TIME TO RUN A TRAIN?

Canadian Pacific Railway Ltd. (CP.T) on Tuesday said it proposed a merger with Norfolk Southern Corp. (NSC) to create a transcontinental railroad company with potential for stronger earnings growth. The Canadian railroad did not detail what its bidding price is other than to say that its proposal “includes a sizable premium.” Bloomberg reported Canadian Pacific’s interest in its American competitor last week (http://www.bloomberg.com/news/articles/2015-11-09/canadian-pacific-said-to-explore-takeover-of-norfolk-southern). Shares of Norfolk Southern surged more than 6% while Canadian Pacific shares slid 0.5% in Tuesday’s after-hours trading.

A little consolidation in the space might get some of the competitors off the mat?

Keep an eye $CSX, $CNI $KSU and $GWR. Decent patterns setting up there on the weekly and monthly charts.

 

A FASCINATING WEEK THUS FAR

I made the comment at the low of the session yesterday that we were being mislead about the market. The gawking, anxiety, and overall tone of comments pouring in were helpful in making that call.

How has the market postured its participants this week?

The end of last week flipped many back into the bear camp. Those that were waiting for a pullback? Seemed like fewer took the opportunity to buy.

I have to say that the slow sell yesterday morning was intended to assist you in giving up positions, or confirming a bearish bias towards the market. As the market rallied, many watched in disbelief.

What about today’s price action? Many felt that they didn’t do enough with the market yesterday, because they didn’t believe the strength at first, and some didn’t want to chase it. Is it possible that the early grind up was to get folks buying early, just to stop them out on the way back down and get folks to short down on the day?

I suppose we’ll know by the close. The $TICK showed buy and sell extremes on the session, but what is the pain trade here? An early rally that fades like this removes early buyers and sucks in new shorts on the way down, right?

Gap up tomorrow?

COULD BE WORSE, YOU COULD BE LOSING

Man, tough news about Charlie Sheen today. Tough call to keep that information to yourself when your lifestyle puts so many others at risk. Here come the lawsuits, buddy.

I’ve run through a few scans, and my lists haven’t changed much. In other words, I didn’t see anything all that more compelling than what I am watching. Here’s a rundown:

$ZG, $DATA, $YRCW, $KBH, $EWZ, $YINN, $UAL, $BCEI, $MBLY $IMMR, $CLDX

Seems so quiet out there today. Starting to wonder if yesterday’s dip and drive action caught people offsides a bit. It was pretty noisy around here early on yesterday, but has gotten much quieter.

If you’ve rationalized chasing the market up today, let me know. I’ll book that $TNA if that’s the case.

More later,

OA

IN STOCKS, WE GIVE THANKS

I had originally thought that the market would chop around last week and most of this week. Thursday and Friday really stuck a fork in the idea of a range. Due to the quick selling, the turkey rally started a few days earlier than I had anticipated. Had we not sold hard into the weekend, we wouldn’t have hit oversold levels as quickly as we did.

From an analysis perspective, $HYG has been green all morning, which confirms the higher low from October. A nice rip in oil could go a long way for the overall market here.

I like $YINN here this morning, and that’s about it. I’m going to refresh some scans to find a few new set-ups. Will share the results in a few.

OA

WELCOME TO THE IBC NYC CONFERENCE ONLINE

I’m so glad you could make it. Thank you for attending our event.

If you’ve signed up, you were sent an email with login instructions to attend live via webinar. If you are not planning on attending live, you will receive another email tonight with instructions on how to obtain the session recording.

I put a significant amount of time into the presentation, and am looking forward to presenting it. It will take all 5 evenings to get though, so be prepared. Each session will complete with ample Q&A at the end.

Tonight’s Session: Understanding Market Dynamics

If you have any questions, please reach out to me in advance: tradingaddicts@gmail.com

Once the session has started, I won’t be able to assist with logging in until the session is complete.

I will open the webinar at 7pm to allow all to get logged in and test their audio & visual. Best to login a little early tonight.

