inthemoneystocks

With earnings a week from Thursday, I like $KHC. Has a 5% dividend yield, Buffet owns a big chunk. Investors expect horrible news (expectations low). Stock trading at multi-year lows. Chart in extreme oversold area. It has all the makings of a bounce. -Gareth Soloway

Here's The Chart That Every Market Pro Is Watching $JNK As you all know, the major stock market indexes staged a sharp correction in December. The S&P 500 Index bottomed on December 26, 2018. Since that low pivot, the S&P 500 Index has rebounded higher by more than 15.0 percent. Since that rally began many things have happened. First, the Federal Reserve has moved into a more dovish stance. Second, it looks as if the U.S. And China are getting close to an actual trade deal. While these important factors are major catalysts for the recent rally many market participants like myself prefer to follow a chart indicating that liquidity is in the system. Now here is the chart that every pro trader and investor is following, it is the SPDR Bloomberg Barclays High Yield Bond ETF (JNK:NYSE Arca). You see, this ETF tracks the U.S. high yield corporate bond market. This has been used by myself and many professional traders to track liquidity in the system. Simply put, when there is liquidity in the system it allows stocks to move higher. When the liquidity drys up it tells us that stock can no longer climb the wall of worry. This was the case in February 2016 when the S&P 500 Index staged its last major correction. The latest low for the JNK was on December 26, 2018. So now you can see the correlation. Nick Santiago InTheMoneyStocks

This coming Friday is options expiration for the month of January. Usually, the trading week leading into options expiration is filled with a lot of game playing by the institutional crowd. This is generally a time when there will be a lot of rumors, ridiculous upgrades / downgrades and often some other far fetched news event. The bottom line, expect the unexpected during options expiration week.Since December 26, 2018, the major stock indexes have surged sharply higher. Now with so many stocks trading off of their lows we could see a pullback this week. But then again, I have to think that after the Christmas Eve sell-off there are probably a lot of retail investors still holding put options into this expiration on a lot of the leading indexes and popular stocks. If this is the case, then the major stock indexes will probably hold up this week. This week is also the start of earnings season. As you know by now, the street is looking for the earnings picture to be weak. At least that is what the market usually looks for when we have such a sharp correction like we have seen. In other words, market expectations have been lowered. So any surprise in earnings could certainly help the markets this week. Either way, traders will have to look at every stock on an individual basis. Many market leading stocks are trading into resistance, while many others are still lagging and should have a way to go before reaching a major resistance point. Just remember, this is a week to be on your toes as options expiration is usually filled with game playing and lots of whipsaw. Nick Santiago InTheMoneyStocks

Trading An Oversold Market Almost everyone in the trading business is talking about an oversold market at this stage of the game. Stocks are now entering correction territory and there could still be more selling down the road. Generally, some of the best rallies come during a bear market and this makes many traders such as myself willing to take a shot at the long side when stocks are so low. Unfortunately, the stock bounces that we have seen lately have been met with heavy selling pressure. Often, traders will try to find many important timing factors for trades and hopefully we are entering one right now. Either way, traders and investors must still be very careful when it comes to markets like this. One old market saying that I have learned over the years is, it’s not how they open them it’s all about how they close them. This means that the intra-day action is really pointless if you do not see a strong finish into the closing bell. Since the December 3rd pivot high we have only had two sessions that have finished stronger by the closing bell than where price has opened. In other words, there have been just two green candles on the daily chart if you view a daily candle stick chart. Today, stocks are rallying higher intra-day, but it will be the closing prices that will tell the tale. In the past, when stocks have behaved this way there has always been a few hedge fund blowups out there. So far, we have not heard of that happening yet, but these things can take some time to come to light. Either way, keep an eye on the charts and let the market tell you what to do.Nick SantiagoInTheMoneyStocks

Stitch Fix Inc $SFIX Tags Major Support Level, Buy Triggered Shares of Stitch Fix Inc (SFIX) collapsed over 25% today on the back of poor earnings/guidance. The stock now finds itself trading below $20, down from a 52 week high of $52.50. While it appears to be doom and gloom there is some major light for technical traders. Stitch Fix tagged a major pivot low from June 2018 at $18.40 today. This pivot low signals a likely flush out of weak hands and the bounce signals accumulating by smart money. It would not be far fetched to see Stitch Fix trade back to $25 in the coming months. Gareth Soloway InTheMoneyStocks

