Today’s Trading Lesson | 8-3-16
A heated but healthy coaching call yesterday with a new day trader…
She seems to be under the impression that trading stocks, options, futures and forex with a $4300 account is smart. I heartily disagree.
Her logic was “I need to be where the action is, I need to put my capital to work smartly…”
I have been in the prop trading world for 16 years, the traders who make the most money are incredibly good at something, usually one thing.
She is wrong. I hope she listened or she will be wasting the next six to eight months, if she lasts that long.
On the Tape Today...
$WMB solid relative strength and volume yesterday after earnings, looking for one more day (see chart)
$LMT well-bid daily chart, new long for a day trade and target of $259.82
$PM two inside days, not calling direction today but an expansion in volatility, look for a trend day today.
$LYB inside day breakdown yesterday, look for one more day lower, target is $69.82
$WMB 8-3-16 (Click to Enlarge)
Dow eyes an 8th day of losses as U.S. stock futures point lower: Clorox, Humana results on deck
U.S. stock futures pulled lower Wednesday, setting up Dow industrials for their eighth loss in a row, as investors waited for fresh readings on the services sector and a precursor to the closely watched jobs report.
In the runup to this week’s marquee economic report — the July payrolls report due Friday — investors on Wednesday will receive ADP’s update on private-sector hiring.
“The labor market remains an area of concern for the Fed, and despite alluding to the possibility of a rate hike this year, if labor market data is poor we are unlikely to see a rate hike over the remainder of 2016,” said Ana Thaker, market economist at PhillipCapital UK, in a note.
Corporate reports: Ahead of the bell, quarterly earnings results are expected from health care insurer Humana Inc. HUM, -0.94% and chemicals maker Clorox Co. CLX, -0.61% .
Also reporting early are media giant Time Warner Inc. TWX, -1.25% , office supplies chain Office Depot Inc. ODP, -6.27% and accessories retailer Kate Spade & Co. KATE, -6.33% .
Etsy Inc. ETSY, +7.17% shares could be active after the crafts clearinghouse late Tuesday reported a wider second-quarter loss due to foreign exchange effects but posted growth in revenue and users.
Video game maker Electronics Arts Inc. EA, +0.20% issued a report showing a smaller-than-expected decline in quarterly revenue and profit despite lacking a major new release during the period.Read More — >>
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 8-3-16 | $HUM
Dow Falls For 7th Straight Session; Fitbit Jumps After Hours
Stocks ended lower Tuesday after weaker-than-expected auto sales and another drop in oil prices raised concerns about the economic outlook.
Meanwhile, oil prices fell more than 1% to less than $40 a barrel, crude’s lowest level since April.
In the stock market today, the Nasdaq lost 0.9%, the S&P 500 fell 0.6%, and the Dow Jones industrial average slipped 0.5%. Volume rose 18% on the Nasdaq and 13% on the NYSE compared to Monday, according to preliminary data.
After the close, Fitbit (FIT) was up 6% after the maker of fitness tracking devices reported profit of 12 cents a share in Q2, a penny above views. Sales totaled $586.5 million, also better than expected, on strength in the U.S. and emerging markets. Fitbit on Tuesday finished 70% below its 52-week high. It’s also well below its June 2015 IPO price of 20.Read More — >>
Tape Reading the SPY ETF
$SPY profit taking yesterday. Nobody panic. The market is allowed to have a red candle.
Price action closed above the 20 sma and the buying order flow is still firmly in charge. This is where you need to know if you’re an investor or a trader. Long-term the $SPY remains above the multi year breakout, still good there.
For traders, a retracement is healthy. If you are a long only trader, it’s OK to be in cash.
I am still looking long, not worth the short sale until we are in a confirmed down trend.
Stocks in Play: $HUM research on finviz.com
$HUM NEWS: Humana (HUM) May Beat Q2 Earnings: Will the Stock Gain?
Why a Likely Positive Surprise?
Our proven model shows that Humana has the right combination of two key ingredients to beat estimates.
Zacks ESP: Humana has an Earnings ESP of +0.44%. This is because the Most Accurate estimate is pegged at $2.27, while the Zacks Consensus Estimate stands at $2.26. A positive ESP is a meaningful and leading indicator of a likely earnings beat.
Zacks Rank: Humana holds a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Currently, the stock is trading at $171.18. We expect the release to lead to stock movement.
What is Driving the Better-Than-Expected Earnings? CONTINUE READING — >>
Stocks to Trade 8-3-16 | Wednesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: BIIB, WPZ, WNR, CVS, NEM, HFC, CAH
Negative last 20 and 5 trading days | closed 2% lower from the open: dish, kss, dal, m, rh, rcl, luv, skx, lyb, vfc, ua, sig, wdc, do
Quarterly Order Flow:
Bullish Stocks to Trade: BIIB, WPZ, SHPG, GRUB, AEM, AMGN, UNH, CELG, IBM, COST, CAT, STT, AMZN, FB, HD, LRCX, AAPL, VMW
Bearish Stocks to Trade: rcl, luv, skx, sig, gild, do, juno, dis, de, hig, cop, hes
2x Normal Volume: WMB, DISH, STX, CVS, IONS, WPZ, BIIB, RCL, EMR, HIG, AMGN, ETN, TRGP, EXPE
Inside days: ions, hpe, nflx, bp, v, baba, yhoo, hig, nwl, pm, etp, de, ma, oke, rlyp, ibm, eog, ntap, ip, wynn