August 13, 2024 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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Sometimes I wish the market had a good mother. You know, the kind of mom who stands with her hands on her hips and says "Calm down!" when everyone is freaking out. I can see her at the NYSE podium with gavel in hand, warning us that if we don't start acting our age instead of our shoe size we'll all have to take a nap!

Then she'd tell us to stand still and look at ourselves. "Are you doing what I taught you about following your trading plan? Or have you forgotten it and started running with the wrong crowd?"

Thanks Mom, we needed that!

Honest answers to these types of questions help us gauge where we are emotionally and mentally. Once we recognize our actions, we can begin to see what lies beneath the surface.

This insight lets us make any adjustments needed to improve our effectiveness in the markets. It's really not very complicated, yet knowing what to do intellectually is much easier than accepting it emotionally.

For example, we all know that we should practice risk management on every trade. This basically means that we first select our position size using the RightLine Risk Calculator, place the trade at the suggested entry level, and then use stops to protect us against a possible loss.

Simple enough intellectually, but the first emotional challenge comes if the trade moves against us and reaches our planned stop. Now we have to make a decision.

Do we accept the loss, which may have occurred very quickly, or do we give in to our emotions, ignore the stop and start hoping that the trade will turn around? As easy as it is to know that the wisest course of action is to follow the trading plan, it can be very difficult to accept when the moment comes.

Don't worry if this happens to you, it's completely normal. The reason for the internal conflict comes from our human reluctance to change and accept new ideas, even when the new idea might be better than the old.

"Losing" is something that we've all been conditioned to avoid, so intentionally taking a loss is a brand new concept for most people. To make it easier to accept, we have to understand how we think and feel. This self-awareness enables us to grow by managing our emotions.

Remember that money can be made in any market if you just stay calm and do the right things ... and that's a direct quote from Mom!

Trade well,

~Thomas Sutton, Editor 

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                           "QUICK LIST"
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Stock     08/13     08/13      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

ASTS      20.96      1.23     21.43                  2.66/1.33      3.12


The "Quick List" provides a brief summary of each stock write-up and should be taken in the context of the related write-up presented in the "Stocks Covered in This Issue" section of this Report.

Be sure to read "How To Use The RightLine Quick List" at https://prorightline.com/index.php/rightline-report-quick-list/. In addition,always use the RightLine Risk Calculator before entering any position. For access to the Risk Calculator, go to https://prorightline.com/index.php/risk-calculator/.

To learn more about controlling risk go to the RightLine Risk Control System at https://prorightline.com/index.php/rightline-risk-control-system/

For a glossary of terms unique to The RightLine Report go to: https://prorightline.com/index.php/glossary/

Questions? Send us an email using our contact form at: https://prorightline.com/index.php/contact-us/ 
 
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                           MARKET SUMMARY
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Equity markets ended higher on Tuesday, buoyed by a softer-than-expected producer price index (PPI) inflation report. The S&P 500 gained more than 1.6%, marking its fourth consecutive daily increase. Most sectors saw gains, with information technology and consumer discretionary leading the way.

In global markets, Asian equities were up overnight, with Japan's Nikkei Index surging nearly 3.5%. After a nearly 20% drop in the first three trading days of August, the Nikkei has rebounded by about 15% from its August 5 low, recovering much of its earlier losses. Bond yields fell in response to the inflation data, with the 10-year Treasury yield dropping to 3.85% and the 2-year yield settling around 3.94%. On the economic front, the NFIB Small Business Optimism Index reached its highest level since February 2022, indicating improved conditions for small businesses, though from a low base.

July's headline inflation indicator PPI increased by 0.1%, falling short of the expected 0.2% gain. Core PPI, excluding food and energy, remained unchanged, contrary to expectations for a 0.2% increase. This continues a trend of lower-than-expected inflation readings, bolstering the case for a Federal Reserve rate cut at the September meeting. Futures markets are now pricing in a roughly 55% chance of a 50 basis-point (0.5%) cut and a total of 100 basis-points (1%) of cuts by year-end.

The consumer price index (CPI) for July, due Wednesday, will further inform market expectations, with consensus forecasting a 3% increase in headline CPI and a 3.2% rise in core CPI year-over-year.

Thursday's retail sales data for July is expected to show a 0.3% month-over-month increase, compared to no change in June. Retail sales excluding volatile categories like autos, gasoline, and building materials are forecasted to rise by 0.1%, down from June's 0.9% gain. Home improvement retailer Home Depot reported stronger-than-expected sales and revenue for Q2 but posted a decline in comparable sales by over 3%, attributed to higher interest rates and economic uncertainty. Walmart and Ross Stores will report their earnings on Thursday, with retail earnings likely to remain a key focus.

Despite a moderation from the above-trend consumer spending rates of late 2023, personal consumption grew by a robust 2.3% in the second quarter. Strong household balance sheets and a healthy, albeit cooling, labor market are expected to support consumer spending and sustain economic expansion in the months ahead.


                       Aug 12, 2024           Aug 13, 2024   
                  --------------------   --------------------
Dow                 39,357.01  -140.53     39,765.64   408.63
Nasdaq              16,780.61    35.31     17,187.61   407.00
S&P 500              5,344.39     0.23      5,434.43    90.04

NYSE Volume                      3.37B                  3.65B
NYSE Advancers                     968                  2,275
NYSE Decliners                   1,830                    554

Nasdaq Volume                     4.9B                  5.48B
Nasdaq Advancers                 1,662                  3,043
Nasdaq Decliners                 2,531                  1,169

                                 New Highs/Lows

                   08/06  08/07  08/08  08/09  08/12  08/13
                 --------------------------------------------
NYSE New Highs        49     99     35     47     50     85
NYSE New Lows         54     58     48     54     73     35
Nasdaq New Highs      44     47     51     57     68     78
Nasdaq New Lows      144    191    195    155    190    143

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                              TRADER'S TIP:  
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TRADER'S TIP: "Big Day, Small Gain?"

