6:30 AM – MORNING MARKET UPDATE & WATCH LIST
After taking a breather the previous week, the rally resumed making gains this past week.
QUOTE OF THE DAY:
“Take chances, make mistakes. That’s how you grow. Pain nourishes your courage. You have to fail in order to practice being brave.”
– Mary Tyler Moore
The market opened on Monday with a gap up and all three of major indexes jumping to new all-time highs.
Monday night, Fed Chairman Jerome Powell said he was positive on the economy and indicated prospects for a rate hike were dim.
The broad-based gains continued Tuesday and Wednesday when the indices marked what is their latest record high close ahead of the Thanksgiving Day break.
Late Wednesday, investors were concerned that the U.S. – China trade deal may be in jeopardy after President Donald Trump signed legislation supporting Hong Kong protesters. Hence, markets did trade lower when they reopened for trading on Friday, ending the four-day win streak.
We ended the month of November net higher with the Dow adding +3.7% for the month, while the Nasdaq gained +4.5%, and the S&P rose +3.4%. These were the biggest monthly gains for all three major averages since June.
After taking a brief break last week, the Dow was back to making triple-digit weekly gains. The index closed this week up +176 points or +0.63%.
The blue chips ended at 28,051 — just slightly back above 28k.
This morning, futures are significantly higher as members of Congress return from their holiday break to resume impeachment proceedings.
Asian markets gained in early trading Monday following an unexpected jump in China’s manufacturing activity in November.
Today, we have the U.S. ISM manufacturing and construction spending report.
BREAKOUT ALERT UPDATE:
Not All BreakOuts Will Work Out – LHX Chart Study
1 – Closed back below its TRIGGER PRICE on the breakout day (9/18). This is after clearing its TRIGGER PRICE earlier that day by less than 50 cents. So, not a significant breakout to start with.
2 – Closed lower the next two sessions with a sharp increase in volume on 9/20.
3 – Two trading sessions later, on the 24th, shares made new highs intra-day, then negatively reversed and closed lower. At this point, the stock had been holding its 10-day moving average, with a max position loss of just -2.2%.
4 – On the 27th, shares sold off and broke below our noted support of the 10-day moving average. They did find support at our next level, being the 50-day moving average. Closed the day with a position loss of -3.0%.
5 – Two days later there was some sharp selling of -2.4% with a close at the session lows, and well below the 50-day line. Another technical SELL signal. The stock ended the day off -5.5% from its TRIGGER PRICE.
6 – If that wasn’t enough technical deterioration, the stock continued to slide a bit further the following day.
Since then, shares had rallied up to the 50-day line several times, yet were turned back as price made a series of lower highs and developed a downward trend.
NOTE: This stock was first featured in my “Stock WatchList: Morning Update” before shares broke out. You can now start receiving my “Stock WatchList: Morning Update” each market morning through the BuyingBreakOuts website for only $9 a month or just $97 for an entire year here.
No matter the market, I always have a current watch list ready. There are now 8 stocks that we will be watching for a traditional break out to new highs.
Members can access all watch lists with updated trading criteria including – TRIGGER PRICE, TRIGGER VOLUME, and MAX BUY PRICE for every stock here.
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