Today’s Trading Lesson | 7-25-16
This is exactly why I don’t advocate new traders use oscillators.
Too many traders on the coaching calls looking to short the all-time highs. Overbought does not mean sell short. It means the stock has reached an extreme moment of buying.
Lower odds of continuing higher is dramatically different than a high probability short sale.
Sure you can try it, and manage risk like a pro. At the end of the week you will even feel proud. Your discipline prevented you from losing too much money.
What you never realize, is the money you lost, by not being long.
On the Tape Today...
$DIS declining 50 sma sets up a short sale this week with a target of $94 (see chart)
$AMGN breakout over $165 still in play. If it closes on the daily chart below this level, exit.
$GS inside, inside day, holding the gap higher at previous resistance. Look for a trend day today.
$EA converging 20 and 50 sma and inside day, sets up a long with $80 target.
$DIS 7-25-16 (Click to Enlarge)
U.S. stock futures waver as investors gear up for ‘pivotal’ week
U.S. stock futures struggled for direction on Monday, as investors stayed cautious ahead of a busy news week with earnings kicking into high gear and more than a dozen central banks holding policy meetings.
The Dow Jones Industrial Average YMU6, +0.03% rose 5 points to 18,484, while those for the Nasdaq-100 index NQU6, -0.03% slipped 0.50 points to 4,656.75.
“Markets are starting off a potentially pivotal week in a cautious approach as traders choose to keep their powder dry ahead of the key risk events later in the week,” said Richard Perry, market analyst at Hantec Markets, in a note.
“With economic growth data along with the Fed and the BOJ both announcing monetary policy in the coming days, it seems as though traders are currently reluctant to take too much of a view,” he added.
The Federal Reserve kicks off its monetary policy meeting on Tuesday and will announce its decision on Wednesday at 2 p.m. Eastern time.
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 7-25-16 | $VZ-$YHOO Deal
Stocks Rally For 4th Week; Dow’s Apple, Caterpillar, McDonald’s On Tap
Quarterly earnings once again took center stage, as stocks held solid gains into the close Friday, extending the major market indexes’ win streak for a fourth straight week. All eyes will be on Dow components Apple (AAPL), Caterpillar (CAT) and McDonald’s (MCD), which report Tuesday.
The Nasdaq and S&P 500 each rose 0.5%, while the Dow Jones industrial average added 0.3%. Volume dipped slightly across the board vs. Thursday, according to preliminary data. For the week, the Nasdaq was the winner with a 1.4% gain; the S&P 500 and Dow climbed 0.6% and 0.3%, respectively.
Alcoholic beverage, transportation and software makers led the upside in today’s stock market action, while shoe and apparel makers, homebuilders and oil stocks lagged. West Texas Intermediate crude oil futures slid 1.2% to $44.23 per barrel.
Boston Beer (SAM) scored the biggest gain in the alcoholic beverage group with a 15% spike in massive trade. The stock reclaimed its 200-day moving average for the first time in nearly nine months after the maker of Samuel Adams and Twisted Tea issued a strong Q2 report.
Tape Reading the SPY ETF
$SPY volume at all-time highs continues to diminish. It could be the summer or it could be lack of interest. The reason doesn’t matter, we can look back in three months and figure it out. Right now long is the correct play. Calling a market top is a complete guess and a losers game.
Is the $SPY overbought? Yes, but it is not a short.
If and when the market gets significant profit taking, be short weak stocks.
Stocks in Play: $YHOO research on finviz.com
$YHOO NEWS: Verizon Acquiring Yahoo! Is Great in Theory, but It Could Easily Become a Huge Mess
The telecom giant could derive many synergies from a deal for Yahoo! But integration challenges and Yahoo’s rapidly declining fortunes could quickly result in buyer’s remorse.
Verizon (VZ) has long been viewed as the front-runner to buy Yahoo!‘s (YHOO) core business. The telecom giant has deep pockets, is obsessed with creating a digital media empire and is unique among reported Yahoo! bidders in its ability to combine Yahoo! with another major online media asset — namely, AOL — to obtain scale and cost synergies.
It looks like Verizon is getting its wish — the New York Times, the Wall Street Journal and Bloomberg report Big Red has struck a $4.8 billion deal to acquire Yahoo!’s core operations, and that it will be announced on Monday. Reports also generally state the deal includes real estate, but not some of Yahoo!’s patents, which will be sold separately.
Verizon to announce $5 billion deal to buy Yahoo on Monday: source
The announcement will come before the start of New York trading hours, the source added.
The deal will end months of uncertainty about Yahoo’s future after the company announced plans to review strategic alternatives in February.
Stocks to Trade 7-25-16 | Monday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: SRPT, NVDA, HLF, YUM, MBLY, ETP, CAR
Negative last 20 and 5 trading days | closed 2% lower from the open: skx, swks, aer, cf, de, nov, do, hes
Quarterly Order Flow:
Bullish Stocks to Trade: HLF, YUM, MBLY, UNP, SLB, WDC, CHTR, SLCA, IBM, AMGN, LRCX, KMX, UNH, HD, FB, COST
Bearish Stocks to Trade: skx, cf, cop, vlo, bidu, nflx
2x Normal Volume: PYPL, SKX, OLN, LUV, RLYP, SWKS, JOY, HON, COF
Inside days: kmi, ms, dal, gild, baba, ea, amat, jci, tsm, bk, ma, csx, axp, fast, ccl, bby, mat, low, apc, rrc, gis, esrx, rai, hd, nue, lng, adbe, twlo, hog, gs, ip, k, kmx, cost