Sell Owens Corning For a 17.3% Win

UPDATE 10-26-2017: Sell Owens Corning for a 17.3% win in 48 days and congrats if you made money on the trade.

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SINA Corporation Growth Stock For Your Watch List

SINA Corporation is an excellent looking growth stock to add to the watch list. The company has grown earnings 1,350% and 159% the past two quarters. The company's earnings per share will zoom up 109% this year. I think this stock could go up 100% within the next 52 weeks.

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Delta Airlines Stock Does Candle Over Candle Reversal

Delta Airlines stock has formed a candle over candle reversal on the chart. The large players volume is uptrending and the CMF has just broken above the zero line.

Five years ago, Delta Air Lines bought a refinery to protect against the risk of high crack spreads. In the wake of Hurricane Harvey, Delta's move now looks brilliant as it totally insulated itself against crack spreads, something their competitors did not do.

Hurricane Harvey has pushed the crack spread up more than 100% at the beginning of September. The crack spread has since come down but it is still at a very elevated level as the chart below shows.

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S&P 500 Watch Out For Headfake Going Into End of September!

The S&P 500 did a breakout today but I’m thinking it will turn into a headfake as the market goes down the week of September 25 – 29th. Be careful buying the S&P 500 because it did a breakout today. I’m thinking we get a sideways chop out for the rest of the week and then next week we get a sell off.

S&P 500 chart setting up for possible headfake.

The main reason I think this will happen is that September is the worst month of the year for the stock market. Specifically, it’s the last week or so in September that gives the month its bad reputation. But it’s more than seasonality.

Notice the big negative divergence on the CMF. We should have stronger buying pressure with the S&P 500 doing a breakout and hitting a record high. That’s really pathetic buying pressure as evidenced by the CMF which means we have an elevated risk of a headfake move.

S&P 100 Index Put/Call Ratio

The S&P 100 Index looks like a possible exhaustion gap up. Notice how the Equity Put/Call ratio chart looks like a coiled spring ready to pop to the upside:

Equity Put Call Ratio chart

If the gap up on the S&P 500 is an exhaustion gap, then tomorrow we would expect the gap to fill. If it’s a more bullish breakaway gap up, then tomorrow could gap up again as the S&P 500 hits new all-time highs.

What is the catalyst for driving the market higher? President Trump’s corporate tax cut may not happen as Mnuchin admits here. Here is a stock trading lesson on catalysts for your review.

The market exists to screw the greatest number of amateur traders at any given time. The S&P 500 hitting all-time highs during the weakest month of the year smells foul. What a great way for professional traders to really screw a lot of amateur traders! Buyer beware.

Amazon Stock Twiggs Money Flow Breaks Positive

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Investors Pile Into PIMCO High Yield ETF

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Nasdaq Advance Decline Gives Swing Long Buy Signal

The Nasdaq Advance Decline ratio chart gave a swing long buy signal on Friday, August 25, 2017. The Advance Decline ratio chart shows the number of stocks that advance in value to the number of stocks that decline in value over a given time period. An increasing advance decline ratio signals a bullish trend while a decreasing advance decline ratio signals a bearish trend.

Nasdaq Advance Decline Chart

Nasdaq Advance Decline chart gives swing long buy signal.

It wasn’t just the Nasdaq Advance Decline chart that gave a Parabolic SAR buy signal. The S&P 500 Volume Advance Decline chart also fired off a SAR buy signal on Friday, August 25, 2017.

SP 500 Advance Decline chart gives swing long buy signal.

The thing you need to know about market breadth (advancing stocks versus declining stocks) data is that the exchanges do not publish the data themselves. It is left up to the data providers like StockCharts.com. The exception to this is the Common Only A-D numbers generated by the NYSE (which formerly were available on the NYSE web site a day later). The differences you see in market breadth data are because of the different databases and datafeeds run by stock market data vendors. In order to calculate advancing and declining issues, a data vendor must first know what stocks are traded on the exchange. A data vendor must know the price at which each stock closed yesterday. The data provider must know the current price of each stock and be able to compare that to yesterday’s close to determine if a stock counts as an advancer or decliner.

Both the S&P 500 and Nasdaq Advance Decline ratio charts do not support the more bearish price action on the S&P 500:

I think in all cases with the Parabolic SAR buy signals, we need confirmation above the SAR buy level to confirm the signal. The S&P 500’s bearish inverted hammer candlestick on Friday does not support the SAR buy signals. Furthermore, the TSI is still giving a bear signal and the CMF just went negative which is yet another bearish signal.

TheStreet published an article on Friday, August 25, 2017, about the strong market breadth here.

Over the last three trading days, the S&P 500 has been doing a late day fade which also favors the bears:

Late day fades on the SP 500 last week.

For more advanced day traders, I did this lesson on day trading stocks and late day fading.

