Today’s Trading Lesson…
A violent move lower on Friday, and a solid down trending momentum. All signs look good for another short sale.
You may even get a lower open today. Great if you’re already short. Not great for a new short.
Saturation points are areas in price that alternate between value (to buy or short sell) and the highest probability to take profits.
These swings in the market generally last 3-6 days, but this one in $MYL is special. It gave us an exhaustion candlestick. A large body candlestick with volume, after a parabolic move. It is technically perfect.
Perfect to no longer be short.
Knowing when to not buy or sell, is just as important as knowing when you should buy or sell. Print out this chart, it’s gold. A lower open should find buyers today…
Click Pictures Below to Enlarge
On the Tape Today...
$CCL and $RCL have caught bulls on the wrong side of a breakout. No order flow but one side is trapped. Look for another day lower today. (see chart)
$V sitting on the verge of a 52 week breakout. Buy stop > $82.50.
$C, JPM, GS, MS all inside days. Monitor all four today and wait for the open range break. Each should have a powerful trend today.
$DE retraces to $84 support and gives us an inside day to bid. Buy stop >$84.25. If it trades lower let it go.
$CCL 9-6-16 (Click to Enlarge)
U.S. stocks set to open higher as traders return from holiday
Deal news from GE boosts 3-D printing stocks
U.S. stock futures inched higher Tuesday, putting the market on track to add slightly to last week’s gain as traders returned from a three-day weekend. Analysts are bracing for the market to show more oomph after some August doldrums.
The “worst of the quiet summer period” has passed, and investors now “can expect to see trading volumes pick up significantly this week,” said Craig Erlam, senior market analyst at Oanda, in a note on Tuesday. Other markets:
The U.S. oil benchmark CLV6, +1.01% traded higher, helped by Monday’s agreement between Russia and Saudi Arabia on monitoring crude prices.
Stock Market Today: Heatmap of the S&P 500
Stock Trading Today 9-6-16 | $MON Deal
Tame Jobs Report Lifts Stocks; Apple Leads Dow; Small Caps Outperform
Stocks ended the week with decent gains Friday, cheered by a so-so August jobs report. Apple (AAPL) was a top percentage gainer in the Dow Jones industrial average, up 0.9%, ahead of its Sept. 7 press event where it’s widely expected to introduce a new iPhone.
Activision Blizzard (ATVI) outperformed in the Nasdaq 100, rising 1.5% to 42.81 as it vies for a breakout from a flat base with a 43.15 buy point.
In the stock market today, gold miners outperformed for the second straight session, but top performers like Franco Nevada (FNV) and Royal Gold (RGLD)are still stuck below their 50-day moving averages.
Tape Reading the SPY ETF
$SPY traded sneaky volume on Friday. Again.
Trading before the end of summer should be light, it wasn’t. A respectable 78+ million shares in the $SPY show another distribution day. This is only one day but it starts to make your mental alarms go off.
One day, or a pattern? We noticed the same in our post last Friday.
On the surface it doesn’t change our long bias, but is does change something big. Previous days trading lower were expected to find buyers, we didn’t see any signs of distribution yet. You could comfortably bid a lower market.
This is different.
For trade expectation and trade management, this means to demand extra confirmation before you bid a stock trading below the open or below the previous day’s close.
The tide is turning. It’s NOT a change in trend, but the current is shifting.
Stocks in Play: $MON research on finviz.com
$MON NEWS: Bayer Raises Offer to Buy Monsanto
German company raises bid to $127.50 a share from $125, says higher price depends on reaching a ‘negotiated transaction’ Bayer AG raised its offer to buy Monsanto Co. and create a new global leader in seeds and pesticides, though the German firm said the higher price depended on achieving a “negotiated transaction.”
Bayer, which has been discussing a deal with Monsanto since mid-May, said it would pay $127.50 a share for the St. Louis-based biotech seed giant, up from its previous offer of $125 a share.
The higher offer values Monsanto at over $65 billion, including debt. Monsanto acknowledged the improved offer, and called the discussions with Bayer “constructive.” READ MORE on WSJ.COM — >>
Bayer sweetens Monsanto ($MON) bid as talks enter final stretch
FRANKFURT/NEW YORK German pharmaceutical and crop chemicals manufacturer Bayer AG says talks with Monsanto Co have advanced and it is now willing to offer more than $65 billion, a 2 percent increase on its previous offer for the world’s largest seeds company. “
Both sides are gradually nearing consensus,” one person familiar with the matter said. Monsanto has also agreed to open its books for Bayer to conduct due diligence checks on the company’s business, two sources close to the matter said.
Stocks to Trade 9-6-16 | Tuesday Edition
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: TWLO, APC, RRC
Negative last 20 and 5 trading days | closed 2% lower from the open: lulu, swhc, myl, ua, juno, x, ions, tsla
Quarterly Order Flow:
Bullish Stocks to Trade: TWLO, SM, CLR, LNG, OKE, EA, PXD, BABA, KMX, TRGP>$45, TAP, LNC, DVN, URBN, PRU, COF, STT, FL, ADBE, PNC, ROST, GS, FB, AMZN, LVS, MBLY, YELP, TIF, SWKS, NVDA
Bearish Stocks to Trade: nclh, juno, tsla, crm, bmy, gild, fslr, dg, lly, dltr, mcd, esrx
2x Normal Volume: BMY, LULU, MYL, SWHC, AVGO
Inside days: c, jpm, wfc, ms, gm, crm, nvda, nbl, aal, vlo, met, luv, cog, aig, cien, mpc, tjx, shi, tol, cof, unh, esrx, unp, de, dfs, gs, aet