Today’s Trading Lesson | Stock Trading Today 7-9-16
Accepting risk versus taking risk is a hot topic in our coaching sessions…
Have you had a trading loss that was bigger than you planned? Of course, we all have. Why do we allow this to happen, and how do we prevent it?
First, we allow it, because of our ego. We believe if we don’t exit, the trade will come back. If we don’t exit, we don’t need to face the loss. We believe if the trade comes back, it will help validate our strategy.
We don’t realize accepting, and taking losses, helps determine if our strategy “works.” Losses are a part of the odds. True loss numbers, show if our edge makes sense.
Trading is math. You either have an edge, or you don’t. Your edge needs you to help, by sticking to the plan.
The second part is accepting versus taking risk. If you move a stop-loss or cancel it, you have not accepted the possibility of loss. Once you accept trading losses are part of your edge, exiting a losing trade is quite easy.
On the Tape Today...
$COP relative weakness and inside week. Looking for a breakdown. $38.14 first target. (see chart)
$PRU and $MET topping tails each with roughly $2 profit potential on a new short sale.
$ATVI peeked is head above new 52 weeks highs. Make sure it's over $40.50 for a new long.
$NKE down trend with five days of trading between $55-56. Momentum break out above 56 would trigger a short covering rally.
$COP 7-8-16 (Click to Enlarge)
U.S. stock futures waver as caution creeps in ahead of jobs report (5:23 am)
U.S. stock futures struggled for direction on Friday, with investors striking a cautiously optimistic tone ahead of the top-tier jobs data for June, hoped to show a rebound from May’s lackluster report.
“Another payroll Friday is upon us, and one which would have been a long awaited event had Brexit not intervened. It’s still important, as it was only last month (it seems a lifetime ago) that we saw the shock 38,000 print relative to 160,000 expectations,” analysts at Deutsche Bank said in a note.
The nonfarm payrolls report is due at 8:30 a.m. Eastern Time, and is expected to show that 170,000 new jobs were added in June, according to economists polled by MarketWatch.
At Deutsche Bank, the estimate, however, was a bit more pessimistic, with a forecast of 155,000. If that number holds true, the three-month average would drop to 105,000 from 116,000 previously and mark a significant downturn compared to 2015’s average of 229,000, the bank said.Read More — >>
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 7-8-16 | $COST
Stocks End Mixed; Will Strong Jobs Report Fuel Breakout For Lowe’s?
Exxon Mobil (XOM) and Chevron (CVX) lagged in the Dow as oil hit a two-month low. Costco (COST) was a top gainer in the Nasdaq 100 after reporting strong June sales.
West Texas intermediate crude oil for August delivery tumbled nearly 5% to $45.14 a barrel after government data showed U.S. crude stocks fell less than expected.
In economic news, private employers added 172,000 jobs in June, according to ADP. The data come ahead of Friday’s jobs report. Economists expect nonfarm payrolls to rise by 180,000, although the consensus estimate range is quite wide, from 130,000 to 235,000. The economy created a paltry 38,000 jobs in May.
Several stocks are setting up in bases and could try to break out if the market likes the jobs report. Retailer Lowe’s (LOW) added 0.5% to 80.48 as it works on a flat base with an 80.86 buy point.Read More — >>
Tape Reading the SPY ETF
$SPY one dollar rally after 3 pm showed short-covering on the tape. The bias is neutral. Yesterdays action continued to build out the four day trading range.
$212 is the resistance, this makes for roughly $2 profit potential. I don’t like the indices for anything right now other than a day trade. If you remove the BREXIT price action, we are trading between $206-210 for four weeks. No edge here, be stock specific.
Stocks in Play: $COST research on finviz.com
$COST NEWS: Costco Stock Breaks Out, Triggers Buy Signal On Strong June Sales
The membership warehouse operator said Thursday that June sales increased 3% to $11.33 billion. Costco also said sales for the 44 weeks ended July 3 increased 2% to $96.33 billion.
Comparable store sales, excluding negative impacts from gasoline price deflation and foreign exchange, rose 3% in June and 5% in the 44-week period. Including those impacts comps were flat in both periods.
Shares rose 4.9% to 163.70 in double normal volume to a 2016 high, clearing a 158.89 buy point from a double-bottom base with a handle. It’s also breaking past an alternate entry at 159.90, and is trading less than 4% below its all-time high set in December.Continue Reading…
Costco (COST) Stock Surges on Better-Than-Expected June Sales
NEW YORK (TheStreet) — Shares of Costco Wholesale (COST) are up 4.72% to $163.38 on heavy trading volume late Thursday afternoon after the membership-only warehouse club reported better-than-expected same-store sales for June.
Comparable-store sales were flat last month, beating analysts’ expectations for a 1.5% drop. Excluding certain items such as foreign exchange, same-store sales rose 3%.
“This type of performance warrants a premium valuation, in our view,” UBS wrote in a note cited by Barron’s.Read more — >>
Stocks to Trade 7-8-16 | Friday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: COST, RLYP, TWX, CMCSA
Negative last 20 and 5 trading days | closed 2% lower from the open: fslr, sm, aet, clr, vlo, mpc, psx, mur, trgp, pxd, eog, rrc, hes
Quarterly Order Flow:
Bullish Stocks to Trade: COST, LULU, CHTR, AMZN, PM, UNH, AEM, DLR
Bearish Stocks to Trade: fslr. sm < $24, vlo, tif, rcl < $65, ma
2x Normal Volume: WWAV, FSLR, AET, PEP, COST, PSX, LNC
Inside days: ko, mrk, abbv, sbux, mo, ppl, ca, tsn, tjx, amgn, mon, us, abc, ea