One thing I recommend all traders do is to keep up with economic data. The market’s reaction can mean the difference between a winning trade and getting stopped out.
Now, there’s a flip side to that. Sometimes day traders hone in on the story, the catalyst, or overall market trends and forget about price action.
The Hottest Price Action of the Day Happens After the Market Closes
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Table of Contents
The Big Picture
I’ve recommended Brian Shannon’s book, “Technical Analysis Using Multiple Timeframes” repeatedly over the years.
One phrase from that book that has always stuck with me is:
“Price is the only thing that pays.”
So, when the July Retail Sales number came across Friday (August 14), my first reaction was…
“Whoa… Here we go.”
I was getting ready for some stops. But then I said something to myself that I repeat about 100 times a day…
“We don’t anticipate, we react.”
The S&P 500 Friday was a good example of why. The market actually kind of shrugged the retail sales number off. Yes, the market was down, but not by much.
I think it’s encouraging.
Strong Earnings Outweighs Poor Economic Data
Check out this tweet by @barchart:
It looks like a lot of the charts I recommend on the watchlist. Or charts I bring up during Pre-Market Prep or The Daily Double Down.
Those profit margins have been grinding up and up. There was a big dip during COVID, obviously, but it’s been uptrending.
Now we’re in that parabolic leg, like you see on all these penny stock charts. Heck, right now you see it on a lot of real company charts.
Here’s what I think…
The Disconnect Creates a Target Rich Environment
From a trading perspective, there’s a disconnect between the economy and the market.
When we look at the strong earnings from tech stocks, there are still a lot of trades out there. There’s absolutely a lot of opportunity out there.
My Take
You can hide under the bed, worried about the economic numbers. Or, you can get in the market and maybe offset some of the bad stuff that’s happening in the economy.
How?
By placing trades in some of these big earnings winners and technology stocks. There’s opportunity out there if you’re willing to go get it.
Watchlist
DEFSEC Technologies Inc. (NASDAQ:DFSC) announced “strong growth in defence software business” when it released earnings on Thursday (August 13).
DFSC, 2-day, 5-min candle, setting up for a day-3 surge
DFSC survived nicely into day two and hit the Oracle signal as well as the target. On Friday, it continued to hold all day and move strong into the close.
Look for a potential Day-Three Surge today. Assuming it held after-hours on Friday, I like breaks above major resistance at $3.21.
On My Radar
- Nicely done: Alphabet gets the 100 bagger
- The weak retail sales number was a surprise
- But it lowers the chance of a rate hike at the next FOMC meeting
- Google DeepMind released Gemini 3.7 Flash last week (love it)
- The lovely Mrs. Bohen and I attended Magnum, P.I. Day at Comerica Park yesterday. Higgins would be proud…
© T. Bohen Higgins would be proud