Notes From The Editor

Turbulent price action can sometimes wear on a trader's nerves. Fortunately, there are several ways that even the most sensitive among us can cope with the reality of a volatile market.

Here are four guidelines we can all benefit from, regardless of the time frames that we choose to trade and invest in.

1) Be sure of your time horizon.

Most people buy stocks without first considering how long they will own them. Are your plans short-term or long-term? It makes a big difference. Although history shows that the market generally goes up in the long run, it doesn't reveal what's just ahead.

2) Don't rely solely on the clock or calendar.

While this may sound odd at first, choosing our time horizon has as much to do with price movement as it does clock or calendar time. A trader who specializes in trading 15-minute bars has an idea of how much the price should move within that "time" frame. The actual amount of time in a "normal" trade of this type can be anywhere from 15- minutes to several hours, or on some occasions even a few days.

However, an experienced trader would never expect this type of trade to go on for weeks or months. He or she is always aware of the normal price movement that can be expected during the average trade time period, and doesn't plan on being in the trade indefinitely.

The same reasoning holds true for any chosen time frame, whether we are trading one-minute bars or monthly charts. Profit is the only part of the trading clock with cash value, so when making trade management decisions always consider your earnings too.

3) Get Control of the Risk Factor.

No matter how well we trade, sometimes we're going to be wrong. Despite all of the hype to the contrary, most successful traders win only about half of their trades. Using intelligent risk management tactics insures that losses won't hurt us.

4) Use Your Emotional Intelligence.

We've got to play the hand we're dealt, even if we don't like it. The stock market is much bigger than any one of us. We have no control over what it does, but we do have complete control over how we respond to it. Getting angry when the market goes down doesn't make it go back up, but the emotional stress from anger has the potential to cloud our judgment.

So don't be a fool ... stay cool and relax by the pool.

Trade well,

- Thomas Sutton, Editor

Quick List

    
Stock     06/16     06/16      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

OSB       20.96      0.78     21.66     19.78        1.88/0.94      1.88
BHB       20.52      0.62     21.52     19.66        1.86/0.93      2.80
MOFG      20.98      0.69     21.71     19.77        1.94/0.97      2.60
BFYT      17.92     -0.61               17.10        2.65/1.32      3.06

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 access to the Risk Calculator, go to http://www.rightline.net and login to the Member's area.

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

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Market Summary

The major US stock averages closed higher on Tuesday following upbeat economic news, including an unexpected upsurge in homebuilder sentiment and a stronger than predicted rebound in retail sales. Stimulus efforts also supported trader optimism, as Fed Bank Chairman Jerome Powell made it clear to the Senate Banking Committee that unprecedented monetary support will continue. The US Reserve Bank has just begun to purchase corporate bonds and the White House is reportedly considering a $1-Trillion infrastructure spending program. In equities, Lennar Corporation (LEN $64) reported positive results for the quarter, but presented mixed guidance, while Delta Air Lines, WW International (WW $30) and McDonald's (MCD $190) announced favorable updates on thier business activity. Gold, the USD/dollar, treasury yields and oil prices all finished the session higher

                        Jun 15, 2020           Jun 16, 2020   
                  --------------------   --------------------
Dow                    25,763  +157.62        26,290  +526.82
Nasdaq                  9,726  +137.21      9,895.87  +169.84
S&P 500                 3,067   +25.28         3,125   +58.15

NYSE Volume                      5.87B                  5.87B
NYSE Advancers                    1937                   2466
NYSE Decliners                    1013                    513

Nasdaq Volume                    4.49B                  4.62B
Nasdaq Advancers                  2430                   2512
Nasdaq Decliners                   896                    824

                                 New Highs/Lows

                   06/09  06/10  06/11  06/12  06/15  06/16
                 --------------------------------------------
NYSE New Highs        36     40      8     12     27     44
NYSE New Lows          3      1      4      2      6      1
Nasdaq New Highs      88    142     25     24     62    127
Nasdaq New Lows        5      5     11      7     11      5
   

TRADER'S TIP: "Making Decisions Builds Confidence"

Each time we enter or exit a trade we make a decision. Every decision we make causes us to grow - IF we give our experiences the value they deserve. However, if we short-change ourselves for not always making "perfect" choices and view our experiences as "mistakes" our confidence will go down instead of up. Just remember that trading conditions are rarely optimum, and we're always making decisions under less than ideal circumstances. Give yourself a break, knowing that only YOU can set the proper value for each experience you have. Be sure you make the right choice. Build your confidence and never value any trade or other experience as worthless.

The Technical Analyst

For help with this chart, be sure to read "Understanding The Importance Of Support And Resistance"
and "Boost Your Profits With Moving Averages".