As you know, all of the leading video game developers have been under selling pressure since October 2018. Video game developer stocks such as Activision Blizzard Inc (NASDAQ:ATVI), Electronic Arts (NASDAQ:EA) and Take-Two Interactive Software Inc (NASDAQ:TTWO) are all trading sharply lower again today. When a stock fails to catch a bid when the market is rallying it is usually a sign of further weakness. Activision Blizzard Inc (NASDAQ:ATVI) is breaking its 200-week moving average today so this stock is now on my radar for further near term weakness. The next major support level that I see for this stock will be around the $40.00 area. This level is where the stock broke out in February 2017. Should ATVI stock back-test this level it should lead to a nice swing trade opportunity. Nick Santiago InTheMoneyStocks

This Blood-Bath Decline Will Lead To Another Monster Buy, But Can You Spot The Turn? Finally, we are starting to see a little fear on Wall Street. Yes, this could be the perfect storm. After all, we have yields rising on the 10-year U.S. Treasury Note, U.S. / China trade wars, a stronger U.S. Dollar, weak emerging markets and a never ending investigation against President Trump. There are actually even more worries in the pipeline, but these are probably the most important concerns that affect the stock market.Traders and investors must now be patient and start to look for the potential opportunities to arise. We must realize at some point the Federal Reserve will probably stop raising interest rates. Eventually, the United States and the Chinese government will come to some type of an agreement on trade and intellectual property, both countries rely on each other for economic growth. The emerging market economies will find a bottom sooner or later, but this will probably be dependent on currency, interest rates and a few other factors. As for the investigation into the Trump administration and Russian collusion, while it gets more bizarre more the day and actually seems far fetched at this stage that it will turn into something major, this is still a wild card for the markets.The bottom line is that the corporate tax rate in the U.S. is 21.0 percent. This makes the United States one of the most competitive countries in the world right now. Once these and other problems have some clarity and resolutions the markets in the United States should continue to expand. Now please understand, if these problems are not solved then there could be some real repercussions out there for the stock market. Until then, stay nimble and look for the charts that are signaling a bottom. After all, the S&P 500 Index is about 4.0 percent off the recent highs and still positive in 2018. Nicholas Santiago InTheMoneyStocks

Netflix $NFLX Hits Max Move As Smart Money Shorts/Sells Shares of Netflix (NFLX) hit their max upside level today at $370. This is the daily 20 moving average as well as a kissing the 61.8% Fibonacci retrace level. Ultimately, the stock has soared nearly 20% in the last week. Look for a significant drop in price back to $350 in the coming days. Gareth Soloway InTheMoneyStocks

Could Get Nasty: What This Trend Line On Boeing Co $BA Shares of Boeing Co (BA) have been hovering just off of all-time highs for the last 8 months. Trade war fears have kept it from making new highs as apparent distribution continues. Distribution is where big money sells to smaller investors or dumb funds. As of now, Boeing is safe. However, if it breaks the trend line shown on the chart below, watch out below. The stock could fall quickly to $300 or below. This trend line is a major technical support that has been holding. If it gives way, there is nothing below until $295.00. Gareth Soloway InTheMoneyStocks

One of the most important reasons why traders take big losses is because they often fail to recognize when a trade has gone wrong. You see, stopping out of a trade is probably the biggest fault of traders and investors. Often, this happens to young and inexperienced traders and investors, but I know many veteran traders and investors that struggle with this as well. Early in my own career I struggled with stopping out of a bad trade myself, so I can sympathize with this problem. The problem with taking a loss is really two fold. First, the trader has to admit that he is wrong. As you all know, as human beings we all hate to be wrong. The ego simply gets in the way and we all want to always be right all the time. The first secret in this business is to check the ego at the door. The market does not care about your the color of your skin, religion or anything else. It will move in the direction of the money and that is the bottom line. Once a trader or investor goes into what I call 'hope mode' the trade is over. I'm sure everyone has been in this position at one time or another. Simply put there is no room for ego or hope in the stock market. The market is always right and there is no reason to fight it. Here is the second problem with taking a loss, it hurts. Pain and pleasure are the two reasons why humans do anything at all. As a human being, we are always looking to have pleasure and avoid pain. Well, losing money is painful and many people would rather simply hold a losing equity than lock in a small loss and move on. I cannot tell you how often I see a trader hold a losing trade only to see the position move further out of the money. Many years ago I watched a day trader blow up a $200,000 account in a single day averaging in on a bad day trade. To this day I can remember the look on his face as his money vanished in thin air. Believe it or not, this trader could have exited the position with a $500.00 loss, but instead he kept averaging in and fighting the position until he was wiped out. As a rule, once you have your full position you should never average in on a trade. At that point, it is critical to know where your max loss is going to be and stop out if that level is breached.Now when should we stop out? The answer to this question is not that simple, but here is what I personally do. I always place my stop loss below an important breakout or pivot on the chart. You see, prior breakout or pivot levels are usually defended when retested. After all, this is usually an area where institutional traders and investors got involved, that is why there is a pivot low or high on the chart to begin with. If that level is breached on a closing basis then I will move out of the position. So If I took a trade based on a daily chart pattern then I will usually check the daily and weekly chart levels. If there is a major pivot on the weekly chart then I will use a week chart close as my stop out level. While this method may not be perfect, it has saved me from much bigger losses when I have been wrong. Nicholas Santiago