It can be easy to think you are the only one not raking in huge profits when your stocks don't move up dramatically on a big market rally day. Rest assured this is not true. Many traders talk when they're winning, yet you won't hear a peep out of the same bunch when they're losing. This can make it seem like everyone else is trading better than you. That's an illusion. Don't worry about performance during any one session. Remind yourself that you're in this for the long haul. Keep any losses reasonable, stay in the game, and you'll make it fine. 
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                         THE TECHNICAL ANALYST
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This section contains important technical data for the three major market averages -- the S&P 500, the Nasdaq Comp Index, and the Dow Industrial Average.

For guidance on how to use this information, go to: https://prorightline.com/index.php/technical-analyst-section-rightline-report/ 
https://www.prorightline.com/rlch/081324SPX.jpg





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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
MONDAY, AUG. 12					
2:00 pm	Monthly U.S. federal budget	

TUESDAY, AUG. 13					
6:00 am	NFIB optimism index	
8:30 am	Producer price index	
8:30 am	Core PPI	
8:30 am	PPI year over year			
8:30 am	Core PPI year over year				

WEDNESDAY, AUG. 14					
8:30 am	Consumer price index	
8:30 am	CPI year over year				
8:30 am	Core CPI	July			
8:30 am	Core CPI year over year				

THURSDAY, AUG. 15					
8:30 am	Initial jobless claims				
8:30 am	Empire State manufacturing survey	
8:30 am	Philadelphia Fed manufacturing survey	
8:30 am	U.S. retail sales	
8:30 am	Retail sales minus autos	
8:30 am	Import price index	
8:30 am	Import price index minus fuel	
9:15 am	Industrial production	
9:15 am	Capacity utilization	
10:00 am	Business inventories	

FRIDAY, AUG. 16					
10:00 am	Consumer sentiment (prelim)	
8:30 am	Housing starts	
8:30 am	Building permits	
10:00 am	Home builder confidence index

For a chart of typical Up or Down market reactions to specific major US economic reports, go to "Economic Indicator Effects" at this link: https://prorightline.com/index.php/economic-indicator-effects/ 
 
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                              TRADER'S TIP: 
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TRADER'S TIP: "Hot Zones"

While up and down price behavior reflects the impact of news and sentiment, heavy hitters like market makers and institutional traders use technical analysis to locate potential breakout and reversal zones. Some of these areas are easy to see, for they line up with previous high and low pivot points. Others are less obvious. Trend lines, Bollinger Bands, Fibonacci overlays, and other technical tools are used to locate the hot spots.

Where two or more of these converge, support or resistance is stronger. Bullish moves beyond these limits occur when sellers give in and join the buyers. Bearish moves occur in the same fashion, only in reverse. As traders we can anticipate these points, and manage positions by preparing for possible breakouts or reversals at these junctions.

It doesn't pay to be stubborn! If a trade tells us it wants to break through support or resistance, we can play it that way. If it decides to reverse, we can follow along. One measure of a trader's strength is the ability to quickly adapt and go with the current price flow. To a large degree, this is what is meant by the saying, "let the market tell you what to do." 

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                      STOCKS COVERED IN THIS ISSUE    
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TECHNOLOGY SECTOR

AST SpaceMobile, Inc. (ASTS: Technology/Communication Equipment) - BULLISH BOUNCE. The charts for ASTS show that despite the downward pressure from sellers recently, the weekly uptrend is still going strong. Buyers showed up again on Tuesday, resulting in the early stages of a rebound that started near moving average support. The resulting Bullish Bounce set-up offers a potential entry point for a long play. Set your trigger to BUY shares at 21.43, and follow your entry with a trailing stop of 2.66. Tighten it to 1.33 when a 3.12 profit is reached. ASTS ended the latest session at 20.96. Earnings Report Date: Aug 14, 2024. Beta: 1.61. Market-Cap: 5.644B. Optionable.


IMPORTANT: Before entering any recommended positions, always use the RightLine "Risk Control System" to determine the level of acceptable risk and the maximum number of shares to buy.
Link: https://prorightline.com/index.php/rightline-risk-control-system/

Use "Gap Adjusted Entries" to reset the Entry Price for stocks that gap beyond recommended entry levels.
Link: https://prorightline.com/index.php/gap-adjusted-entries-increase-profits/ 

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                           STOCK SPLIT SUMMARY
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Below are the stocks that have announced splits and have recently executed or will execute soon. There is generally a return to normal price behavior in the weeks following a split announcement in what we call a "Dormancy Phase." As the stock nears its split execution date it often moves into the "Pre-Split Run" stage where quick and sometimes dramatic gains can occur. 
                             Announce     Eff.       Split
Company Name     (Symbol)      Date       Date       Ratio   Options  
---------------- -------     --------    -------     ------  -------   

NOTE: The number of stock split announcments goes up during Bull markets, 
and goes down during Bear market cycles. There are currently no upcoming 
stock splits that meet RightLine's proprietary criteria for split ratio, 
trading volume and price action.

For a closer look at the different stages of a Stock Split go to: https://prorightline.com/index.php/trading-stock-splits-stages/ 
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Best of luck and have a Great Week!
 
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