S&P 500 - 3124.74 June 16, 2020

52-Week High: 3393.52
52-Week Low: 2191.86
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 3583.62
Resistance 2: 3334.96
Resistance 1: 3188.13
Pivot: 3086.30
Support 1: 2939.47
Support 2: 2837.64
Support 3: 2588.98


NASDAQ Composite - 9895.87 June 16, 2020

52-Week High: 10086.89
52-Week Low: 6631.42
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 11042.97
Resistance 2: 10369.70
Resistance 1: 9979.26
Pivot: 9696.44
Support 1: 9305.99
Support 2: 9023.17
Support 3: 8349.90
        
Dow Industrials - 26289.98 June 16, 2020

52-Week High: 29568.57
52-Week Low: 18213.65
Daily Trend: DOWN
Weekly trend: UP
Weekly Pivot Levels
Resistance 3: 31091.65
Resistance 2: 28589.85
Resistance 1: 27097.69
Pivot: 26088.05
Support 1: 24595.89
Support 2: 23586.25
Support 3: 21084.45
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, June 15, 2020:
15-Jun  8:30 am   Empire State index

Tuesday, June 16, 2020:
16-Jun  8:30 am   Retail sales
16-Jun  8:30 am   Retail sales ex-autos
16-Jun  9:15 am   Industrial production
16-Jun  9:15 am   Capacity utilization
16-Jun  10 am   Home builders' index
16-Jun  10 am   Business inventories

Wednesday, June 17, 2020:
17-Jun  8:30 am   Housing starts (annual rate)
17-Jun  8:30 am   Building permits (annual rate)

Thursday, June 18, 2020:
18-Jun  8:30 am   Initial jobless claims (regular state program)
18-Jun  8:30 am   Initial jobless claims (total, NSA)
18-Jun  8:30 am   Philly Fed manufacturing index
18-Jun  10 am   Leading economic indicators

Friday, June 19, 2020:
19-Jun  8:30 am   Current account deficit



For a chart of typical Up or Down market reactions to specific major US economic reports 
go to:  Economic Indicator Effects

TRADER'S TIP: "For Dessert? Profit Pie"

Entering "long" positions just above support, and "short" positions just below resistance delivers a larger slice of the potential profit "pie" when the trade is favorable, and quick, small losses when it isn't.

Stocks Covered in This Issue

BASIC MATERIALS SECTOR

Norbord Inc. (OSB: Basic Materials/Lumber & Wood Production) - SQUEEZE PLAY. Traders are feeling the pressure as OSB's intra-day price range on Tuesday shrunk to the narrowest spread in over a week. The tension between buyers and sellers should provide enough pent-up engergy for a breakout move in the days ahead, so get ready to trade with the new trend. To achieve that, place a BUY entry at 21.66 and a SELL short entry at 19.78. OSB's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.88 trailing stop. Tighten it to 0.94 after you get a 1.88 gain. OSB closed Tuesday at 20.96. Earnings Report Date: N/A. Beta: 2.55. Market-Cap: 1.682B. Not Optionable.

FINANCIAL SERVICES SECTOR

Bar Harbor Bankshares (BHB: Financial Services/Banks-Regional) - SQUEEZE PLAY. BHB is stuck in a Bull/Bear deadlock. Fortunately for traders this impasse should be resolved soon, with one side or the other taking control. We want to be positioned for a potential quick move up or down, so get ready to catch this train with a BUY entry at 21.52 and a SELL short entry at 19.66. Once your trade is filled, enter a 1.86 trailing stop. Tighten it to 0.93 after a 2.80 gain. BHB closed on Tuesday at 20.52. Earnings Report Date: N/A. Beta: 0.97. Market-Cap: 318.752M. Not Optionable.

MidWestOne Financial Group, Inc. (MOFG: Financial Services/Banks-Regional) - SQUEEZE PLAY. Tuesday's narrow price range has created a potentially profitable setup in MOFG, as sellers and buyers find themselves in a near tie for control of price direction. The next short-term trend could go either way, so prepare for a move out of the draw within the next day or so. Set a BUY entry at 21.71 and a SELL short entry at 19.77. Let MOFG's price action determine your long or short entry. Once the order is filled, place a 1.94 trailing stop, and tighten it to 0.97 upon getting a 2.60 gain. MOFG closed Tuesday at 20.98. Earnings Report Date: Jul 23, 2020. Beta: 1.07. Market-Cap: 337.564M. Not Optionable.

HEALTHCARE SECTOR

Benefytt Technologies, Inc. (BFYT: Healthcare/Healthcare Plans) - BEARISH U-TURN. Shares of BFYT have experienced the pain of selling pressure for a while, yet a recent bounce has given shareholders some welcome yet perhaps temporary relief. On Tuesday the upward bounce ran into a brick wall at a Moving Average. BFYT now appears ready to head lower again. A continuation of this bearish reversal would signal a retracement of the recent gains, so prepare for SHORT entries at 17.10, using a 2.65 stop. Tighten to 1.32 on a gain of 3.06. Tuesday's closing tick was 17.92. Earnings Report Date: Aug 03, 2020. Beta: 1.04. Market-Cap: 255.251M. 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.

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  
---------------- -------     --------    -------     ------  -------   

Currently there are no upcoming stock splits on the major US exchanges.
    

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 to all RightLine subscribers. For access, go to http://www.rightline.net and login to the Member's area.

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