Today’s Trading Education…
How do you trade, if your bias is long, but stocks trade lower?
If you’re trading longer than six months, I’m sure you have experienced this dilemma. You diligently scan for trading ideas, you build a solid list of stocks to buy.
You feel confident. you’re ready to buy, and stocks trade lower… As the first hour unfolds, you swear the stock market is messing with you.
What do you do?
The common mistake is to go with the flow. Short-sell because of the day’s sell-side bias. Struggling traders look to their list and sell. I’m not going to lie, I made this mistake too.
Short-selling strong stocks is a bad trade. You may produce a winner once in a while but in the long-run, the idea is a loser. If you want to be long a stock, be long. If the stock market (and your stocks) trades lower, let it go, and wait for a spot to buy.
I know, I know, there will be a day you regret not shorting. “But Pete, everything was a short-sale today…” I get it, but you’re not trading for one day.
Find a bias, long or short, and make a commitment.
On the Tape Today...
$SLB steady volume on the recent decline. $75 sell-stop, buy to cover @ $72. (see chart)
$TSLA short-term bear flag and "swing high." $204 sell stop, cover to buy @ $195. If t trades higher let it go, no reason to be bullish.
$EA nearly triple inside day set up, look for an explosion and solid trend day. Minor resistance @ $84. If it breaks lower, day trade only, order flow remains bullish.
$GPS swing trade $22.50 sell-stop, add to the short sale <$22, cover to buy @ $18.75.
$SLB 9-21-16 (Click to Enlarge)
Stock futures climb on Fed day; BOJ’s stimulus shift rallies banks
After Bank of Japan surprise, investors want to see if the Fed will keep the market happy…
Wall Street stocks were poised for opening gains Wednesday, keying off rises in global equities after the Bank of Japan overhauled its monetary policy framework, and with a Federal Reserve interest rate decision ahead.
Stronger oil prices also helped underpin gains for stock futures.
“A steeper yield curve provides the motivation for banks to encourage customers to borrow, and is typically associated with a strengthening economy,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor, in a note.
As financial companies tend to borrow short and lend long, the BOJ announcement provided “rocket fuel” for Japan banks to rally, she added.
Continue reading on marketwatch.com
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 9-21-16 | FOMC Rate Policy Decision
BOJ rate surprise lifts world stocks ahead of Fed
World stocks rose on Wednesday, led by a surge in bank shares, while the yen weakened after the Bank of Japan surprised markets by adopting a target for long-term interest rates.
With the global economy showing few signs of rebounding and investors fretting about the limits of major central banks’ easing, the BOJ’s move came as a welcome relief for markets.
The focus now shifts to the U.S. Federal Reserve policy decision later on Wednesday, with weaker-than-expected economic data prompting investors to call off bets on a rate hike.
CONTINUE READING ON REUTERS.COM
Tape Reading the SPY ETF
$SPY trading range continues into Wednesday’s trading, as volume dried up into the FOMC announcement.
Futures are trading higher after BOJ decision. So what does that mean for equity traders? I remain short-term bearish.
Today’s higher open (6:30 am) does not change what I see on the tape. The stock market could see a one day rally, but I see too many stocks closing on the lows and breaking support levels.
I am looking to short weak stocks.
Stocks in Play: $LEN research on finviz.com
$LEN NEWS: Lennar Rises Above Q3 Views, But Housing Data Sinks Sector
Homebuilder Lennar (LEN) on Tuesday reported third-quarter earnings per share and sales that topped analyst estimates, but many stocks in the sector fell at the open on weaker housing-start data in August.
Lennar said that earnings rose 5% to $1.01 a share, topping estimates for 89 cents. Revenue rose 14% to $2.8 billion, above forecasts for $2.68 billion.
The Commerce Department on Tuesday said housing starts in August fell from July to an annualized rate of 1.142 million, worse than expected.
Lennar’s deliveries during the quarter rose 7%, while new orders rose 8%. The company said deliveries increased in all its homebuilding segments except in Houston, which suffered from “less demand in the higher-priced communities driven by volatility in the energy sector.”
Stocks to Trade 9-21-16 | Wednesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: SRPT, CLVS, IONS, GILD, ACAD
Negative last 20 and 5 trading days | closed 2% lower from the open: pbf, sm, len, rh, tmus, hog, vrx, agn, cbs, rrc, mbly
Quarterly Order Flow:
Bullish Stocks to Trade: CLVS, STT, APC, MA, CHTR, PNC> $91, EA, PG, FB, AAPL, DKS, LVS, SE, BABA
Bearish Stocks to Trade: len, cbs, mur, viab, xom, abc, fslr, cah, vfc, ctsh, dltr, hes, esrx, myl, tgt, dg, crm, low, cost, bmy, cvs
2x Normal Volume: PG, SRPT, MAR, LEN, CBS, CLVS, RRC, AGN
Inside days: ge, csco, kmi, pfe, mrk, ms, sbux, dis, atvi, jnj, aig, ccl, schw, hd, mon, eog, nue, wba, skx, coh, psx, ea, amzn, kors, gs