The stock market traded lower Monday, but well off its lows, in quiet trading on Monday. I really like the set up I see on the charts, as most of the major averages appear to be gearing up for an upside breakout. Tuesday is a seasonally favored trading day, as it is the last full trading day before the Christmas holiday. With this in mind, an opening range breakout daytrading strategy should catch a nice pop to the upside. If you trade stock index futures, consider either the E-Mini S&P 500 or E-Mini ND100. Make sure the tape indicators are positive before taking any trades.
In regard to individual stocks, look for stocks that have similar patterns compared to the major indices for nice potential day trades on Tuesday.
Scott Cole
www.bestdaytradingstocks.com
Monday, December 22, 2008
Sunday, December 21, 2008
Monday Trading Thoughts for Stock Market
The few days preceding a major holiday have a tendency to be strong for the stock market, so pay close attention to any upside breakouts. Trading will likely be a bit thin this week as many traders are already on vacation. As a result, there could be a little extra volatility Monday or Tuesday, while trading on Wednesday and Friday will likely be very quiet with narrow ranges. Well, that is what history suggests at least!
I just had a chance to read a real estate report I receive annually from PricewaterhouseCoopers called "Emergin Trends in Real Estate." The mood among commercial real estate industry participants is that of doom and gloom, the 2009 forecast is for a sharp decline in commercial property values.
However, as I scan the stock market industry groups for the strongest performers over the last 30 days, the commercial real estate REITS, particularly the retail and hotel variety, are among the top 10 performing industry groups. These stocks have been beaten down considerably since they peaked in early 2007. In fact, at its November lows, the retail REIT sector was down about 80% from its highs. Will the decline in energy prices and interest rates help the commercial real estate market? Maybe not in the near term while jobs are still being lost, but judging from the performance of these stocks, a rebound may be imminent.
Other strong sectors over the last 30 days include residential construction, silver miners, semi-conductors, health care facilities, and casinos. These were also among the big movers on Friday.
Scott Cole
www.bestdaytradingstocks.com
I just had a chance to read a real estate report I receive annually from PricewaterhouseCoopers called "Emergin Trends in Real Estate." The mood among commercial real estate industry participants is that of doom and gloom, the 2009 forecast is for a sharp decline in commercial property values.
However, as I scan the stock market industry groups for the strongest performers over the last 30 days, the commercial real estate REITS, particularly the retail and hotel variety, are among the top 10 performing industry groups. These stocks have been beaten down considerably since they peaked in early 2007. In fact, at its November lows, the retail REIT sector was down about 80% from its highs. Will the decline in energy prices and interest rates help the commercial real estate market? Maybe not in the near term while jobs are still being lost, but judging from the performance of these stocks, a rebound may be imminent.
Other strong sectors over the last 30 days include residential construction, silver miners, semi-conductors, health care facilities, and casinos. These were also among the big movers on Friday.
Scott Cole
www.bestdaytradingstocks.com
Friday, December 19, 2008
Stocks Mixed on Bush Auto Bail Out
President Bush finally opened the Treasury to the auto industry today, essentially allowing the Democrats and Obama administration to deal with the problem next year. For lending Chrysler and GM $13.4 billion now, and potentially an additional $4 billion in February, the administration required some changes in the way these companies do business, and in particular how it pays its workers. The UAW as already cried foul and will undoubtedly pester the Democrats, whom it contributes millions to, to change this deal for the better of the union. Of course, this won't help the auto makers restructure in the long run, so the government essentially threw good money after bad, which was expected.
In spite of the Dow closing slightly lower today, all of the other major averages were up on the day, and there was good money flowing into those stocks that close up on the day. I really like the chart patterns I see on the Dow and S&P 500, expect some positive price action early next week. Pre-holiday trading tends to have an upward bias. Day traders should be aware of the upward seasonal bias for next week.
