1
Sep

August 29 Holiday Update and Stock Scanning

Aug 29, 2014: 12:26 PM CST

While the 2,000 index level is critical to our trading decisions, buyers and sellers continue to battle for dominance at this obvious level.

Let’s update our daily scan, breadth performance, and plan for the reminder of the “holiday” session:

Sector Breadth is a bit mixed going into the holiday weekend:

Utilities (traditionally a defensive sector) top today’s sector performance, though Financials are strong as well (which is a bullish sign).

The rest of the sectors put in slightly bullish performance (60% of stocks in the sector are higher).

Still, this isn’t the picture of strong and dominant sector breadth we’d prefer to see at a new market high.

Potential bullish trend day continuation (buy retracements) stocks include the following:

Avago Technologies (AVG), Marathon Oiil (MRO), AGL Resources (GAS), and Electronic Arts (EA).

Bearish “intraday reversal” or downtrend continuity stocks include these candidates:

Schlumberger (SLB), Fluor (FLR), Michael Kors returns (KORS), United Tech (UTX)

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

30
Aug

Answers to the Top Three Questions about Computers for Traders

When working with traders, I’m often asked questions about desktop (or even laptops while on travel) computers and set-ups specifically designed for traders.

As an educational post, I wanted to offer a few answers to common questions from my new friends at EZ Trading Computers who have a wealth of resources for designing computers specifically for traders.

Today’s guest post comes to us from Russ “Eddie Z” Hazelcorn where he answers the top three questions traders have about their computers:

#1. Desktop or Laptop?

Desktops and laptops have different roles in your trading. The most common mistake that you can make is viewing them as the same tool. Each device should be used when the circumstance fits its abilities. You can’t take your desktop on a business trip. No sense in trying to fit it in your briefcase. Desktops are not designed for this use.

During a business trip or when you are away from your office, laptops will suit you well. However, trading on a laptop full time isn’t a good idea either. Laptops don’t have the ability to offer you the speeds that a desktop will. Their parts are compact in order to offer you mobility. Desktops don’t have to fight that battle. They have the room and the cooling system to give you the blazing fast speeds your trading demands.

Like most people, you probably own a variety of devices – a desktop, laptop, tablet, and smartphone. Each one of these offers you power and convenience for different occasions.

#2. Best operating system for Trading Computers?

As a Trader, you should stick with windows operating systems for trading. As of April 2014, there is one less Windows OS choice available to you. Microsoft is no longer supporting Windows XP. Fifty percent of traders we have surveyed are still using XP. This is not good. XP has been on the market for 13 years. It’s time to move on to bigger and better things. If you are on XP, don’t use it. It is a security risk and frankly at 32-bit it is not powerful enough for you.

We have done all the hard work and research for you. Based on field-testing and feedback from traders like your self, Windows 7 is the clear choice. You will enjoy all the familiarities of XP’s workflow with out the restrictions of XP’s outdated technology.

You could choose to move straight to Windows 8 for your trading computer. If you can handle the mobile centric navigation, Windows 8 might be the right fit for you. For most traders, the learning curve in changing to this different style of navigation is just an unwanted distraction.

#3. What Type Of Internet Connection Is Best?

You need blazing fast Internet speeds. Don’t try to save money by not opting for the highest speeds your Internet service provider offers. As a serious trader, your business expenses for a 100 mbps connection are relatively cheap compared to losing capital in lost executions.

You will want to make sure that your high speed Internet connection is wired instead of wireless. The main concern with your trading computer and Internet connection is reliability. Wireless just doesn’t offer the level of reliability that you need as a trader. It wouldn’t be a bad idea to install a backup Internet connection also.

Use online tools to test your speeds. This is a great way to figure out what you are currently receiving, and if that matches up with what you pay for. You would be surprised at how often consumers pay for Internet speeds that they never get due to high traffic in your service area.

About Our Contributor:

Since the day he took his first Commodore Vic 20 apart, Russ “Eddie Z” Hazelcorn has been obsessed with making computers more powerful and more functional. At the age of 18 he started working on Wall Street filling out paper charts and since then has learned to combine his passion for building computers with stock trading. If you’d like to find out more details about what to look for in a trading computer, he’s created a buyers guide.

Go to EZTradingcomputers.com (I am an affiliate) to get your free copy.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade


Afraid to Trade.com Blog

28
Aug

August 28 Intraday Stock Scan and Market Update

Aug 28, 2014: 12:17 PM CST

Our key focal level for the S&P 500 continues to be the simple 2,000 index level and we’re monitoring any further sign of retracement or down-movement against this level.

Either way, we’ll focus all our attention on the 2,000 index level as mentioned in this morning’s earlier post.

Reference the earlier chart along with the bearish picture painted by today’s Sector Breadth:

Our strongest sector is the Utilities sector where 90% of stocks are positive right now.

Energy trails Utilities and Materials returns the third strongest performance today.

Our weakest sector today is Industrials (followed by Financials – not a bullish sign).

Potential bullish trend day continuation (buy retracements) stocks include the following:

Southern Co (SO), DTE Energy (DTE), FMC Corp (FMC), and Dr. Pepper/Snapple (DPS).

