Today’s Trading Lesson…
‘Rich Dad’ author Robert Kiyosaki: If you’re investing for the long term, ‘you’re crazy’
In a live interview with MarketWatch, the best-selling author gives advice on how to get rich and what to invest in now.
On his prediction that in 2016 the world would see the worst stock market crash in history:
“We’re on the edge of a cliff right now. We have never been here before. If you’re still saving money when interest rates are negative, you’ve got to be crazy. When you’re investing for the long-term in the stock market, where there is no connection between stock price and reality, you’re crazy.”
His advice on how to get rich:
“The rich do not work for money. Most people do not understand that, because they’re taught to go to school and get a job for money. The rich don’t work for money.
On the Tape Today...
$FB pennant chart pattern sets up a nice volatility breakout. $128 is the target for a long. Below $122 is a change of trend. (see chart)
$NFLX continues to flirt with a $98 breakout. Don't get suckered in. Wait for a close on the daily chart above that level. If it holds, profit targets are every $2 ($100 and 102) Needs a tight entry and stop loss to justify a $2 target.
$CMG continues to show signs of accumulation (heavy volume pause after a down trend). Keep it in your watch list.
$SLB bull flag sets up a buy stop @ $81.83 with a target of $84
$FB 8-26-16 (Click to Enlarge)
Worries about Yellen’s Jackson Hole speech stop Dow futures in their tracks
U.S. stock futures little changed before speech at 10 a.m. Eastern
U.S. stock futures were locked in a holding pattern with just a few hours to go before a much-anticipated address by Federal Reserve chief Janet Yellen.
In a speech scheduled for 10 a.m. Eastern Time, Yellen may signal the Fed is ready to raise interest rates next month. Some analysts are sounding downbeat ahead of her address in Jackson Hole, Wyo.
“Today’s Jackson Hole gathering could be quite critical, with expectations heightened over if Yellen will provide clarity on when the Fed may break the trend of central bank caution,” said Lukman Otunuga, an analyst at FXTM, in a note.
“If there is a further disconnect between markets and the Fed then jitter and risk aversion could leave stocks vulnerable to heavy losses,” he added.
Stock Market Today: Heatmap of the S&P 500
Stocks Trading Today 8-26-16
Stocks End Slightly Lower As Investors Await Yellen Speech
Stocks finished lower Thursday ahead of a speech by Federal Reserve chief Janet Yellen that may give clues to the outlook for interest rates. Yellen is due to speak Friday morning to a meeting of the world’s central bankers in Jackson Hole, Wyo.
Her comments will be watched closely for clues as to whether the central bank might raise interest rates this year amid a series of strong recent economic reports.
On Thursday, orders for long-lasting durable goods rose more than expected in July and new claims for jobless benefits unexpectedly fell last week, suggesting the job market was picking up.
Discount retailers were among the day’s worst performers following weaker-than-expected earnings reports from Dollar General (DG) and Dollar Tree (DLTR).
Tape Reading the SPY ETF
$SPY price action is on hold until Janet Yellen’s speech today but the level to watch is $217.
There are two lines in the sand here, a break below $217 and short-sellers will dip their toes in, if $217 holds, the bulls will feel the up trend is still intact.
The $SPY is in a trading range, Yellen or not, if you take a look at yesterday’s trading lesson we taught how to recognize the “box” and what to do with it.
This is a potential change of trend, the key word there is potential.
Continue to be patient and be a stock picker until after Labor Day.
Stocks in Play: $DG | $DLTR research on finviz.com
$DG | $DLTR Earnings NEWS: Dollar General, Dollar Tree report weak sales growth
NEW YORK (AP) — Discount-store rivals Dollar General and Dollar Tree reported weaker-than-expected sales figures Thursday, as struggling lower-income shoppers spent less at their stores.
Shares of both companies fell sharply.
Dollar General said a cut in food-stamp benefits in several states kept its customers away. It said sales at stores open at least a year, which is considered an important measure of a retailer’s health, rose 0.7 percent in its second quarter. That’s far below the 2.7 percent increase analysts were expecting, according to FactSet.
At Dollar Tree, the company said food stamp cuts had less of an impact on its sales but said some of its Family Dollar customers were “under pressure.” Dollar Tree said sales at stores open at least a year rose 1.2 percent in its second quarter. Analysts expected growth of 2.4 percent, according to FactSet.
Dollar store results suffer from pressures on low-income consumers
Dollar General and Dollar Tree say their low-income customers have been impacted by cuts in food stamp programs
Dollar General Corp. and Dollar Tree Inc. say pressures on their core lower-income shoppers contributed to the same-store sales misses that both retailers reported.
“[W]hen you really start breaking it down and you look at that core consumer that we serve on the lower economic scale that’s out there, that demographic, things have not gotten any better for her, and arguably, they’re worse,” said Todd Vasos, chief executive officer of Dollar General.
Stocks to Trade 8-26-16 | Friday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: RAX, RH
Negative last 20 and 5 trading days | closed 2% lower from the open: dg, sig, dltr, esrx, stj, hznp, agn, celg, tso, car, myl
Quarterly Order Flow:
Bullish Stocks to Trade: TIF, SWKS, SM, LRCX, AVGO, BABA, PXD, CLR, JWN, BHI, MAR, ADBE, LNG, OKE, VMW, DVN
Bearish Stocks to Trade: nclh, fslr, dish, gild, mcd
2x Normal Volume: STJ, DJ, MYL, DLTR, ESRX, SIG, MDVN, CRM, TIF, RAX
Inside days: jci, fb, teva, jpm, kr, ms, aal, qcom, hal, hlt, oxy, wfm, ibm, sti, nbl, ual, bidu