The Shakedown 10/21/18

Vulnerable Market

From a technical perspective, the market is looking quite vulnerable as we sit and chop around at the 200 day moving average. The 200 day is seen as the long term trend indicator and we have not traded below it for more than a few sessions since March 2016. The overall market action has been pretty ugly the past few weeks and the likelihood of us breaking this area for a move lower is looking higher and higher.

Earnings season began last week so I have been focused on finding the best names with the strongest earnings, but the reality of them being dragged down by the market has been fairly obvious. Netflix is a great example where they've been a market leader for so long, posting a great earnings report which usually has their stock ferociously climbing, was instead sold off drastically in three straight sessions. 

We have a fun week slated with hundred of companies reporting throughout including Amazon, Google, and Twitter to name a few.

While there are definitely short setups out there I find the big money is made swinging to the long side, trades I find myself in for weeks on end. I state this often but the biggest advantage in the never ending quest of account building as a trader is having the ability to sit out when the action isn't right. Right now you have to have the precision of a surgeon to be killing it day in and day out, calling for a much more difficult trading environment. For the most part, keeping most of my cash on the sidelines has made this time much easier to navigate than if I was slinging my entire wad day in and day out.

With that being said, the action in the coming weeks will be very important for the overall trend of the market. With mid-term elections on the helm in November, I'm sure Trump will be pulling out all the stunts to keep this market up so the headlines are positive in that regard during the cycle. 

Click the pic above for a detailed list of all companies reporting. 

I have begun compiling my list of earnings names I will be watching for setups and you can find the names below.

With earnings firmly behind them, JNJ is looking like one of the few companies strong enough to buy this week. Through $140 this one looks to get going. Looking to keep stops tight and jsut giving this one a couple bucks.

Trigger: $140

Stop: $137.89

Target: $146-150+

Hope to see you in the chat Monday!