Today’s Trading Lesson | 7-19-16
Should you day trade or swing trade?
This is easily the most common question I get. Myself, a full-time day trader for 16 years, and owner of two prop firms in NYC, I can give you the answer with the most clarity.
First let me say day trading is an incredible opportunity and lifestyle, if you have the time and money to learn. Time is obvious but the money aspect is about paying your bills until you learn. Whatever amount of months you have in your mind, increase it by 50%.
The greatest miscalculation we all make is underestimating the size of the task.
There are four key phases that lead to trading success:
- Learn what to do. Develop or learn your initial strategy.
- Place trades, learn and preserve capital.
- Make changes based on trading feedback.
- Learn to scale bigger after you validate your strategy through real trades. (At least 3 consecutive months or at least 200 trades)
Stage number two is learning what not to do. Stage number four is the money-making stage. In my experience, which means myself included, we all jump to stage four from the first day. We try to make money too soon.
That may sound ludicrous but we need experience to trade successfully. To get that experience requires real trades with the goal of getting feedback. Feedback about your strategy and feedback about your ability to follow it.
Learn how to trade first, then try to make money.
Should you day trade or swing trade? Well…what other life responsibilities do you have? Where are you in the four phases?
On the Tape Today...
$YUM profit taking decline, gap fill and hammer type candlestick sets up a buy today. (see chart)
$AMGN continues to channel and fail in a huge $20 range between $145-165. Worth watching.
$NKE short-covering rally into resistance. Look for a sell short today. Swing trade target of $55.75
$NFLX and $YHOO trading lower after earnings reports. NFLX hit hard.
$YUM 7-19-16 (Click to Enlarge)
U.S. stock futures pull back, with Goldman Sachs earnings on tap
U.S. stocks were poised to open lower Tuesday, on the heels of record closes for major indexes, as investors braced for a big batch of earnings from companies such as Goldman Sachs Group Inc. and Lockheed Martin Corp.
Oil prices CLQ6, -0.20% traded moderately lower, while gold prices GCQ6, +0.29% rose $5, or 0.4%, to $1,334.20 an ounce. Data on housing starts and building permits for June are on the economic calendar, both due at 8:30 a.m. Eastern Time. The larger focus for investors will be a sizeable batch of earnings. Stocks to watch:
The big names reporting earnings ahead of the bell are Goldman Sachs GS, +1.05% Philip Morris International Inc. PM, -0.61% UnitedHealth Group Inc. UNH, -0.41% Johnson & Johnson JNJ, +0.11% and Lockheed Martin Corp. LMT, -0.27%.Read More — >>
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 7-19-16 | $GS Earnings
Apple, Tesla Lead Nasdaq To Big Gains, But Netflix Sinks After Hours
tocks added to last week’s gains Monday with the Nasdaq leading the key market indexes as Apple (AAPL), ARM Holdings (ARMH) and Tesla (TSLA) scored big gains. But Netflix (NFLX) fell sharply after hours.
The Nasdaq rose 0.5%, the S&P 500 added 0.2% and the Dow Jones industrial average edged 0.1% higher. Volume was slightly lower across the board vs. Friday, according to preliminary data.
Netflix fell sharply in extended trading after the subscription streaming service reported Q2 earnings that beat, but revenue that missed, forecasts. It earned 9 cents on nearly $2 billion in sales. Views were for 2 cents on $2.11 billion. Netflix added 1.7 million subscribers during the quarter, well below the 2.5 million expected.
Automakers, discount retailers and chip stocks outperformed in the stock market today, while toymakers, nonalcoholic beverage and truck stocks lagged.Read More — >>
Tape Reading the SPY ETF $SPY trading lower off disappointing earnings yesterday.
The market is due for a reasonable decline, for no other reason than profit taking. The $SPY rally of $19 in just three weeks is incredible.
Profit taking down to the $210 area is what to expect. If you’re looking for a new place to get long, I would wait for that level.
Stocks in Play: $GS research on finviz.com
$GS NEWS: What to expect from Goldman Sachs earnings | Analysts expect higher profit, but lower revenue
Goldman Sachs Group Inc. reports second-quarter results before the market opens Tuesday. Here’s what you need to know:
Earnings: Analysts polled by Thomson Reuters expect earnings of $3 a share, up from $1.98 a year ago. But 2015’s results were dragged down by a $1.45 billion legal charge for a government settlement over mortgage securities.
Revenue: Revenue is expected to slip to $7.58 billion, from $9.07 billion last year, amid a slowdown in underwriting and deals, two Goldman GS, +1.05% . But the big-ticket line items are fixed-income and equities; results at Citigroup C, +0.54% J.P. Morgan Chase JPM, -0.42% , which reported last week, were both buoyed by a flurry of pre- and post-Brexit trading.
While its early in the quarter, J.P. Morgan said trading now seems to have normalized. That all bodes well for Goldman on this front.Read More — >>
Stocks to Trade 7-19-16 | Tuesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: WMB, SCTY, STX, JOY, TSLA, AER, TRGP, MOS, BHI, PAA, BABA, SM,
Negative last 20 and 5 trading days | closed 2% lower from the open: prgo
Quarterly Order Flow:
Bullish Stocks to Trade: TSLA, FB,M BABA, CAR, HD>$136, MBLY, WDC, COST, EA, CLR, UNP, YUM, AMZN, IBM (earnings), AEM, CAT, AMGN, CHTR, CVX
Bearish Stocks to Trade: prgo, psx
2x Normal Volume: ARMH, VMW
Inside days: wfc, intc, c, ms, jpm, vz, usb, orcl, dal, ko, x, gild, abbv, v, luv, glw wba, bmy, ma, bk, ctsh, ua, ca, bbt, cof, dhi, ip, agn, etf, phm, hrb, amgn, cag