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Market Commentary

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Lululemon Earnings Gap Creates Trade Spot

Lululemon Athletica Inc. just recently gapped up on earnings breaking through a daily downtrend line and challenging its previous downtrend. 

Gap Review

On September 11, 2014, LULU gapped up taking out the $43.70 pivot high of supply.  The $43.70 has become a new demand potentially establishing a transition from a downtrend to an uptrend.  On the gap day LULU traded over 28 million shares versus a daily average of 1.6 million showing us that institutions were in play on this stock in the gap...

Sep 17, 2014
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Trading: Timing Is Everything

Many traders have the experience of being right about a trade, but get shaken out or stopped out well before that trade reaches its expected target. How frustrating is that?

This usually results from several common emotionally-driven timing issues:
1)    Getting in too early due to fear of missing out.
2)    Getting out too early due to fear of giving back gains.
3)    Placing an initial stop that is too tight .
4)    Moving stops in too soon .
5)    Extrapolating from what just happened .

What an...

Sep 17, 2014
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Small Cap Stocks Are Losing Strength

The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio fell below its lows of the previous 22 months on 9/16/14, thereby reconfirming its preexisting bearish trend.

The S&P 500 Composite Index absolute price opened lower but immediately reversed to the upside. SPX peaked at 1:37 pm ET and eased slightly lower into the close. SPX closed above the open and above the midpoint of the day's high-low range. SPX also closed above the closing price lows of the previous 5 trading days....

Sep 17, 2014
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OMG, the Fed Stuff Again

Yesterday, my word for the day was “conflicted.” Today, David Moenning over at State of the Markets has his word for the day and it is …

  • The word of the day appears to be weakness.

One reason he is suggesting this is the overseas markets are showing weakness from a lack of encouraging news.

  • Asian stock markets are down across the board this morning in response to weaker-than expected FDI data in China, which showed inflows hitting the lowest level in at least two and one-half years.
  • The ZE...
Sep 16, 2014
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Spotting Unusual Options Activity In Avanir

Monday saw shares of Avanir Pharmaceuticals soar on positives news from a mid-stage study on the company’s new Alzheimer’s drug AVP-923.  Shares climbed $5.24 on the news.

Unusual Options Activity

At least one trader anticipated positive news from the study.  Monday morning at between 9:38 and 9:39 am EST saw a trader come in buy 650 AVNR Sep 10 Calls for $0.39.  Less than 10 seconds later, another 1,245 contracts in the same line were purchased. 

What Does This Mean?

With the potential to ...

Sep 16, 2014
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Featured Stories

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5 Common Misconceptions About Market Profile®

I was in junior high school the first time I was introduced to Market Profile. My Dad was a grain trader and the hedge manager for Ralston Purina, a huge manufacturer of animal feeds, not to mention the creators of Chex cereals and Rye Crisp crackers. He spoke of a friend, Peter Steidlmayer, who was devising a different way to look at markets. “Any interest in this, son?” Off I went on my skateboard as trading was not on my list of priorities, yet.

Years later, struggling to learn to trade, I ...

Sep 16, 2014
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Sixth Anniversary Of Lehman Collapse: Time To Watch Financials

This month marks the sixth year after Lehman Brothers filed for Chapter 11, an act that served as a precursor to market meltdown of October 2008.   

Six years later, and despite the amazing recovery for the general market since the market bottomed in 2009, the financials as a sector continues to lag.  

Figure 1, the 10-year PerfChart for the S&P Sector ETFs, depicts the Financials relative weakness during a decade plagued by low interest rates that created an environment for risk taking ending...

Sep 15, 2014
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A Game Plan For Trading Stocks In The Fourth Quarter: Window Dressing

Get ready for the most active season in the stock market.
 
The last quarter has the highest trading activity of the year for the stock market and for the market in general.

Here are some of the major events that traders are ready to speculate upon heading into the fourth quarter:

1.    Last earning season of the year – main reason why market will accelerate its action into the year end
2.    Black Friday / Cyber Monday so-called Cornucopia Trading
3.    Christmas Rally
4.    Quarterly Expiration /...

Sep 11, 2014
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Yes, The Market Will Crash: Here's Your Checklist To Prepare For It

With the Dow recently surging past 17,000, the debate is on about whether it is a bubble that is looking for a pinprick or if it is a strong bull market that will power past 18,000 and beyond.

Yes…it could definitely go to 18,000 or 19,000 or more in the short term because the main driver is not a bullish economy…it is the bullish impact of Federal Reserve policy. In other words, this is an artificial bull market that is driven by monetary stimulus. The danger of a pull-back or a sharp correc...

Sep 10, 2014
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Performance Anxiety For Traders: 5 Ways to Overcome It

Performance anxiety for traders is the fear, or persistent phobia which may arise in a trader by the requirement to take a real trade, in real time, with real money whether actually or potentially.

There are many causes of this anxiety which many times leave a new trader with too much fear to really trade. Fear sends them out of the markets to go join the 90% that did not make it. This fear can arise from past losses that were so big and traumatizing that a trader can’t bear the potential of...

Sep 9, 2014
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