Top Ten Trading Books

I had a wonderful conversation with a retail trader who has read 194 trading books.  Wow!

This gentlemen has a passion for trading and reading about trading.  I was actually speaking to him about our firm backing his trading.  He has developed a track record while working full-time in the Heartland.

For those of you trading retail who dream of one day trading pro, here is one guy taking the steps to achieve that goal.  It can be done!

I thought it would be interesting to the trading community to learn his Top Ten Trading Books since he has read so many.  (In any list like this, there will be many great contributions Read more […]
SMB Capital – Trading Education

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

Studying the Repeat Pattern that Targets New Highs for SP500

I’ve been posting frequently about the potential “Repeat Pattern” in the S&P 500 that charts a price pathway straight up toward new highs.

With price mere points shy of that target, let’s step inside the price action (per reader request) and peek behind the scenes as to what happened during the prior two “Repeat Patterns.”

We’ll start with a broader picture comparison and then drop down individually next:

To get a sense of what we’re seeing in the three charts above, take a moment to start with the prior updates:

“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

With those as your backdrop, now we can look inside the prior retracements and rallies that took price back to the prior high and then beyond it.

All we’re doing is comparing the current (August) pattern with the two most recent patterns in April and January.

In fact, when we pull them apart, we can see the individual movement that created the patterns:

April 2014:

And our current pattern unfolding to the upside (August 2014):

I wanted to highlight a quick comparison both from a planning the near-term future (as we do in the Member Reports each night) and an educational example of how buyers and sellers create chart patterns that repeat (or at least are very similar).

As long as the pattern “holds” and plays out as it did in the past, it allows us to profit from the movement (while being on guard for any “pattern breaks” or unexpected reversals).

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

Top Trade Ideas for the Week of August 25, 2014: The Rest

Written By: DragonFly Capital

Here are the Rest of the Top 10:

Burger King Worldwide, Ticker: $ BKW
bkw

Burger King Worldwide, $ BKW, had a long run higher from October until peaking under 28 in March. Since then it has consolidated on a symmetrical triangle and is now pressing against the top rail. The RSI is rising and bullish and the MACD is also rising, both supporting higher price action. Short interest is high over 9%.

Broadwind Energy, Ticker: $ BWEN
bwen

Broadwind Energy, $ BWEN, pulled back from a top at 13.50 and has gone through a rounded bottoming process since mid June. The price moved above the 50 day SMA last week for the first time since it started lower and the RSI is rising along with the MACD.

ConocoPhillips, Ticker: $ COP
cop

ConocoPhillips, $ COP, ran higher from February until it found a top in July. It has pulled back quickly since then and has been consolidating over 79.50. It has just touched the rising 100 day SMA and the MACD is about to cross up to join the rising RSI.

MBIA, Ticker: $ MBI
mbi

MBIA, $ MBI, made a double bottom at about 9.25 from July to August. It is now moving higher and consolidating under resistance at 10.50. The RSI is on the edge of a move into the bullish zone and then MACD is rising, both supporting more upside price action. Short interest is high at over 9% too.

NetSuite, Ticker: $ N
n

NetSuite, $ N, has been trending higher along rising support since June. The RSI is rising and near a cross into the bullish zone and the MACD is about to cross up. These support more upside.

Up Next: Bonus Idea

The Best

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits feed and on chartly.

After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which, heading into the last week of Summer sees the equity markets looking strong and ready for more. Elsewhere look for Gold to continue lower in its intermediate term consolidation phase while Crude Oil continues lower. The US Dollar Index and US Treasuries look to continue to the upside. The Shanghai Composite also looks strong and is biased higher while Emerging Markets try to burn through past history near resistance and may consolidate for another week in their uptrend. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The QQQ’s continue to look very strong and are biased higher while the SPY is not quite as strong on the shorter timeframe and may need to consolidate. Both are at big round numbers that could stall any further move. The IWM looks to continue to improve in its consolidation range. Use this information as you prepare for the coming week and trad’em well.

Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades.
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Visualizing the Vanishing Money Velocity Vortex……by BDI

Left without the original clean source of healthy naturally effervescent American spring water abundantly spouting up from the bedrock below, the misguided monetary authorities have dangerously attempted to artificially inseminate the clouds above, in the hopes of drenching the parched U.S. soil below with torrential rain, so as to generate their much heralded and forever […]
Slope of Hope

Up Up and Away for the US Dollar Breakout

With stocks breaking out, it may be a surprise that the US Dollar Index is also breaking through resistance.

Let’s take a look at the Dollar Breakout and highlight target levels and points to watch:

The Dollar formed a “Rounded Reversal” pattern with divergences into the $ 79.500 level (as seen on the @DX Continuous Contract).

Price broke to a new swing high in June to form a higher low – the first two steps in a Trend Reversal – ahead of July’s breakout.

Now, we see a resistance breakthrough above the $ 81.750 level which continues a three-day movement of bullish strength.

In sum, the Dollar may be poised for even higher prices into the “Open Air” territory.

What targets might Dollar traders assume could be achieved?  Let’s focus on a Fibonacci Grid:

A quick glance at the Daily Fibonacci Retracement Grid shows a dual price target into the 82.60 index level.

The confluence develops from the September 2013 swing high along with the 61.8% Fibonacci Retracement.

Note that yesterday’s breakout took price into the 82.00 Fibonacci Target while today’s breakout above 82.00’s resistance sets in motion a target play for (at least) 82.60.

For the moment, the Dollar has developed – and confirmed – a short-term Trend Reversal with the progression of higher highs and higher lows off a clearly divergent support level (Double Bottom).

The strength in the Dollar – amid all the global uncertainty – bends the traditionally inverse Cross-Market Relationship between stocks and the Dollar.

Nevertheless, monitor these two markets closely along with the potential target – and open air break – above 82.60.

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

Triangle Breakout Triggering for USDJPY Dollar Yen

FOREX traders – or those who simply monitor currencies as part of an intermarket picture – should be aware of the breakout trigger and potential expansion developing in the USD-JPY (US Dollar/Japanese Yen) pair.

Let’s take a look at the current “triangle” breakout and then compare it to prior breakouts:

First, I highlighted the current Triangle or low-volatility consolidation pattern that developed through 2014.

We see an initial trigger-break in July through the 102.000 level which resulted in a retest of the upper trendline (a great buy signal) into August.

The next phase was the “bull flag” breakout and impulsive upward rally from 102.000 to the current 104.000 target.

We’ll be focusing our attention on the simple 104.000 level for planning trades:

We’ll be “breakout bullish expansion” biased above this level and otherwise cautious beneath it.

Simply compare the late 2013 (larger/wider) triangle breakout with the retest of prior price swing highs as price traveled a pathway to new highs.

We can take the comparison back in time by comparing similar triangle (consolidation) price patterns:

I’m showing three recent weekly triangle patterns (and the expansion phases) as well as the smaller 2010 triangle.

This is not to say that price will repeat with a multi-month breakout currently, but simply to compare the past to the present.

Odds would favor a potential continuation movement to the upside, but we must always balance that against real-time price movement that may surprise to the downside.

Finally, be sure to read yesterday’s post regarding the pure Breakout Pattern in the US Dollar Index.

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

Color Keltner Channel Chart into Highs for SP500 and NASDAQ

Sometimes it’s helpful to look at one indicator at a time, and we can do that with our special “Color Keltner Channel” Chart – as seen on the S&P 500 and NASDAQ indexes.

Let’s take a look at where price trades relative to the Keltner Channel sand what message this activity sends to the market.

We’ll start with the S&P 500:

Keltner Channels plot two ATRs – Average True Range values – above and beneath the midpoint or 20 period moving average.