Scott Cole
www.bestdaytradingstocks.com
In spite of the Dow closing slightly lower today, all of the other major averages were up on the day, and there was good money flowing into those stocks that close up on the day. I really like the chart patterns I see on the Dow and S&P 500, expect some positive price action early next week. Pre-holiday trading tends to have an upward bias. Day traders should be aware of the upward seasonal bias for next week.
Scott Cole
www.bestdaytradingstocks.com
Wednesday, December 17, 2008
Stocks Consolidate in Light Trading
The stock market consolidated as traders re-assessed the Fed's announcement after the rate cut yesterday. Although the market averages were down today, most stocks actually closed up on the day, according to statistics provided by Worden Brothers (they produce the TC2000 software I use to scan my stocks).
Overall, it was an uneventful day, although I did not like the fact that Apple closed sharply lower after another downgrade this week. There remains concern regarding the health of CEO Steve Jobs, since he is not giving the keynote address at the upcoming Macworld conference. Furthermore, sales of Apple's desktop computers have been weaker than expected.
The top five performing industry groups today were Information Technology, Resorts and Casinos, Trucking, Semiconductors and Silver.
Below is a solid day trade occurring in EBS. Heading into the session, we notice a solid set upon the daily chart indicating potential direction for the stock today. The stock breaks out quickly and holds at higher levels before trailing off later in the morning. Early in the afternoon a buy the dip opportunity presents itself and the stock rallies for the rest of the day. These are the kinds of opportunities day traders should look for!
Scott Cole
www.bestdaytradingstocks.com
Overall, it was an uneventful day, although I did not like the fact that Apple closed sharply lower after another downgrade this week. There remains concern regarding the health of CEO Steve Jobs, since he is not giving the keynote address at the upcoming Macworld conference. Furthermore, sales of Apple's desktop computers have been weaker than expected.
The top five performing industry groups today were Information Technology, Resorts and Casinos, Trucking, Semiconductors and Silver.
Below is a solid day trade occurring in EBS. Heading into the session, we notice a solid set upon the daily chart indicating potential direction for the stock today. The stock breaks out quickly and holds at higher levels before trailing off later in the morning. Early in the afternoon a buy the dip opportunity presents itself and the stock rallies for the rest of the day. These are the kinds of opportunities day traders should look for!
Scott Cole
www.bestdaytradingstocks.com
Tuesday, December 16, 2008
Stocks Rally on Fed Announcement
Stocks ended sharply higher today after the Fed announced it has lowered its Fed Funds Target to a range of 0-0.25% from 1.0% today. Accompanying this announcement was a statement that the fed will be actively providing capital and purchasing mortgages, among other things, to help spur economic growth.
Prior to the announcement, the Dow was up about 100 points, and it closed up nearly 360 points higher. The Dollar fell sharply against the Euro in Forex trading as the spread in U.S. and European interest rates widened. Late in the day, the 10 year Treasury Yield fell to 2.30%. In short order, we should see fixed rate mortgages drop below 5%. This will help spur some new home buying.
Before the markets opened today, new economic data on housing indicated the sharpest decline in new housing starts and building permits in nearly 25 years. The Consumer Price Index also fell by 1.7% in November.
More to come
Scott Cole
www.bestdaytradingstocks.com
Prior to the announcement, the Dow was up about 100 points, and it closed up nearly 360 points higher. The Dollar fell sharply against the Euro in Forex trading as the spread in U.S. and European interest rates widened. Late in the day, the 10 year Treasury Yield fell to 2.30%. In short order, we should see fixed rate mortgages drop below 5%. This will help spur some new home buying.
Before the markets opened today, new economic data on housing indicated the sharpest decline in new housing starts and building permits in nearly 25 years. The Consumer Price Index also fell by 1.7% in November.
More to come
Scott Cole
www.bestdaytradingstocks.com
Monday, December 15, 2008
Quiet Day for Stocks, Dollar Weakness Continues
The stock market closed modestly lower today in quiet trading at the start of the Fed's two day meeting. Most traders and investors expect another 50 basis point cut in interest rates Tuesday at the end of the meeting, which would bring the Fed Funds rate down to 0.5%. In the present environment, this likely will not have much of an impact.