The U.S. Dollar collapsed sharply today after Secretary of the Treasury Steven Mnuchin said the United States wanted a weaker currency. This statement comes after the U.S. Dollar has already fallen sharply since President Trump took office. While a weaker Dollar inflates asset prices which is likely the reason for the comment, it hurts lower and middle income Americans as buying power degrades and inflation jumps higher. Anyone who is not invested heavily in the stock market is seeing their real buying power drop with oil prices surging and other prices jumping in response. Investors on the other hand are loving it. Those with millions and billions invested in the stock market are noticing that every time the Dollar drops, the stock market jumps higher. In fact, it can be argued that there is a bubble in the stock market because of the weaker Dollar. The bottom line is, we should all be careful of this uber weak Dollar policy. There will be repercussions in the future for all Americans. In looking at the stock chart, it clearly shows the exact spot it will fall to. Using the Dollar ETF $UUP, the U.S. Dollar will hit major pivot highs from 2012 and 2013 at $23.00. That means there is still some near-term downside because a technical support is tagged. Lastly, please be aware that just like with Federal Reserve policy on massive money printing and how global central banks followed suit, other governments will start to devalue their currency in response. This ultimately is a long-term positive for gold, silver and Bitcoin. Gareth Soloway InTheMoneyStocks

Tesla Inc (NASDAQ:TSLA) has been trading in a bearish consolidation pattern for the last few months. Every time the stock tags the upper band of the consolidation pattern it is a dead on short. In addition, eventually this bearish pattern will collapse. This puts it in a ripe spot for a short as a near-term trade and a long-term trade. The trigger would be a tag of $355.00. Keep a stop at any close above the all-time high of $389.61 and a downside target price of $240.00. Gareth Soloway InTheMoneyStocks

Crude oil continues to climb higher as global economic optimism increases and instability in the Middle East continues. Anti-government protests in Iran have helped push oil above $60 per barrel. Considering economic optimism is likely at/near a high and U.S. production is increasing with the price of oil, the pivot high from 2015 at $62.00 is likely a good short opportunity. I expect a pull back off $62.00 back to the $55.00 level of support. Gareth Soloway InTheMoneyStocks

It's earnings season! This is when corporations will report their quarterly results and usually issue future guidance for the company. This is also a period when stocks will often have big price swings after the earning announcement. For many traders and investors it can be an exciting time to trade, but danger lurks when market participants hold stocks into an earnings announcement. Just yesterday, I closed out a long trade in Dean Foods Co (NYSE:DF) at $14.99 a share. The reason I exited the position was because the company was scheduled to report earnings this morning before the opening bell. Unfortunately for me I lost 0.11 cents on the Dean Foods trade as my entry was $15.10. I know, nobody likes to take losses on trades, but sometimes that is the best move to make ahead of an earnings announcement. If you take a look at the reaction today in Dean Foods Co today after earnings it is not pretty. In fact, DF stock is trading lower by $2.80 to $12.17 a share today after reporting earnings. Believe it or not, this is a decline of nearly 19.0 percent on the day. Now my 0.11 cent loss looks like a victory after this terrible reaction to the Dean Foods Co earnings report. Now to be fair, sometimes stocks can rocket higher after earnings reports. Many traders will often celebrate with excitement if they hold a stock and are on the right side of the earnings reaction. Just think how I would feel if Dean Foods Co was trading higher by $3.00 after I sold it yesterday, probably not very good. After trading for so many years I have realized that trading earnings is very much like gambling, the odds are simply not in my favor to make that bet. So I have accepted the fact that holding stocks into earnings is extremely risky and simply not my style of trading. If you do decide to hold a stock into an earnings announcement it is best to hold a low beta stock. A low beta stock is an equity that is less volatile, will historically move in a smaller and tighter range. Earlier this earnings season I held Bank of America (NYSE:BAC) into earnings. The stock traded down about 0.30 cents before ultimately recovering and making new highs. BAC stock is a low beta equity and I was actually in the money on the trade before earnings, so there was not a lot of risk of a major decline. Either way, holding stocks into earnings is extremely risky, every trader and investor should understand the odds are no longer in your favor ahead of a corporate earnings report. Nicholas Santiago InTheMoneyStocks