July 30, 2024 - The RightLine Report
Notes From The Editor
Every successful trader knows the importance of adapting to shifts in the market. One of the best ways to track these changes is to monitor your own trades. This allows you to see emerging trends more quickly, and helps protect you from unexpected twists and turns.
When it comes to monitoring tools, nothing beats a trading journal. In addition to helping you spot market patterns, they also help you track trends in your personal trading and identify which set-ups are most effective in the current trading environment.
A simple spreadsheet is all you need. Each row represents a trade, with the left-most column listing the date the position was entered. Moving right, in each column, you have details such as the ticker, the size of the position, whether you bought or sold short, the price you entered, and the stops that you've used. When the trade is exited, the remaining columns are filled in: date closed, net gain/loss in dollars, and net gain/loss as a percentage. For these final two columns, many traders prefer to color-code: red for losses, green for gains, black for breakeven.
To this basic information, it's a good idea to add some columns that help with monitoring. This might include the stock's sector, the prevailing market trend when you entered the trade, and a column for your general comments and thoughts on the trade.
While this may sound like a lot of information, it's actually quite digestible in spreadsheet format. At a quick glance you'll be able to spot patterns that can be used to increase your profitability. Are your tech sector trades gradually becoming less profitable? Are your short trades yielding larger gains? Is a certain sector consistently outperforming? Use this tool to find out! Your account will thank you.
Here's to profits,
Kent Barton
Senior Analyst
Stocks Covered Today Stock Splits
Quick List
Stock 07/30 07/30 Buy Short Trailing Stops Gain
Symbol Price +/- Entry Entry Initial/Tighten Amount
------ -------- -------- -------- -------- --------------- --------
AEM 75.16 0.64 76.31 4.79/2.4 3.22
TYRA 21.57 1.22 21.86 2.41/1.21 2.56
S 22.55 -0.06 23.37 21.44 1.93/0.97 1.6
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" and always use the RightLine Risk Control Calculator before entering any position.
For more on controlling risk go to the RightLine Risk Control System
For a glossary of terms unique to The RightLine Report go to: Glossary
Questions? Send us an email using our Contact Form.
Stocks Covered Today Stock Splits
Market Summary
Major equity markets closed mixed on Tuesday, with small and mid-cap stocks outperforming large-cap stocks. Energy, financial, and real estate sectors led the gains, continuing a trend of broadening market leadership. Technology stocks fell 2.2% as investors awaited key sector earnings announcements this week, contributing to a decline in the tech-heavy Nasdaq.
Bond yields edged lower, with the 10-year Treasury yield around 4.14%. Globally, Asian markets mostly declined, while European markets rose as investors anticipated central-bank decisions in Japan and the U.K. The USD/dollar remained stable against major currencies. In commodities, WTI oil prices decreased due to concerns over Chinese demand, while gold prices increased.
The Federal Reserve's Open Market Committee (FOMC) meeting for July began Tuesday, with the interest rate decision to be announced on Wednesday, followed by a press conference with Fed Chair Jerome Powell. The market anticipates that the Fed will keep the fed funds rate steady at 5.25% - 5.5%, which aligns with our expectations. However, the central bank may indicate that interest rate cuts could become more likely later this year. U.S. inflation has moderated, with the Fed's preferred core personal consumption expenditures (PCE) inflation easing to 2.6% annualized through June.
Additionally, the labor market is gradually cooling, with approximately 8.2 million job openings at the end of June, slightly lower than expected. The unemployment rate has risen to 4.1%, surpassing the Fed's year-end forecast of 4.0%, while wage gains have slowed to below 4.0%. This combination of easing inflation, a Fed poised for potential rate cuts, and positive but cooling economic growth supports the ongoing expansion of the stock market.
The week will conclude with the release of the nonfarm payrolls report on Friday morning. Estimates project an increase of 175,000 jobs in June, down from 206,000 in May. The unemployment rate is expected to remain at 4.1%, and average hourly earnings are forecast to decrease to 3.7% year-over-year from 3.9% last month. The Fed will closely monitor wage growth data, as lower wage gains typically correlate with reduced services inflation. We believe the cooling labor market supports the "soft landing" narrative for the economy and suggests moderating inflation ahead.
Jul 29, 2024 Jul 30, 2024
-------------------- --------------------
Dow 40,539.93 -49.41 40,743.33 203.40
Nasdaq 17,370.20 12.32 17,147.42 -222.78
S&P 500 5,463.54 4.44 5,436.44 -27.10
NYSE Volume 3.39B 3.79B
NYSE Advancers 1,158 1,728
NYSE Decliners 1,633 1,035
Nasdaq Volume 4.92B 5.59B
Nasdaq Advancers 1,454 1,956
Nasdaq Decliners 2,761 2,269
New Highs/Lows
07/23 07/24 07/25 07/26 07/29 07/30
--------------------------------------------
NYSE New Highs 214 111 178 214 179 218
NYSE New Lows 17 28 29 17 14 25
Nasdaq New Highs 238 167 214 243 162 176
Nasdaq New Lows 89 117 108 69 91 140
Stocks Covered Today Stock Splits
TRADER'S TIP: "When Your Indicators Contradict The Trend"
Due to their overly sensitive nature, some technical indicators will turn in one direction while the price trend remains in the other. A rule of thumb - whenever a price trend and indicators are in conflict, always go with price until the trend is broken.