At this point, the banks are not lending money, as they try to improve their balance sheets. In recent weeks I had noticed a flurry of potential lending activity by smaller banks in our real estate market here in Southcentral PA. This appears to have ceased for the time being.
Overall, I continue to like the chart pattern on the charts of the major indexes. The volatility is falling and the averages appear to be forming a nice base. The fact that the right shoulder in the existing head and shoulders pattern has not been broken to the downside allows me to believe that the general bias of the market will be sideways to up.
For Tuesday, expect a quiet market as traders wait for the Fed decision on interest rates. The cut in rates is already expected, but the Fed statement could move the market.
Treasury futures traded modestly higher today in spite of the weak Dollar. Initially, the dollar weakness helped Crude Oil rally a bit. However, late in the day, the energy markets sold off again and appear ready to test the recent lows again. Silver and Gold rallied a bit today, and Silver appears to be poised for a solid breakout to the upside that projects up to resistance at the 1400 level.
Scott Cole
www.bestdaytradingstocks.com
At this point, the banks are not lending money, as they try to improve their balance sheets. In recent weeks I had noticed a flurry of potential lending activity by smaller banks in our real estate market here in Southcentral PA. This appears to have ceased for the time being.
Overall, I continue to like the chart pattern on the charts of the major indexes. The volatility is falling and the averages appear to be forming a nice base. The fact that the right shoulder in the existing head and shoulders pattern has not been broken to the downside allows me to believe that the general bias of the market will be sideways to up.
For Tuesday, expect a quiet market as traders wait for the Fed decision on interest rates. The cut in rates is already expected, but the Fed statement could move the market.
Treasury futures traded modestly higher today in spite of the weak Dollar. Initially, the dollar weakness helped Crude Oil rally a bit. However, late in the day, the energy markets sold off again and appear ready to test the recent lows again. Silver and Gold rallied a bit today, and Silver appears to be poised for a solid breakout to the upside that projects up to resistance at the 1400 level.
Scott Cole
www.bestdaytradingstocks.com
Sunday, December 14, 2008
Weekend Stock Market Commentary
The price action in the stock market was quite positive on Friday, considering the bad news regarding the auto bail-out and some weak economic data. Stocks still managed to close higher on Friday, with the Russell 2000 leading the major averages with a better than 3% gain. What we would now like to see is an upside breakout above 1603 on the Nasdaq, 919 on the S&P 500 and 492 on the Russell 2000. These levels represent 4 week highs in the averages.
It was interesting to note that the top five performing industry groups on Friday were REITS, as many of these groups surged at least 10% on Friday. Whether this was a reflection of lowering mortgage rates is yet to be determined. It still does not appear that big banks are willing to lend any money.
Other top performing groups were the casinos, office supplies, semiconductors, and airlines, among others.
For Monday, due to the improved tone in the market, consider an opening range breakout strategy to the long side in an Exchange Traded Fund that tracks the Nasdaq or the Russell 2000. QLD and IWM come to mind.
Scott Cole
www.bestdaytradingstocks.com
It was interesting to note that the top five performing industry groups on Friday were REITS, as many of these groups surged at least 10% on Friday. Whether this was a reflection of lowering mortgage rates is yet to be determined. It still does not appear that big banks are willing to lend any money.
Other top performing groups were the casinos, office supplies, semiconductors, and airlines, among others.
For Monday, due to the improved tone in the market, consider an opening range breakout strategy to the long side in an Exchange Traded Fund that tracks the Nasdaq or the Russell 2000. QLD and IWM come to mind.
Scott Cole
www.bestdaytradingstocks.com
Thursday, December 11, 2008
Stocks Slide in Thursday Trading
The stock market fell today as the auto bailout continues to stall in the Senate. However, one reason the market may have fallen further late in the afternoon was JP Morgan CEO James Dimon's comments regarding 4th quarter profitability at the bank. He indicated that it has been a lousy quarter so far, and December has been particularly bad.
