Corona Virus Spreads Pummels Global Stock Market Futures
Hello and welcome back to Smart Money Alerts for Monday February 24, 2020...
At last check the stock market futures were down as much as 850 points. The coronavirus has worsened beyond China.
Well, we wanted a pullback to buy, we got one.
But, today requires acting like a pro. Don't go bottom-fishing. Don't try to catch a falling knife. You don't need to take chances to make a good trade.
In today's episode of Stocks for Breakfast I show you how to wait for a "bullish U-turn" before you enter a new long (buy stock).
Essentially we are looking for stocks to push lower, the reverse, and close above the open and near the highs, on that reversal candlestick.
Why? Because we want a clear spot to manage our risk. It's smart trading. Even if the stock moves lower, at least we have a defined stop loss. As opposed to guessing an exit.
When we see a bullish u-turn you have "proof" that buyers are stepping in. The only question we have after our entry is -- Do we have a well-bid candlestick after our entry candlestick? (higher highs and higher lows.
If so, then we have more "proof" that the trade idea is valid. Our argument for the trade is getting better.
My trade of the day is AMD. You can see the chart here and a clear entry price.
Also in today's video, I teach a way to spot "distribution." This price action occurs when smart money is selling stock as price move higher. I use AAPL to demonstrate what to identify on the charts.
If you have any questions feel free to email me or leave a comment on YouTube under the video. (Be sure to subscribe to our YouTube channel too).
Be disciplined today! Wait for those bullish u-turns.
Pete
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Dow is set to drop 770 points at the open as coronavirus cases outside China surge
U.S. stock futures pointed to sharp declines on Wall Street at the open on Monday as the number of coronavirus cases outside China surged.
On Sunday, Seoul raised its coronavirus alert to the “highest level,” with the latest spike in numbers bringing the total infected to more than 750 — making South Korea the country with the most cases outside mainland China.
Read More cnbc.com/coronavirus
Technology stocks could be on the verge of a bear market, warns investor who once ran the world’s biggest tech fund
‘There is some comeuppance due, and unfortunately I think the coronavirus is that exogenous variable that is a catalyst to take some of these stocks down.’
That “comeuppance” could ultimately deliver a 20% shock to the top-heavy tech sector, Paul Meeks, portfolio manager at Independent Solutions Wealth Management.
“The fundamentals are strong in tech. They are stronger relative to the rest of the sectors within the economy,” he said, add that if the selling were to reach bear market territory, “I’d be buying with both hands.”
Watch the full interview on marketwatch.com