While Bollinger Bands reflect standard deviation, Keltner Channel bands reflect a slightly different measurement of volatility over time.

Nevertheless, the logic is roughly the same in that pushes (or touches) of one Keltner Channel extreme tends to result in a quick reversal or retracement down against the band.

I highlighted instances where price pushed and closed BEYOND the Keltner Channel.

For reference, I’m plotting a 2.5 ATR band (black line).

The main idea here is that price pushed up off the lower Keltner Channel into the upper channel without stopping.

I suggest you compare the current action specifically with February’s bullish non-stop action and then to a lesser extend with that of April.

This is just another way to show what I’ve been highlighting for you in the prior updates:

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 can see the same type of pattern playing out in the NASDAQ:

Notice how the NASDAQ is squeezed into the upper Band – similarly, you can chart prior examples of tests (touches) of the upper band.

While price could squeeze a bit higher as it did at the end of February 2014 (and June), do keep these levels in mind as you consider the new landscape for risk/reward management at fresh new highs.

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

SPY Trends and Influencers August 23, 2014

Written By: DragonFly Capital

A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators suggested, as the books were closed on the August Options Expiration and we headed into the last week of Summer that the equity markets were still with some turbulence. Elsewhere looked for Gold ($ GLD) to bounce around the 1300 level while Crude Oil ($ USO) continued to be biased lower. The US Dollar Index ($ UUP) looked toppy and possibly ready for a correction lower while US Treasuries ($ TLT) continued to be biased higher. The Shanghai Composite ($ SSEC) and Emerging Markets ($ EEM) were consolidating but with the Chinese market biased higher and Emerging Markets having trouble at resistance and looking toppy. Volatility ($ VIX) looked to remain low keeping the bias higher for the equity index ETF’s $ SPY, $ IWM and $ QQQ. Their charts showed that all looked good on the longer timeframe but the QQQ the strongest in the short term with the SPY close behind and the IWM the weakest.

The week played out with Gold pushing lower but still near 1300 while Crude Oil continued lower. The US Dollar shock off the toppiness and moved higher while Treasuries found support after a small pullback and reversed higher. The Shanghai Composite continues to flirt with a major resistance level while Emerging Markets stalled again at their 3 year resistance. Volatility fell back to the July lows paving the way for equities to move higher. The Equity Index ETF’s marched higher with the SPY making a new all-time high and the QQQ 14 year highs, but the IWM continued to lag. What does this mean for the coming week? Lets look at some charts.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

SPY Daily, $ SPY
spy d
SPY Weekly, $ SPY
spy w

The SPY continued where it left off and rose for 4 days before consolidating Friday. Along the way it made a new all-time high. The RSI on the daily chart is curling over with the doji print Friday but remains in the bullish zone and the MACD is continuing higher. Both support the doji resolving higher. The weekly chart shows follow through continuation higher off of the Hammer reversal two weeks ago. The RSI is rising and bullish with room to spare above and the MACD is turning back higher, approaching a positive cross. Very strong on this timeframe. There is no resistance higher but expect that the round number 200 could give it some pause and then there is a Measured Move higher to 208. Support lower may come at 199 and 198.30 before 196.50 and 195. Possible Consolidation in the Uptrend.

Heading into the last week of Summer the equity markets are looking strong and ready for more. Elsewhere look for Gold to continue lower in its intermediate term consolidation phase while Crude Oil continues lower. The US Dollar Index and US Treasuries look to continue to the upside. The Shanghai Composite also looks strong and is biased higher while Emerging Markets try to burn through past history near resistance and may consolidate for another week in their uptrend. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ. The QQQ’s continue to look very strong and are biased higher while the SPY is not quite as strong on the shorter timeframe and may need to consolidate. Both are at big round numbers that could stall any further move. The IWM looks to continue to improve in its consolidation range. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview August 22, 2014

Get my book, Trading Options: Using Technical Analysis to Design Winning Options Trades from Amazon.

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