “in so doing start to shift the dial in terms of the timing of a potential U.S. rate rise.”Read More — >>
Continue reading on marketwatch.com
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 7-13-16 | $GS Rallies
Dow, S&P 500 Hit Record Highs; Nike, Goldman Lead Dow; Airlines Soar
Stocks rallied again Tuesday as higher volume kicked in, suggesting institutional investors were active buyers. Goldman Sachs and Nike led the Dow industrials to a record high, while major U.S. airlines soared on an upgrade.
Energy stocks led the upside in the stock market today, thanks to a 4.5% jump in West Texas Intermediate oil prices to $46.79 a barrel. Airlines and shoe and apparel makers also outperformed.
Airlines soared on an upgrade from Deutsche Bank, which raised its ratings on American Airlines (AAL), Delta Air Lines (DAL) and United Airlines (UAL) to buy from hold. They rose 11%, 6% and 9%, respectively, in fast turnover.
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Goldman Sachs (GS) was the biggest mover on the Dow, rising 3% in heavy volume to retake its 50-day moving average. The investment bank laid off 55 employees in its fourth round of cuts this year. Q2 earnings are due July 19.
Nike (NKE) rose 2% in slow trade. The stock is now 4% above its 50-day moving average and 4% below its converged 200-day line.Read More — >>
Tape Reading the SPY ETF
$SPY game plan remains the same. Day trade long. Very tough to justify a new swing trade long here.
After this much momentum in such a short time, buying the intra day dips is the best play for now. The market is due for profit taking but that doesn’t make it a short sale.
Stocks in Play: $GS research on finviz.com
$GS NEWS: Goldman Sachs (GS) Stock Higher, Announces New Job Cuts
NEW YORK (TheStreet) — Shares of Goldman Sachs (GS) are climbing 1.04% to $151.95 in early-afternoon trading on Monday as the New York City-based bank will cut 55 more jobs in New York, Bloomberg reports.
This fourth round of job cuts pushes the total number of layoffs to more than 400.
The dismissals will occur between August 31 and December 29, Bloomberg adds.
Goldman Sachs has been reducing its workforce to contend with a decline in trading and deal making.Read More — >>
Stock Trading Today 7-13-16 | Wednesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: STX, AAL, PAA, UAL, MUR, RDC, CLR, HES, DO, DVN, JOY, WMB, X, AR, GLNG, APA, UA, SRPT, ABC, HRI
Negative last 20 and 5 trading days | closed 2% lower from the open:
Quarterly Order Flow:
Bullish Stocks to Trade: CLR, DVN, NFX, APC, CAT, CAR, LRCX, MAR, CVX, CNC, IBM, UNP, EA, HON, LULU, COST, CHTR, AMZN, AEM
Bearish Stocks to Trade: vlo, ma, psx
2x Normal Volume: STX, PAA, AAL
Inside days: KO, PG, JNJ, PEP, TWX, DHR, MBLY, ESRX, CAR, AMGN, YELP, D, TSN, CAST, ACAD