Today’s Trading Lesson…
Jesse Livermore and Reading the Tape
Tape reading is not as popular as it was in the old days. Computers have made us lazy traders.
When I say the “old days,” I am referring to before 2007.
Some smart, savvy traders however, have adapted and are skillfully implementing tape reading in a much different way today. Chart reading is an element of tape reading, but they are not the same.
Our goal is to elevate from chart reader to tape reader. Learn how Livermore did it.
On the Tape Today...
$USO textbook Saturation Point. Sell the higher open. Look at that exhaustion volume! (see chart)
$LB solid breakout with volume. Initial profit target on a buy stop above yesterday's high is $80.25.
$MO 3 melted candles and inside day. Looking for a breakdown below $66 today with $65 target.
$VLO ascending wedge. Looking for a breakout. Minor resistance at $56- ultimate target is $62.
$USO 8-19-16 (Click to Enlarge)
U.S. stocks poised for losses as Fed rate-hike debate rages on
Applied Materials rallies premarket after earnings.
Wall Street was set for a weak session on Friday, capping off a volatile trading week dominated by chatter about whether the Federal Reserve will raise interest rates as early as September.
Earlier this week New York Fed President William Dudley also hinted a September move was possible, while Atlanta Fed boss Dennis Lockhart talked about “at least one” more increase this year.
Minutes from the Fed’s July meeting out on Wednesday, however, showed an almost even split between supporters of another rate hike in the near-term and others who would wait for more confidence that inflation was stirring.Read More — >>
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 8-19-16 | $CMG Remains Bearish
Stocks Reverse Higher; Wal-Mart Leads Dow, But Caterpillar Lags
Stocks reversed from small losses to finish with small gains Thursday as crude oil prices surged and Wal-Mart (WMT) gave the Dow a lift.
Fiber optic, oil and solar stocks were among the day’s biggest gainers in the stock market today, as West Texas intermediate crude prices surged 3% to above $48 a barrel. But office supply retailers, newspapers and dairy products stocks lagged.
Wal-Mart pared an early advance to less than 2% but still ended the session with the Dow’s top advance. Shares hit a 52-week high intraday. The world’s biggest brick-and-mortar retailer reported Q2 results that topped views and raised its full-year earnings outlook.
But Caterpillar (CAT) fell more than 1% after the heavy equipment maker reported disappointing retail machine sales for the three-month rolling period ended in July.
Why Chipotle ($CMG) Failed to Hold On to Its Gains after 2Q16 Results Although Chipotle Mexican Grill’s (CMG) 2Q16 revenue and EPS (earnings per share) were lower than expected, its stock rose 5.7% after the announcement of 2Q16 results on July 21, 2016.
The announcement of improved traffic and SSSG (same-store sales growth) in the first two weeks of July 2016 increased investors’ confidence, which led to a rise in Chipotle’s share price.
Tape Reading the SPY ETF
$SPY closed on the high after reversing at noon.
This price action highlights the reason I tell coaching clients to follow the order flow. Whether you are scalping or position trading there is no solid reason the fight the trend.
Eliminate one side of the market and trading becomes 200x easier. If price action begins to retrace during bullish order flow, find weak stocks to short – which you will most likely need today.
Stocks to Trade 8-19-16 | Friday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: WMB, SM, MUR, TRGP, OKE, DVN, HAL, APC, NOV, YELP, CIG, CAR
Negative last 20 and 5 trading days | closed 2% lower from the open:
Quarterly Order Flow:
Bullish Stocks to Trade: SM, TRGP, DVN, CLR, SWKS, PXD, EOG, EA, KSS, UNP, JWN, IBM, AVGO, AET, AMGN, BA, BABA, AMZN, FB, CHTR
Bearish Stocks to Trade: cf, rcl, de, gild, mcd, bmy, fslr
2x Normal Volume: VRX, HOG, LDOS, HAIN, LB
Inside days: bmy, hlt, fb, dal, nvda, low, crm, sbux, bby,vlo, usb, wfm, luv, mo, mdt, tjx, pypl, kss, ccl, mcd, rai, ma, pm, axp, lmt, jwn, vof, stx, ua, coh, esrx, agn, mon, bbby, amzn