8:30 AM – MORNING MARKET UPDATE & WATCH LIST
NOTE: Today’s watch list can be found here.
Last week, the major averages rallied for four consecutive sessions, then each sold off sharply on Friday.
QUOTE OF THE DAY:
“I find that the harder I work, the more luck I seem to have.”
– Thomas Jefferson
The Dow Jones fell -0.9% that day as the index struggled to hold above its 50-day line while the Nasdaq closed back below its 200-day moving average and lost -1.7% on the session.
Now You Can Start Receiving James’ –
Technical SetUps WatchList Each Market Morning
He is looking for those select few which are setting up in sound technical bases and which looked poised to breakout that day.
Each stock is listed with specific trading criteria such as a TRIGGER PRICE, TRIGGER VOLUME and MAX BUY PRICE.
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The S&P 500 lost -1.1% during Friday’s sell off, yet managed to hold above its important 200 DMA.
For the week, all three main benchmarks did, however, post gains. The Dow increased +2.8%, the S&P 500 ended with a net gain of +2.1%, while the Nasdaq eked out a +0.7% gain.
The Russell 2000 was down -2.4% during Friday’s session. Technicians would point out that the small cap index could see a so-called death cross manifest with a possible 50 DMA and 200 DMA convergence, should the current downtrend continue.
More importantly – on Wednesday, we had a Day 7 follow-through with the bullish action in the session confirming a – by the book – uptrend. We also had an increase mid-week in the number of stocks breaking out from our watch list, which was another good accompany sign. However, Friday’s negative broader-market action, dealt a serious blow to the recently confirmed uptrend.
There was also higher volume on Friday which shows that institutional investors were selling into the week’s rally. Heavy-volume selling that early into a newly confirmed uptrend is not a good sign.
Friday’s selloff has us starting next week’s trading in a somewhat defensive stance on Monday morning. We need to closely watch our still fledgling individual breakouts.
This morning, U.S. stock futures are slightly lower.
I ran my regular stock screens this morning, yet did not add any new stocks to our watch list.
We now have 7 stocks which we will be watching for the next buyable breakout – see here.
One in particular is OLLI which was just added to our watch list yesterday.
This is another retailer building a base just off of new highs.
Chart courtesy of stockcharts.com.
Now you can get access all watch lists with updated trading criteria including –TRIGGER PRICE, TRIGGER VOLUME, and MAX BUY PRICE for every stock here.
Missed any of these morning reports? You can find all previous reports here.
Standard rules apply – any gains above the stock’s TRIGGER PRICE while the day’s volume is at least on pace to make the TRIGGER VOLUME would have any of these set ups confirming a BUY signal up to their MAX BUY PRICE by default.
Keep in mind that when a stock breaks out – becomes potentially buyable – there are other factors to consider.
Volume on the breakout. A stock that is breaking out through resistance, with an increase in volume of +50% above the stock’s average volume (50 DAV), is showing more conviction and more demand. This is not saying – all lower volume breakouts will fail. Actually, we’ve seen many continue higher. If you have found that you did buy a stock that showed lower daily volume or volume under 50%, going forward – simply treat it a regular trade.
Earnings BreakOuts. Many stocks from our watch list will break out during earnings season. Earnings breakouts can be more rewarding, however, these trades carry much more risk then traditional (non-news) breakouts. One needs to also consider – the strength/weakness of the fundamental news that was just released along with the forward-looking guidance the company gave, investors response to the conference call, etc. For anyone who is not familiar with – buying earnings breakouts – I suggest that they sit through a few seasons to study, paper trade, and show some profits, before applying actual capital.
As always, if anyone has any questions – please feel free to email me at firstname.lastname@example.org as I would be glad to assist you.
About the Founder: James F. Taulman – James served as Editor-in-Chief of the first independently licensed website that offered stock reports and services based on the CAN SLIM® investment system. He has developed a knack for being able to quickly and accurately analyze high-ranked stocks based on this winning investment strategy. Over the years, Mr. Taulman has enjoyed assisting individuals from professional money managers to private investors with their needs in relation to implementing this investment approach on a daily basis in the current marketplace. Each Sunday you could hear him deliver his weekly market report as part of the “Your Money Matters” radio program on ABC and CBS radio networks. _________________________________________________ Disclaimer: James Taulman is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The independent contractors and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company’s website, or in its publications, are made as of the date stated and are subject to change without notice. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company’s products (collectively, the “Information”) are provided for informational and educational purposes only and should not be construed as investment advice.