Quick Coffee Talk Strategy

Starbucks has quietly been weak on a relative basis again. The stock was notably weak earlier this year before rallying back this summer. On the updated daily chart, though, note the potential for a breakdown.

With this in mind, JO is back on watch for strength, as per the inverse relationship we played at the beginning of 2014 quite well.

More on this later. For now, watch Starbucks as a short below $76.

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I have mentioned STLD and some steel names of late. Looking at the sector across the board can help identify other long setups.

In particular, the weekly chart for NUE shows a potential base breakout after a multi-year period of being dead money since the 2008 crash. Keep an eye on this one going forward for strength with the sector.

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I turn 34 years old today, so I am going to duck out of here early.

I will take this opportunity to thank the many loyal readers out there who have stuck with me and come along over time, even spreading the word about me, going on many years now. Trading, investing, sharing ideas, and offering analysis about the markets has become an increasingly humble experience for me over the years, even as my reader base has grown well beyond my wildest dreams and continues to do so at a rate which seems to defy even my own lofty expectations.

One big reason why it has humbled me is because I know that just as quickly as people decide my analysis is useful, if I then ease up just one bit and start to mail it in, market forces will understandably work the other way and readers will evaporate.

And, make no mistake, we are dealing with market forces here–The silent majority of readers dictates whether my analysis is value-added, not any one troll, egomaniac, or hater on the internet. We are not blogging about cooking, knitting, or even sports, but rather money and markets. Readers are understandably going to be fickle when it comes to their money, and have a keen sense of smell in sniffing out pumpers and hustlers.

I also want to thank the core group of subscribers who have made my Weekly Strategy Session a success after its second full year, which I am also celebrating this month. And, of course, the members of 12631 for making our service truly a unique and special place after all of these years with me and @RaginCajun.

The main thing that you are going to get with me is someone who is present and consistent. The surges of excitement and hardcore pumping will come and go in the financial blogosphere until the end of time.

But my highest purpose from day one was to be the guy who was always there to offer honest, objective, rigorous, actionable, and consistently value-added analysis in an entertaining and palatable form.

Win some, lose some; Always striving to get better.

Thank you again for reading.

Courtesy of The PPT algorithm, here are the most current top five readings from my “12631 RELATIVE STRENGTH” custom-made screen, identifying which stocks are exuding some of the best performances to the market at-large at any given moment.

I look for stocks whose Daily PPT Hybrid Score surges, while the Weekly Hybrid has been negative over the past week. This can often yield stocks which are emerging from consolidations.

Members can click here to view and save the screen.

Sorted for at least 500,000 shares of daily average volume to ensure liquidity.

Please click on image to enlarge.

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Breakout plays are skimpy this morning, though I am testing out a FB long inside 12631. The market remains in bounce mode since finding some footing last week. However, we are not exactly screaming to the upside and running away from everyone. If anything, the action smacks of the low volume, drifting dog days of summer you expect to see in August.

I know I have mentioned it quite a few times, but keep an eye on STLD for a continuation breakout from its high and tight consolidation.

Also note that the weak earnings reaction to Macy’s renders JWN M busted long setups, now off my watchlist.

Finally, remember that even in a multi-year bull market with no real correction in the S&P in years we still have plenty of dangerous traps, such as in the likes of KATE KING SEAS this week. Always consider the downside risk to your trades.

The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday. 

 

It is important to remember that the stock market is the final arbiter. Regardless of our beliefs on political, fiscal, or monetary issues (oftentimes, all three can be combined), the opinion of the market is what matters most for technically-driven swing traders. There are many different ways to consistently profit in the market over time. The key, though, is not commingling styles for the sake of convenience or to try to substitute one style for another in lieu of discipline. A classic case would be making a bad trade, then deciding not to cut your losses and instead turning the bad trade into a long-term investment out of convenience.

Finally, it is crucial to be aware that at least eight out of ten stocks tend to move with the market, and most breakout plays fail in corrective markets. Thus, you simply must be aware of the overall market, regardless of how enticing any individual chart looks. If the market continues to improve, so too will breakout plays, almost by definition. If breakout plays break the hearts of eager hot money traders, that is a sign to exercise caution.

 

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