OA

THE CROWD LOOKS CONFUSED

Can’t be too mad at the days action. The $NYMO print of -80 last week is normally a good tell for a relief rally. Even if that’s all you feel this action is good for, it allows everyone the flexibility to prepare, except for those that insist on doing their selling into the hole.

It seemed there was some action this morning that was unsettling to many, but now the tone has gotten quieter with each thrust upward on the day. Thus far I am feeling much better about overall positioning, have licked my wounds, and have even started to plan a few moves for tomorrow.

I ought to scan for some new set-ups after today’s realignment…but from my list I am watching $KBH, $USG, $EWZ, $YINN, $MU and $ZG.

I am super excited for the online conference tonight. I think you’ll thoroughly enjoy it. If interested, here’s the last chance to sign up. 25% discount to iBC premium members of any service, or any member of either of my services.

Good day.

I AM AN OPTION HOLDER, I HAVE TIME

If you’ve traded options before, these instruments sure can make life hard on you. Most people struggle to get direction right, let alone time.

As an option trader, you have to get them both right. It really accentuates the ‘pucker factor’ in trading quite a bit.

The detour that the market took mid-week last week really muffed up my positioning for the month. It was a reminder that when everything seems to be going to planned, you are a complete dumbfuck for thinking what you are experiencing is normal, or that what you are experiencing will have any reason to continue as planned.

That setback cost me some big gains from the week prior, and now has me playing catch-up to get back to levels I was at first week of the month. We spoke on this briefly last week, as I watched monster moves in several names give back gains, and even have a few that turned red in the process. I struggle with greed quite a bit. Fear I can handle, but the most intriguing part of trading in my brain is letting a gain ride for a bigger gain.

I made a few additions here today in $TNA, $PYPL and $AAPL. I view today’s action as constructive, but likely not ‘finished’ in terms of moving forward from the volatility of the last few days. The most important elements here are limited downside in the instrument that lead you lower ($RUT) improving breadth, and recognized leadership.

Got any set-ups you like? Fill me in.

NOTE: Emails have been sent to conference participants with all instructions needed to attend this evening. If you did not receive, have questions, or need anything at all, please email me : tradingaddicts@gmail.com

SIGN UP HERE

OA

 

FEEL LIKE I AM BEING POSTURED HERE

A market that slowly grinds lower like this can be tough to interpret. Each time a new low is met on the day, there’s a response.

In scenarios like this, I try to gauge selling/lack of buying via the $TICK. We’ve had no selling extremes yet, just one buying extreme about an hour ago.

2015-11-16_9-41-57

Based off this action, I have taken a December weekly $TNA position. Crude is starting to turn up a bit, and breadth is about due for a thrust.

Other than that, $AAPL is my top pick here.

OA

Note: Conference attendees, you will receive an email from me this afternoon, with login instructions and details for the upcoming week. If you’d like to have a seat, sign up here.

OA BUY: $PYPL

I initiated a Dec call position in $PYPL here this morning. The market still has some obvious issues, but $PYPL is easy to manage here, and has the relative strength I am looking for early.

More later,

OA

TIME TO SHOW THE WORLD WHAT YOU’RE MADE OF

Heading into the weekend, we started hitting oversold signals at key technical areas. While the news out Friday night was tragic, it’s the kind of news that can mount a multi-day rally.

Being that the downside was a bit more than originally anticipated to close out the week, it was the type of movement that if you choose to buy, you’d probably want to focus on top shelf names again.

I’m starting the week with names like$GS, $AAPL, $PYPL, $MU, $USG, $KBH, $EWZ, $YINN, $FRO, $HAL, $CLDX and $YRCW on my watchlist…to name a few.

A gap down will have the McClellan at -80 again, which is always a solid signal. This type of action comes at a great time, as we’ll kick off the 2015 iBC Investor Conference Online tomorrow night at 7:30 ET. For those that have signed up, you will get an email from me tomorrow with instructions on how to login. For those that haven’t, sign up here. 25% discount to any iBC subscription services, or members of any of my premium services as well.

See you tomorrow,

OA

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