The Technical Analyst
For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Improve Your Trading With Moving Averages".
Stocks Covered Today Stock Splits
Market Calendar
ECONOMIC REPORTS AND EVENTS (all times are Eastern): MONDAY, JULY 29 None scheduled TUESDAY, JULY 30 9:00 am S&P Case-Shiller home price index 10:00 am Consumer confidence 10:00 am Job openings WEDNESDAY, JULY 31 8:15 am ADP employment 8:30 am Employment cost index 9:45 am Chicago Business Barometer (PMI) 10:00 am Pending home sales 2:00 pm FOMC interest-rate decision 2:30 pm Fed Chair Powell press conference THURSDAY, AUG 1 8:30 am Initial jobless claims 8:30 am U.S. productivity 9:45 am S&P U.S. manufacturing PMI 10:00 am ISM manufacturing 10:00 am Construction spending FRIDAY, AUG. 2 8:30 am U.S. employment report 8:30 am U.S. unemployment rate 8:30 am U.S. hourly wages 8:30 am Hourly wages year over year 10:00 am Factory orders For a chart of typical Up or Down market reactions to specific major US economic reports go to: Economic Indicator Effects
Stocks Covered Today Stock Splits
TRADER'S TIP: "Let The Trade Come To You"
It rarely pays to chase a stock, so don't chase it - let the trade come to you. You have two options when you realize a move is already underway. Either forget the trade and look for another one, or wait for the price to move back to support or resistance THEN enter on the rebound. Waiting for a pullback usually provides a relatively low risk entry - because you can place a tight stop just beyond the support or resistance level. Remember - don't worry if you miss a trade, there is always another.
Stocks Covered in This Issue
BASIC MATERIALS SECTOR
Agnico Eagle Mines Limited (AEM: Basic Materials/Gold) - BULLISH BOUNCE. This trader-friendly setup turns repetitive stock behavior into real profits. Based on the tendency for up-trending stocks to drop briefly and then resume the up-trend, the Bullish Bounce places traders into excellent stocks when conditions are primed for more skyward movement. AEM's current price action near moving average support signals a potential BUY entry at 76.31, followed by a 4.79 trailing stop which can be tightened to 2.4 upon earning 3.22. AEM closed Tuesday at 75.16. Earnings Report Date: Jul 31, 2024. Beta: 1.05. Market-Cap: 37.504B. Optionable.
HEALTHCARE SECTOR
Tyra Biosciences, Inc. (TYRA: Healthcare/Biotechnology) - BULLISH BOUNCE. TYRA has charted an upward weekly trend until recently when sellers showed up to push prices lower. On Tuesday the selling ran into solid support. A potential bounce up from this level should attract buyers and likely return TYRA to the previously established uptrend. The Bullish Bounce set-up is the basis for our BUY entry, so be ready to go long on a rise to our trigger at 21.86. Set a trailing stop of 2.41, tightening to 1.21 on a 2.56 profit. TYRA closed at 21.57 on Tuesday. Earnings Report Date: Aug 8, 2024. Beta: 1.01. Market-Cap: 1.133B. Optionable.
TECHNOLOGY SECTOR
SentinelOne, Inc. (S: Technology/Software - Infrastructure) - SQUEEZE PLAY. Trader indecision has put S squarely in the center of a Bull versus Bear standoff. This tight spot should soon give way to a clear winner in the short-term, and we want to be in position for the move. To do that we've set a BUY entry at 23.37 and a SELL short entry at 21.44. Now it's up to S to show us which entry will be filled. Once the trade is underway place a 1.93 trailing stop, which can be tightened to 0.97 after you achieve a 1.6 profit. S closed on Tuesday at 22.55. Earnings Report Date: Aug 29, 2024. Beta: 0.66. Market-Cap: 7.055B. Optionable.
IMPORTANT: Before entering any positions, always use the Risk Control System to determine the level of acceptable risk and the maximum number of shares to buy. Use Gap Adjusted Entries to reset the Entry Price for stocks that gap beyond recommended entry levels.
Stocks Covered Today Stock Splits
Stock Splits
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 (Effective 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.
Split details are also available online at the RightLine Online Stock Split Calendar. For a detailed look at the different stages of a Stock Split, Click Here.
A simple yet powerful tool, the Risk Control Calculator helps you manage risk by recommending a maximum number of shares to purchase. Available in the RightLine Member's Area.
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