Wednesday, December 12th Recap
As we stated in yesterday's Closing Bell, news out of Washington will affect the market before we can even react to it. The gap up to 143 was enormous, and off the bat I was prepared to short the open move and start looking for gap-fills to the down-side. To my surprise, though, at about 8:45 the bulls took the ball and ran with it. On the hourly chart we have a perfect example of how we utilize our broadening formations. The thick black lines in the chart represent the broadening formation started after the 11/16 reversal, while the orange lines represent last weeks broadening formation when the market went flat. As we can see, once we reached the top of the orange line (the broadening formation) we have back to back inside bars which denote market equilibrium. If you break it down further, to the 15-min chart we see a breakdown beneath 143.75 on huge volume. For day traders, this is our lesson on being versatile in an indecisive market. On the daily chart, we can see that we are at a very interesting spot, as traders are trying to front-run the news out of Washington as talks heat up. As we have had some absolute great action as of late to the upside, I think it's time for a digestion period. I suggest cleaning up your positions and positioning yourself for re-entry at better prices. With the DJIA up 5 days in a row, I can say that with VERY HIGH probability that we will have a down day (and most likely a gap-up).
That being said, there are still great setups out there if you can look for them. On Twitter this morning we posted some absolute killers during the pre-market. Keep these stocks on your radar, just to name a few - CRM (at ATHs), CREE, MNST, NFLX, FB, ARNA, and LULU. There are a ton of great set-ups after today, and I could post 50 more stocks to watch the rest of this week. If you'd like to keep a closer look on how we are trading, follow me on Twitter. But for now, the name of the game right now is to do your research and be prepared for anything.
All in all, tomorrow is going to be one of two things - 1) find continuation from yesterday's move or 2) short against yesterday's highs. It's a shame that our market is so affected by outside factors, but it is what it is and you have to be prepared. My advice is to keep things simple and find setups that you are good at trading, because holding positions is not exactly conducive to this market.
Goodluck, and we'll be back tomorrow!
That being said, there are still great setups out there if you can look for them. On Twitter this morning we posted some absolute killers during the pre-market. Keep these stocks on your radar, just to name a few - CRM (at ATHs), CREE, MNST, NFLX, FB, ARNA, and LULU. There are a ton of great set-ups after today, and I could post 50 more stocks to watch the rest of this week. If you'd like to keep a closer look on how we are trading, follow me on Twitter. But for now, the name of the game right now is to do your research and be prepared for anything.
All in all, tomorrow is going to be one of two things - 1) find continuation from yesterday's move or 2) short against yesterday's highs. It's a shame that our market is so affected by outside factors, but it is what it is and you have to be prepared. My advice is to keep things simple and find setups that you are good at trading, because holding positions is not exactly conducive to this market.
Goodluck, and we'll be back tomorrow!