Bearish “intraday reversal” or downtrend continuity stocks include these candidates:

Fossil Group (FOSL), Lockheed Martin (LMT), TripAdvisor (TRIP), and FedEx (FDX).

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

27
Aug

FT: Flash boy Katsuyama on market structure

Brad Katsuyama, founder of IEX, the investors’ exchange, who featured in the high-frequency trading novel ‘Flash Boys’, talks to Nicole Bullock about the conflicts exchanges face and what he thinks should be done to achieve neutrality in the market.

FT Trading Room

25
Aug

Bearish Engulfing Opportunity in Altera ALTR

Altera (ALTR) showed up on two of my stock scans this morning and I wanted to share the chart both as an educational resource and a potential trading opportunity.

Let’s see the chart and discover why this stock appeared on two separate scans:

First, Altera (ALTR) appeared on my morning “Consecutive Closes” scan as the stock that has closed the MOST times to the upside in the S&P 500.

To be specific, ALTR has closed higher 11 days in a row.

I’ve been including daily results of this scan in the Daily Membership report (it provides aggressive yet short-term trading opportunities).

The 11-day consecutive rally has taken price from the lower Keltner Channel ($ 33.00 level) to the current location above the upper Keltner Channel ($ 35.00 per share).

There’s another reason we’re interested in this stock – see if you can discover it before I reveal the answer:

At the moment, Altera is developing a Bearish Engulfing intraday candle where today’s open gapped up into the $ 35.00 per share level and price traded lower all day so far.

As a result, today’s candle is engulfing or trading beyond yesterday’s high and low.

This is a traditional candle pattern that often appears at turning points or short-term reversals in price.

While it’s fun to scan for bearish engulfing candles, we can’t just take them in isolation.  Place the candle pattern in context of resistance levels, divergences, trend strength or weakness, etc.

Our three factors that argue for a potential short-term reversal – and thus bearish candidate – include:

  • Eleven days in a row to the upside (into resistance)
  • A Bearish Engulfing Candle Pattern
  • A “poke” and close above the daily Keltner Channel

While not guaranteed, odds do favor a stall/pause into current levels as opposed to an alternate thesis breakthrough continuation higher.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

24
Aug

August 21 Stock Market Update with Trending Stock Scan

As we continue yet another trend day to the upside, let’s highlight the price action, sector strength, and identify the strongest trending stocks so far at mid-day in the bullish session.

We’ll start with the S&P 500:

I’ll let the chart speak for itself but will again reference the series of posts I wrote leading to this point:

Studying the “Repeat Pattern” that Forecasts New Highs for the S&P 500 (achieved!)

“Onwards and Upwards to New Highs for the S&P 500?

Planning a Breakout (from a Repeat Pattern) in the S&P 500

S&P 500 “Breaks on Through to the Other Side

Decision Point for the Dow Jones

We’ll be carefully watching news for the rest of the day as the indexes trade through new highs (the S&P 500 seems to be pulled higher like a magnet to 2,000… or perhaps a moth to a flame).

Sector Breadth – as you might suspect – reflects bullish money flow:

Our strongest sector today is the Financials (which was confirmed when multiple financial sectors stocks appeared in our screen) while the weakest sector is Energy.

Discretionary is the second weakest sector while Utilities turns in the second strongest performance today.

We’ll focus our attention on potential bullish trend day candidates into the close:

eBay (EBAY), Amphenol (APH), M&T Bank (MTB), SunTrust Banks (STI) along with other regional banks.

For those who ready themselves for reversals, here are potential bearish downtrend continuity candidates:

Wynn Resorts (WYNN), Whole Foods Market (WFM), Norfolk Southern (NSC), and Google (GOOG).

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

22
Aug

Charting Apple AAPL Through the 100 Dollar High

Last week I posted about “Open Air” and magnet levels in Apple – let’s update the chart now to focus our attention on the $ 100 per share level (now achieved) which has served as a floor of support.

Here’s the Daily Chart with the progression to the new highs:

First, start with a little background on the “Apple Through Value Areas/Magnet Levels” post from last week.

It targeted a distant “Magnet Area” into $ 100 as long as price remained trading above the $ 95.00 Magnet Level.

Indeed, this outcome occurred a bit faster than expected (price simply moved through an “Open Air Pocket”) and not only have shares achieved the $ 100 simple target level, but they just exceeded them strongly today.

Despite two doji reversal candles into the upper Bollinger Band this week, buyers triggered a short-squeeze and continued the multi-day rally up from $ 94.00 through $ 100.

While there were progressive negative momentum and volume divergences, buyers stepped up with higher activity during the recent August rally (green highlight).

We can see a closer perspective on the intraday chart:

Shares ended a short-term downtrend into the $ 94.00 level and thus began a powerful, “creeper” trend impulse that forced bears (short-sellers) to cover at the same time bulls (buyers) bought into the uptrend or added to current positions.

Creeper trends tend to be confusing because they don’t allow for clean entries (such as pullbacks or ‘flags’).

