Today’s Trading Lesson…
Sometimes we make trading more challenging than it needs to be…
If you’re day trading, today’s price action is what matters. Sure we need a bias coming into the day, but if you’re not carrying overnights, your focus is today.
I just gave you the most simple trading plan on the planet. Did you catch it?
It didn’t have money management or entry signal but it works. I have been using it for years.
- Here it is: Determine order flow. Answer the question: “Are buyers or sellers definitely in charge?”
- Is there profit potential? In our coaching program we call this “room to go.”
- Place those stocks in separate watch lists: Longs and Shorts.
- Set two columns next to each other: Net Change and Change from the Open.
- When stocks in your long list are BOTH net change and change from the open positive trade those stocks, Let everything else go. (reverse for shorts)
Why does this work? You are eliminating one side of the market for starters. Too many traders attempt the pointless endeavor of picking tops and bottoms. If it’s in your long list, you are “long only” those stocks.
It works because it forces you to only trade stocks in sync with order flow. Today’s price action is in sync with the long term order flow. Change from the open is the key. It forces today’s order flow to be in sync with the longer term trend.
Give it a try. You’ll be glad you did.
On the Tape Today...
$MCD reached a saturation point yesterday but it's still set up as a great sell short. Sell a higher open (see chart)
$CVS shows no order flow but plenty of room to on a breakout. $98.50 buy stop has a target of $106.
$JWN bull flag still in play after 2 strong gaps higher. Minor resistance at $54, then a $58 target.
$CAT inside day on light volume sets up a nice trend day today. If it breaks lower (very possible) let it go. Above $84 look to add.
$MCD 8-23-16 (Click to Enlarge)
U.S. stocks set to bounce back as investors shrug off oil slide
Best Buy due to report earnings ahead of the bell
U.S. stocks were set for another upbeat trading day on Tuesday, as investors shook off another steep slide in oil prices and instead looked ahead to Federal Reserve Chairwoman Janet Yellen’s speech at Jackson Hole.
An update on manufacturing activity and new-home sales data due Tuesday morning were also in the spotlight.
The indicated gains follow lackluster action on Monday, when the mood turned cautious as oil prices tumbled.
Hopes faded that members of the Organization of the Petroleum Exporting Countries will agree on a production freeze deal next month.
Investors were also playing a waiting game ahead of the Fed meeting of central bankers at Jackson Hole, Wyo. on Friday, where Yellen will be watched for hints on what’s next for interest rates.
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 8-23-16 | $BBY Earnings
Stocks End Little-Changed; Zoe’s Kitchen Plunges After Hours
The major averages ended mixed in a nearly flat session Monday, as biotech stocks rose to help offset declines in the oil sector.
After the close, Zoe’s Kitchen (ZOES) plunged 10% following its quarterly earnings report. The fast-casual Mediterranean-style restaurant chain closed the regular trading session 10% off its 52-week high and has been consolidating since early April.
Elsewhere in the stock market today, biotech stock Medivation (MDVN) rocketed nearly 20% skyward after Pfizer (PFE) announced plans to buy the maker of cancer drugs for $14 billion. For its own part, Pfizer dipped a fraction.
Tape Reading the SPY ETF
$SPY five minute chart (below) shows the torture index futures are going through in August.
I have been preaching patience and keeping your buying power in your pocket. I remain strong on this idea. The market continues to coil as the meeting in Jackson Hole continues. Volatility always results from the quiet.
They say never short a dull market. I agree. There is little reason to be short other than the frustration the longs are tough.
Make aggressive decisions on stocks that have solid volume, let everything else go.
Stocks in Play: $BBY research on finviz.com
$BBY NEWS: Best Buy, GameStop Earnings Dogged By Target Report
Last week’s disappointing earnings report from discount retailer Target (TGT) has cast a shadow over this week’s reports from electronics retailers Best Buy (BBY) and GameStop (GME).
Last Wednesday, Target slashed its earnings expectations for the rest of the year, citing a “challenging environment.” Target said it has experienced meaningful pressure in electronics, marked by a double-digit comp sales decline. About a third of that pressure is due to declining sales of Apple (AAPL) products.
Best Buy ($BBY) Q2 Earnings Awaited: What to Anticipate?
Best Buy Co., Inc. BBY is slated to report second-quarter fiscal 2017 results on Aug 23. In the previous quarter, the company surpassed the Zacks Consensus Estimate by 25.7%.
Notably, the company has surpassed earnings estimates in all the trailing four quarters, with an average beat of 24.1%. Let’s see how things are shaping up for this announcement. Read More $BBY Earnings News — >>
Stocks to Trade 8-23-16 | Tuesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: SM, LDOS, TWLO, VRX
Negative last 20 and 5 trading days | closed 2% lower from the open: viab
Quarterly Order Flow:
Bullish Stocks to Trade: TWLO, CELG, HUM, AVGO, SWKS, AMGN, GS, LRCX, CHTR, BIIB, EOG, SM, JWN, BABA, CLR, PXD,
Bearish Stocks to Trade: tso, nclh, dish, fslr, bmy, mcd
2x Normal Volume: MDVN, DE, LDOS
Inside days: amat, emc, jpm, ms, ebay, rost, mar, atvi, met, rai, cog, tjx, ea, mo, cat, kim, wynn, lyb, ua, coh, kmx, rh, tsla, kors,