No matter the reason, traders and investors sold stocks today. We are now in a position where the market is in an area of support, and it is important that it holds at these levels and has a strong upside day either Friday or Monday.
All of the major averages now have an inverted head and shoulders pattern in place. This is actually a more ominous sign in that it can act as a powerful continuation pattern in the context of the existing trend if the right shoulder is broken to the downside on these charts. In the S&P 500, the 815 level is the low of the right shoulder. In the Nasdaq, this level is just below 1400.
In my view, this pattern as a continuation pattern is more powerful than at a bottoming pattern, so watch it!
Scott Cole
www.bestdaytradingstocks.com
No matter the reason, traders and investors sold stocks today. We are now in a position where the market is in an area of support, and it is important that it holds at these levels and has a strong upside day either Friday or Monday.
All of the major averages now have an inverted head and shoulders pattern in place. This is actually a more ominous sign in that it can act as a powerful continuation pattern in the context of the existing trend if the right shoulder is broken to the downside on these charts. In the S&P 500, the 815 level is the low of the right shoulder. In the Nasdaq, this level is just below 1400.
In my view, this pattern as a continuation pattern is more powerful than at a bottoming pattern, so watch it!
Scott Cole
www.bestdaytradingstocks.com
Wednesday, December 10, 2008
Quiet Day in Stock Market
The U.S. Stock Market for once had a nice and quiet day today, trading within its narrowest range since the shortened post Thanksgiving Day session. Otherwise, this was the narrowest trading range since November 3rd. Overall, it was a choppy session, as traders focused on the potential automaker bail out bill. The House of Representatives is voting on one measure this evening. However, the bill may be stalled in the Senate where Republicans seemed to have been kept out of the loop.
The market seems to be digesting its gains of Friday and Monday rather nicely, and I would not be surprised by another surge upward in the next day or two.
Today's big directional move for daytraders was in CHK. The chart is below. This is a textbook example of buying an opening range breakout and holding until the close.
The market seems to be digesting its gains of Friday and Monday rather nicely, and I would not be surprised by another surge upward in the next day or two.
Today's big directional move for daytraders was in CHK. The chart is below. This is a textbook example of buying an opening range breakout and holding until the close.
Tuesday, December 9, 2008
Stocks End Day With Modest Pullback
The U.S. Stock Market pulled back a bit on Tuesday. The economic news of the day involved some weak earnings reports and a Republican backlash against the automaker bailout bill presented to the White House by Democratic lawmakers. Politics as usual in Washington!
After two big up days in the stock market, it was no real surprise that the market pulled back a bit today. I pointed in yesterday's post that the market was likely due for a pullback today and that the best side to play the market today would likely be the short side. Tuesdays have a tendency to reverse the market after some decent gains in previous trading sessions. The market opened lower, tried to rally, but rolled over after 11 am. Volume was on the light side today, and the trading ranges were narrow. This is the kind of action we like to see on pullbacks if the market is to head higher longer term.
The chart below is the Proshares Ultra Short Russell 2000 (TWM), an ETF. This is a great vehicle for daytrading. TWM followed the direction of the overall market today, but gave daytraders twice the bang for the buck.
Scott Cole
After two big up days in the stock market, it was no real surprise that the market pulled back a bit today. I pointed in yesterday's post that the market was likely due for a pullback today and that the best side to play the market today would likely be the short side. Tuesdays have a tendency to reverse the market after some decent gains in previous trading sessions. The market opened lower, tried to rally, but rolled over after 11 am. Volume was on the light side today, and the trading ranges were narrow. This is the kind of action we like to see on pullbacks if the market is to head higher longer term.
The chart below is the Proshares Ultra Short Russell 2000 (TWM), an ETF. This is a great vehicle for daytrading. TWM followed the direction of the overall market today, but gave daytraders twice the bang for the buck.
