The stock market is setting up a classic short-sale trade.
A down trend, followed by 3 days of higher stock prices, means you should be looking for supply to enter the market again. Last week was nothing more than a short-covering rally. [Related: click to watch an explanation of short-covering]
Despite earnings season, crude oil continues to be the primary catalyst for global markets. Long trades should be viewed as short-term momentum trades. This means you should not be planning to use extra leverage, if your stocks trade above the open, and positive from the previous close. Exit into momentum and trail your stop loss.
— PlanetOption (@planetoptionews) January 25, 2016
If you decide to be a buyer, take the plunge in strong stocks, those above the 50sma on the daily chart. (see lists below for stocks to buy)
Stock Market Today: Map of the S&P 500
(click the map for a full view)
–> Top 25 Proprietary Trading Secrets
SPY price action ended the week with a giant hammer candlestick. The ETF has resistance in the $194 area. I am looking for the lower open to find buyers this morning, but I am creating a plan to be a short-seller the first rally. Looking for a shooting star candlestick on the ten minute chart for the entry.
(click the chart for a full view)
Twitter Executives Leaving CEO Jack Dorsey Sends Tweet | 1-25-16
Was really hoping to talk to Twitter employees about this later this week, but want to set the record straight now: pic.twitter.com/PcpRyTzOlW
— Jack (@jack) January 25, 2016
Twitter chief executive Jack Dorsey has confirmed the exit of a large swathe of the company’s leadership team.
Several top Twitter executives are leaving while CEO Jack Dorsey plans to add board members, according to reports as the stock has plunged 55% over the past year.
Twitter CEO Jack Dorsey is revamping his top ranks as he tries to find ways to revive the social media company and earn the trust of investors.
Two of Twitter’s top executives are departing the company and a new CMO is on the way, sources tell Re/code.
Pete’s Trading Notes:
- The first couple of trading days this week will be interesting. Classic technical analysis says we see supply dominate and the stock market closes lower by the end of the week.
- Crude oil continues to dominate price action, follow the black gold.
- GS found some support @ $151.50-152. Was that enough to attract buyers of the stock?
The chart of Netflix is in an interesting spot. I don’t say this often but you can build an argument for a trade on the long and a short-side. Since July 2015, the stock has held the $100 area for support, buyers stepped in.
What’s different this time, is we are not in a bull market. If demand cannot hold the stock at $100, there is minor support at $97, with a huge gap below to $88.67.
(click the chart for a full view)
Stocks to Trade 1-25-16
Short-Term Trading Momentum:
Positive the last 20 and 5 trading days | closed 2% higher from the open: HCN, EA, ROST, FSLR, SE, KMI, OKE
Negative last 20 and 5 trading days | closed 2% lower from the open: axp, mos, hain, sti, nsc, cyh, nflx, grub, luv, bwa, rio, dlph, twtr, rcl, scty, hes, mur, fti, nbl, nfx, epd, ksu, clr, dvn
Quarterly Order Flow:
Bullish Stocks to Trade: FSLR, EQT, HCN, GPOR, ANTM, LULU, NEE, DG, PM, MCD, DLTR, WMT, M, T, MYL, TSN
Bearish Stocks to Trade: axp, hain, nsc, vrx, nflx, unp, luv, cf, bwa, ibm, vmw, mck, cof, dlph, kmx, nwl, rcl, esrx, abc, jwn, expe, bbby, scty, lrcx, ups, ba, tif, thc, hon<96, tsla, mar, stx, akam, tgt, tjx, adi, wdc, vfc, pnc, cop, cat, ma, dd, nbl, c, amba, adsk, len, ua, pru, stt, lnc, nfx, aer, crm, dis, ual, jpm, car, bhi, fdx, gild, ir, gs, yelp, nxpi, ksu, aapl, apc, swks, dvn, slb, mpc, lng, mbly, hfc, etp
20 Day Breakdown: hain, stx, sti, axp
20 Day Breakout: GLNG, SE, COG, EQT, O, BXLT, M, PRGO
2x Normal Volume: AXP, SBUX, WMB, SCHW, SLB, CLR, GLNG, UNP, DVN, ETFC, STI, AMTD, OKE, RIO, NFX, CF, FTI, ADBE, HAIN, KSU, TIF
Inside days: c, ibm, bk, jblu, so, wdc, yum, ba, tif, xlnx, unh, scty, sndk, kmx, dks, cce, cb, lulu, dltr, yelp, cvc, amba