8:30 – MORNING MARKET UPDATE & WATCH LIST
NOTE: Today’s watch list can be found here.
After some signs of initial weakness during the previous week, the market entered its deepest correction of 2019 with the Dow being down -3% mid-day this past Friday.
QUOTE OF THE DAY:
“Success isn’t always about greatness. It’s about consistency. Consistent hard work leads to success. Greatness will come.”
– Dwayne Johnson
The fact that a -3% dip qualifies for that shows just how strong the advance of the past two months has been.
The major averages, closed lower every day last week as several issues weighed on investor’s sentiment.
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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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We had continued uncertainty over a U.S.-China trade deal and the European Central Bank, which announced new measures to support a slowing economy on Thursday. On Friday, there was a lackluster jobs report and a sharp drop in Chinese exports which heightened worries around the global economy’s overall health.
The Dow Jones lost -2.2% on the week and posted its lengthiest slide since an eight-session skid that ended June 21st. Next support for the blue chips is at the 50-day moving average, currently at 24,809.
Chart courtesy of stockcharts.com
For the week, the Nasdaq declined -2.5%, marking its weakest stretch since April 25th. The tech-laden index pulled back from noted resistance of some prior highs, then quickly sliced its 200-day moving average.
Chart courtesy of stockcharts.com
The S&P 500 index fell -2.2% for the week, as it was turned back from a previously noted area of resistance of the former highs. This was the bellwether’s worst string of losses since November 14th.
Chart courtesy of stockcharts.com
All three of the benchmarks remain well north of their rising 50-day moving averages.
Also of note, the Dow Jones Transportation Average has fallen in 11 consecutive sessions. This is the lengthiest series of losses since 1972. The index is a proxy for the health of the overall economy, and the stumble comes amid increased fretting over the health of the global economy.
As I stated last week:
- The Nasdaq may now be facing some resistance of its previous highs/lows.
- The S&P 500 – 2815 is the previous highs and that level now deserves watching.
- The market’s current rally-run has been impressive, but could possibly be starting to consolidate here.
We now have 6 distribution days on the S&P 500, and 5 on the Nasdaq.
In a mid-week update to Portfolio Members, I stated – if there is now clearly a sharp increase in the number of distribution days, that’s not good for bulls.
The general rule is – that five or six distribution days over a period of about four weeks can be a signal that the market’s uptrend is weakening.
I ran my routine stock screens over the weekend and added 3 new stocks to our watch lists.
We still have 22 stocks on our watch lists. – see here.
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 email@example.com 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.