At this point, our simple focal point will be the $ 100 per share “floor of support” that – if broken – opens a sell-off phase toward lower levels such as the $ 98.00 gap and $ 97.00 level (or lower should the broader market reverse).

But until a reversal under $ 100 occurs in real-time, shares may be poised to continue “creeping” higher as bears buy-back to cover and bulls rush in aggressively to join this strong stock in a potential breakout impulse.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

20
Aug

Hidden Trading Opportunities from August 20 Consecutive Close Scan

Sometimes the simplest scans can provide stock candidates to trade that we otherwise may never have spotted.

Here’s the results of today’s “Most Closes in the Same Direction (up)” scan from TradeStation:

Lesser-known stock Illinous Tool Works (ITW) has closed 11 days higher – that’s worth a closer look:

We can see shares trading back up into the resistance target of the prior high from June ($ 90 level).

Notice the secret straight-up rally from the $ 81.00 level into the current target.

Very aggressive traders may view this as a “short an over-extended stock into resistance” opportunity and that would be the logical thing to do.

However, a breakout beyond the $ 90.00 level triggers a bullish breakout potential opportunity which could extend this 11 day streak.

Of course, a reversal (or retracement) down against the prior high is far more likely than an extension of the 11-day streak but plan and trade accordingly.

Popular stock Amazon.com (AMZN) also tops the list of consecutive up-closes today:

While you’re likely more familiar with Amazon (AMZN) than Illinois Tool Works (ITW), you may have missed the fact that Amazon shares have traded nine days in a row straight up off the $ 310 support pivot (from a gap) into the current resistance cluster near $ 340.

This similarly opens a “Will it Breakout” or “Will it Retrace” unbiased game-planning scenario for your next trade.

A logical movement down becomes an aggressive short-sale opportunity (stop above $ 340) while an alternate breakout set-up (short-squeeze) may trigger above the $ 340 level.

These are just two candidates that offer further study and trade planning from our simple stock scan today.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

19
Aug

August 18 Breadth and Stock Scan Market Update

Our mid-day update takes place on yet another bullish trend day higher as price breaks through resistance toward the prior highs, as I’ve been highlighting recently.

For our S&P 500 update, see this morning’s post “On and Up to New Highs for the S&P 500” along with the recent “Breakout from a Repeat Pattern” post.

In sum, the market is doing exactly what it should be doing in order to complete a “Repeat Pattern.”

To further put the odds in the Bullish Camp, let’s take a look at today’s strong Sector Breadth Chart:

Unlike Friday’s chart, we see strong Sector Bullishness across the board – underscored by the dismal performance of Utilities today (only 1 of 27 S&P 500 Utility stocks are positive right now).

Our other relative strength laggard is Energy while all other sectors – Bullish along with the defensive Staples – enjoy strong sector performance.

If you’re looking to play trend continuation trades, focus on the following names which could trend higher into the close:

Dollar General (DG), Family Dollar (FDO – both in merger news), Yum Brands (YUM), and Mosaic Co (MOS).

If you can’t resist fighting the tide of money into the market, focus on these potential bearish sale candidates:

Conoco Phillips (COP), Monster Beverage (MNST – retracing after a strong Friday), Loews (L), and Microchip (MCHP).

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

17
Aug

Uncovering a Hidden Value Area for Apple AAPL Shares

What are our Color Value Area Charts revealing about a key magnet price area to watch in Apple (AAPL)?

Let’s take a look, starting with the Daily Chart:

The TradeStation Indicator is the Trigger Charts Radar Indicator, designed to show “Market Profile” concepts in a colorful, visual format.

For simplicity, focus your attention only on the yellow lines (and the tight red clusters near the yellow lines) which represent “Time at Price,” or significant levels where both price has traded at “high volume” nodes (levels).

Keeping it simple, we can look back to prior yellow lines and compare them to current yellow lines on the chart.

We see a “hidden” triple node (three yellow lines) near the $ 95.00 per share level which should be our current focal point.

Above that we see a node into $ 100 per share which appears to be a likely target towards which price is being pulled.

Yes, there’s more you can learn from the chart above, but let’s just focus on the Magnet Node into $ 95.00 and the upper line from October 2012 into $ 100 per share.

We can zoom-in for intraday or swing traders to discover more short-term nodes (yellow lines) for planning trades:

The 30-min chart – which is a more traditional “Market Profile” style representation – highlights three short-term value areas from July through August.

First, we have the lower cluster (as I showed on the Daily Chart) into the $ 95.00 to $ 95.00 per share level (key magnet).

Next, we have the current cluster where price is trading currently into $ 97.50 per share.

Finally, we have two smaller clusters above price near $ 98.75 per share.

In general, price tends to gravitate (trade) toward a target cluster through “Open Air” which are represented as Blue Zones, or levels that aren’t Value Areas.

Price can move quickly through Blue Zones toward Yellow (or tight red) zones.

Whatever strategies you’re using to trade Apple (AAPL) shares, keep these value area clusters in mind as targets and inflection levels (like magnets).

Afraid to Trade Premium Content and Membership

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog

© Copyright 2010-2014 Investing Advisers. All rights reserved.