Scott Cole
Monday, December 8, 2008
Stock Market follows through on Friday Rally
The stock market followed through on Friday's rally today as Congress sent an automaker bail-out bill to the White House and President-Elect Obama outlined his economic stimulus package. Stocks and commodities appeared to like the news as nearly every commodity showed strength today. Among the top performing groups today were telecom, some tech, real estate and commodity based groups. I've also noticed some strength in home health care stocks, which are among the top performers of the year.
For the stock market, Tuesdays often bring a reversal of the previous trading day, or the previous couple of trading days. Today, the price range in the Stock Index Futures was fairly narrow, and they made multi-week highs for the first time in a while. With that in mind, these markets may be ripe for some good intraday shorting opportunities for day traders. If you have a good day trading methodology, consider that the bias for Tuesday's trading will be to the downside, based upon the price pattern on the daily charts. This will be confirmed on early day weakness and weak tape indicators.
The biggest price change of the day was in MELI. This was a classic opening range breakout trade that carried the stock in an upward trend all day. You can see the intraday chart of this stock below.
Scott Cole
For the stock market, Tuesdays often bring a reversal of the previous trading day, or the previous couple of trading days. Today, the price range in the Stock Index Futures was fairly narrow, and they made multi-week highs for the first time in a while. With that in mind, these markets may be ripe for some good intraday shorting opportunities for day traders. If you have a good day trading methodology, consider that the bias for Tuesday's trading will be to the downside, based upon the price pattern on the daily charts. This will be confirmed on early day weakness and weak tape indicators.
The biggest price change of the day was in MELI. This was a classic opening range breakout trade that carried the stock in an upward trend all day. You can see the intraday chart of this stock below.
Scott Cole
Sunday, December 7, 2008
Day Trading Thoughts for Monday
Friday we finished the week on a positive note in spite of a substantially weak jobs report. Economic data last week was generally awful, and it was also reported that we've been in a recession for a year. The headlines are all negative, yet the market seemed to hold its own after Monday's sell-off. This suggests a change in character. I do not expect the market to shoot straight up from here due to the magnitude of the decline over the last year. The market needs time to make a base, but this base can be made with an upward bias.
A look at the charts of the major averages suggest that we could get a nice upside breakout, and there is no better time to do that than on a Monday. When the market has a bullish undertone, Monday's tend to be nice upside days. Considering the resistance levels lined up just over Friday's close, a lot of stops to cover short positions could be triggered on any strength in the market in the next couple of days. With that in mind, day traders should be aware of these factors heading into the trading week.
Scott Cole
www.bestdaytradingstocks.com
A look at the charts of the major averages suggest that we could get a nice upside breakout, and there is no better time to do that than on a Monday. When the market has a bullish undertone, Monday's tend to be nice upside days. Considering the resistance levels lined up just over Friday's close, a lot of stops to cover short positions could be triggered on any strength in the market in the next couple of days. With that in mind, day traders should be aware of these factors heading into the trading week.
Scott Cole
www.bestdaytradingstocks.com
Friday, December 5, 2008
Stocks Manage Rally In Spite of Weak Jobs Report
The U.S. Stock Market ended with a nice rally on Friday, in spite of the weakest jobs report in thirty years. Today's rally recovered all of Thursday's losses, and the week ended with only modest losses in spite of the huge Monday sell-off.
The tone of the market is definitely quite a bit better than it has been over the past several months. However, it will need to breakout of the trading range that has been in place since the October lows in order to have a more sustainable rally.
More commentary over the weekend.
Scott Cole
www.bestdaytradingstocks.com
www.kungfutrader.com
The tone of the market is definitely quite a bit better than it has been over the past several months. However, it will need to breakout of the trading range that has been in place since the October lows in order to have a more sustainable rally.
More commentary over the weekend.
Scott Cole
www.bestdaytradingstocks.com
www.kungfutrader.com
Subscribe to:
Posts (Atom)