Today’s Trading Education…
How to Adjust Your Day Trades For Changes in Volatility
How do you determine share size per trade? Is it documented in a written trading plan?
Day trading and risk go together, it’s tough to say one without the other.
The problem for most new day traders is they never learn to adjust risk with volatility. A $500 risk is not the same in every stock or from day-to-day.
Stocks have different volatility, known as average true range. This is the amount price action fluctuates from high to low (on average). New traders should assess risk tolerance, capital and decision making ability and coordinate these resources with volatility.
The truth is, new day traders can’t handle faster, wider movements. They have not learned to make good decisions yet. They don’t have enough experience.
On the Tape Today...
$STX and $WDC relative strength yesterday and solid breakouts. Be long, if above yesterday's close. (see chart)
$HES bear flag, $47.25 sell-stop, minor support @ $46 with room to go to $40.
$AZO momentum play, $760 buy-stop, $795 swing trade target to sell on a new long.
$DLTR and $DG consolidation looking for trend days coming out of inside days.
$WDC 9-27-16 (Click to Enlarge)
U.S. stock futures pare gains as debate relief rally fades
U.S. stock futures pared gains Tuesday as a drop in oil prices accelerated, somewhat offsetting cheer in the markets from an apparent win for Hillary Clinton over Donald Trump in the first U.S. presidential debate.
“Equities have reversed a strong start and decent overnight bounce,” said Accendo Markets analyst Mike van Dulken in a note.
Stocks to watch: Nike will report earnings after the market’s close.
Other markets: Crude-oil futures were falling after Iran poured cold water on hopes for a production-cap deal at the oil producers’ meeting this week. The Wednesday meeting, on the sidelines of an energy conference in Algeria, will be “consultative,” Iran said. U.S. crude futures CLZ6, -1.42% fell 1.4% to $45.30 a barrel.
Continue reading on marketwatch.com
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 9-27-16 | $NKE Earnings
Stocks Drop Ahead Of Presidential Debate; Smith & Wesson Plunges 7%
Stocks closed near session lows Monday ahead of the presidential debate between Hillary Clinton and Donald Trump, scheduled to start at 9 p.m. ET tonight.
Fiber optics, hotel operators and banks were among the biggest losers in the stock market today. Oil stocks were mostly higher, as West Texas intermediate crude futures rose nearly 3% to $45.66 a barrel.
Goldman Sachs (GS) and JPMorgan (JPM), the top decliners among blue chips, lost more than 2% each.
Among other Dow components, Disney (DIS) fell 1.4% in above-average volume. The entertainment and theme park giant is mulling a bid for Twitter (TWTR), Bloomberg reported. Disney could join other potential acquirers including Alphabet (GOOGL) and Salesforce.com (CRM). Twitter shares reversed intraday losses to close 3% higher.
Smith & Wesson (SWHC) gapped down and fell 7% to a near three-month low in heavy trade. Shares are now more than 14% below a 29.85 buy point and are heading toward the 200-day moving average.
Tape Reading the SPY ETF
$SPY “swing high” and close on the lows gives the bears a reason to be happy.
The long-term uptrend remains valid unless prices penetrate the $212 level with conviction. If the $SPY produces multiple 100+ million shares days, with large red candlesticks through that level, there is plenty of room to go lower.
Below $200 is not out of the question. The $SPY hovers this morning at the up trend support drawn from February. With last night’s debate and a clear support level in play today, we most likely get an indecision candlestick today.
Expect sideways, be disciplined. Set alarms for the $212 level.
Stocks in Play: $NKE research on finviz.com
$NKE NEWS: What to watch for in Nike earnings
Product launches have fallen flat and competition is tight, but Nike is still the leader
Nike Inc. is scheduled to report fiscal first-quarter results on Tuesday after the market closes.
Analysts are expressing concern as competition heats up from, brands like Under Armour Inc. UA, -2.15% and Adidas AG ADS, -0.59% but many believe Nike’s dominant position in the athletic gear arena hasn’t changed.
The Numbers Don’t Lie: Nike Earnings Preview
Stocks to Trade 9-27-16 | Tuesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: CAR, STX, WDC
Negative last 20 and 5 trading days | closed 2% lower from the open: vrx, kors, rh, celg, vlo, mpc, mar, sm
Quarterly Order Flow:
Bullish Stocks to Trade: CAR, SRPT, REN, STX, WDC, LN, TWLO, YELP, AAPL, APA, ADBE, MA, TSN, AMGN, TRGP, CLVS, DKS, EA, NVDA, LVS, APC, BABA
Bearish Stocks to Trade: rh, tgt, low, myl, vfc, mar, viab, hd, bmy, dis, lvlt, esrx, cost, cvs, dg, xom, oxy, len, crm, hes
2x Normal Volume: HOT, PG, CRM
Inside days: jd, endp, dvn, cop, oxy, apa, cog, de, jwn, fslr, mur, lvs, wynn, dg, clr, sltr, skx, gpor