Playing Falling Cocoa Prices in The Hershey Company Stock

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Stock Market Correction and Waiting To Click The Buy Button

The stock market correction is likely going to push the S&P 500 to test its long-term rising trendline and support at 232.20. The bearish divergence on the Twiggs Money Flow likely signals that the pull back is not over yet.

Short-term stock market correction underway.

A few traders have asked me if now is the time to buy or if they should wait on the sidelines while the market pulls back. We all know that history does not predict future price direction nevertheless, it is useful to know what has and hasn’t happened in the past.

Looking at the last 110 years of stock market price action, the data reveals that waiting for a correction when the market was expensive would have reduced investor returns significantly. The reason is that the term “expensive” is a subjective term. Even if you use a more objective approach of looking at the P/E ratio, the data still shows that staying out of the market for months or even years waiting for a correction is a losing strategy.

Where long-term investors get themselves in trouble is that the correction they are waiting for may occur at a much higher market level than it is at today. Also, sitting on the sidelines for months or even years runs the risk of the investor losing patience and ultimately capitulating to the Bulls and buying back in to the market at a much higher level.

Few investors believe markets efficiently follow a random walk even though it’s a key component of market theory.

Short Term Stock Market Correction

Timing a stock market correction for profits is best done using a short-term swing trading strategy. The idea is that you don’t want to try and catch a falling knife.

Looking at QQQ, the Russell 2000, and the S&P 500, over the last week, you can see that the Russell 2000 and QQQ are leading the S&P 500 lower:

In stock market corrections, the Russell 2000 usually leads the other major indices lower.

The market is telling us that what happens in the FANG stocks and QQQ will likely dictate market direction on the S&P 500.

With the Twiggs Money Flow breaking below zero for the first time in 2017, I think a retest of the $136 support level is likely.

Right now being in cash is an excellent move. Continue to stalk your favorite stocks for a swing long entry. I wouldn’t be too quick to jump back into this market yet. Consider using stop limit orders as taught in the lesson here.

The main thing to watch out for is the Establishment ‘Defeat Trump’ propaganda in the WSJ, CNBC, CNN, and elsewhere. These media groups are so dishonest that some were even claiming that the stock market went up because Steve Bannon left the White House. That was the propaganda narrative with CNBC claiming that traders on the NYSE floor cheered as proof. First of all, those old left-leaning talking heads in stock exchange clothing walking around looking stupid on the NYSE floor are not representative of the stock market as a whole.

Just as the Establishment media was advancing the false narrative that markets were up because of Steve Bannon being out at the White House, markets turned back down and so they quickly killed that false narrative. Another example is CNN’s propaganda that the entire market is worried because of Trump.

For the first time in our life-times, we have a President who is exposing the Establishment propaganda media in this country. There is a major information war going on right now.

As a trader, you can’t get caught up in the propaganda and the power struggle going on for control of public perception. You have to check yourself every day and make sure you aren’t making trading decisions based on propaganda. If you think the mainstream media is getting into your head too much, cancel your subscriptions like I did with CNBC Pro last week, and the WSJ and Barron’s the month before. Just turn it off because these propaganda machines are not going to help you make more money at stock trading.

Remember folks, markets mostly do random walks, especially during intra-day trading. No left-leaning propaganda media outlet can peer into the minds of millions of traders around the world and claim to know what they are thinking. These propaganda publications believe that perception is reality so if they can control the public’s perception, they can control reality.

The U.S. stock market is overbought, and the weak seasonal period is upon us. May through October marks the weakest 6 months of the year.

I don’t want to beat up on the mainstream media too bad so I’m not going to mention where I read the following bogus analysis:

Overbought markets look for excuses to sell off. Will Trump’s lack of leadership become an excuse for a big selloff in stocks?

The mainstream media is actually talking about a stock market correction as if it is some type of external beast that thinks for itself and makes up excuses. Reality check: you and I are the markets. People that work at institutional trading firms and hedge funds are the markets. Are you looking for an excuse for the market to sell off? I’m not either. Nobody is. We’re just reading the charts, analyzing the fundamentals, weighing external news events, and making our decisions. Nobody is searching under desks and looking everywhere for excuses to sell out of their positions. Especially not some make-believe entity called Overbought Markets.

Did you notice the Establishment propaganda “Trump’s lack of leadership…”? You can criticize the President on a lot of things but one thing you can’t criticize him on is a “lack of leadership”. President Trump is a strong leader with strong ideas and a vision on which he is moving to execute those ideas. Get in his way and “you’re fired”. Trump demonstrated his very strong leadership skills for over a decade on the hit-show The Apprentice. President Obama isn’t even in the same ballpark as President Trump when it comes to having strong leadership skills.

Mainstream media propaganda about stock market corrections.The main factors influencing a short-term stock market correction right now are: the speed of Fed rate hikes and balance sheet reduction, North Korea, the debt-ceiling, the economy, and the speed at which the Trump America First agenda is moving forward. Anything outside these main themes is likely Establishment propaganda by powerful groups battling to control public perception and thus reality.