Notes From The Editor

While a lot of folks are obviously obsessing over the cornavirus scare, I suggest that you take a break from the mainstream thought process and focus on something more productive. Here are a few ideas that will sharpen your trading skills and give you deeper insight into your psychology as a trader ...

#1 - Draft a Summary of Your Trading Strategy.

Include the details of how you . . .

- Choose the stocks to trade

- Determine your entry and exit points

- Select a time frame for each trade

- Calculate the number of shares for each position

- Control risk

- Manage your trades

#2 - Prepare a Trading Fire Drill.

Write down everything that might go wrong when you are trading. Then list the action you will take in response to each unexpected event. Review the Drill until you are sure that you know exactly what to do in each instance.

#3 - List Your Number One Trading Flaw.

Now, develop a plan of action to eliminate it. Once you are reasonably comfortable that you have it under control, move on to the next one. Be patient with yourself; this important process takes time. As you mature you will acquire new skills and widen your range of positive qualities. Make a permanent commitment to improvement.

#4 - Take Complete Responsibility For Everything.

No matter what happens, YOU are responsible - no exceptions. If your Internet connection goes down, or you lose electrical power, or your broker heads to Tijuana with your trading account, you still accept that you play a role in all situations. Blame no one, simply work toward a solution. Most traders are in self-denial about their actions. By taking full responsibility, you will quickly recognize and correct any hidden problems emanating from you.

#5 - Develop a Personal Wrap-Up Routine.

Depending on the time frame you usually trade, your wrap-up routine can be done daily or weekly, perhaps even monthly. At the end of each trading period, take a few moments to analyze your feelings. Did you stick with your plan? Then give yourself credit for doing a good job - even if you didn't make money. The more you become aware of how you feel, the less negative impact your feelings will have on your performance.

#6 - Measure Your Results.

Review your trading performance at least once a month. Become familiar with your exact Win/Loss Ratio and your Profit/Loss Ratio. To calculate the "Win" part of your Win/Loss Ratio simply divide the number of winners by the total number of trades you entered. Do the same with your losers to find the "Loss" side of the ratio. Your Profit/Loss Ratio is the amount of points - or dollars - in Profits compared to the amount of points or dollars in Losses.

For example, if you win $1.50 for every $1.00 lost, your Profit/Loss Ratio is 1.50/1.00. Also tally your trading commissions and other brokerage fees to determine how much it costs you to trade. Once you know your results, you can conclude how well your methods are working, and adjust your trading rules to improve performance if needed.

Trade well!

Thomas Sutton, Editor

Quick List

    
Stock     03/17     03/17      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

HFC       21.45      0.24     22.53     19.47        3.06/1.53      4.00
PSF       20.42      0.51     20.77     19.12        1.65/0.82      1.92
NOAH      22.96      0.43     23.52     22.02        1.50/0.75      2.78

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

Stocks closed higher on Tuesday as traders responded favorably to the news of an upcoming trillion-dollar government aid package. Treasury Secretary Mnuchin stated that the Trump Administration is considering sending the emergency funds to Americans "immediately" to help with some of the financial stress amid the unprecedented measures taken to combat the spread of the coronavirus COVID-19 outbreak. On the equities front, Boeing (BA $125) has requested short-term aid from the White House for the air travel industry. Economic news was upbeat, as retail sales unexpectedly fell and homebuilder sentiment dipped, though industrial production and job openings both came in stronger than expected. Gold, the USD/dollar and treasury yields were higher, while oil prices finished lower.

                        Mar 16, 2020           Mar 17, 2020   
                  --------------------   --------------------
Dow                    20,189   -2,997        21,237   +1,049
Nasdaq               6,904.59  -970.28      7,334.78  +430.19
S&P 500                 2,386  -324.89         2,529  +143.06

NYSE Volume                      7.71B                  8.23B
NYSE Advancers                     120                   1817
NYSE Decliners                    2935                   1202

Nasdaq Volume                    4.55B                  4.85B
Nasdaq Advancers                   267                   2216
Nasdaq Decliners                  3107                   1140

                                 New Highs/Lows

                   03/10  03/11  03/12  03/13  03/16  03/17
                 --------------------------------------------
NYSE New Highs        13      6      2      3      0      8
NYSE New Lows        688   1129   2377    644   2002   1324
Nasdaq New Highs      16      7     10      7     12     12
Nasdaq New Lows      704   1034   2097    833   1937   1106
   

TRADER'S TIP: "Oh Well"

Taking a planned loss is a calculated part of doing business. Don't let it bother you - just shrug it off and go forward. Not taking a loss as planned can cause damage to both your trading account and your morale. Remember that many traders are incredibly successful with less than a 50% winning trade ratio. It's not that you have a loser; it's how you manage the trade that is important. Another good reason to plan your trade and stick with it!

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 - 2529.19 March 17, 2020

52-Week High: 3393.52
52-Week Low: 2367.04
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 3498.28
Resistance 2: 3094.55
Resistance 1: 2902.78
Pivot: 2690.82
Support 1: 2499.05
Support 2: 2287.09
Support 3: 1883.36


NASDAQ Composite - 7334.78 March 17, 2020

52-Week High: 9838.37
52-Week Low: 6828.91
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 10111.11
Resistance 2: 8958.38
Resistance 1: 8416.63
Pivot: 7805.65
Support 1: 7263.90
Support 2: 6652.92
Support 3: 5500.19
        
Dow Industrials - 21237.38 March 17, 2020

52-Week High: 29568.57
52-Week Low: 19882.26
Daily Trend: DOWN
Weekly trend: DOWN
Weekly Pivot Levels
Resistance 3: 30853.41
Resistance 2: 26986.88
Resistance 1: 25086.25
Pivot: 23120.35
Support 1: 21219.72
Support 2: 19253.82
Support 3: 15387.29
 

Market Calendar

ECONOMIC REPORTS AND EVENTS (all times are Eastern):    

Monday, March 16, 2020:
16-Mar  8:30 am   Empire State index

Tuesday, March 17, 2020:
17-Mar  8:30 am   Retail sales
17-Mar  8:30 am   Retail sales ex-autos
17-Mar  9:15 am   Industrial production
17-Mar  9:15 am   Capacity utilization
17-Mar  10 am   Job openings
17-Mar  10 am   NAHB home builders' index
17-Mar  10 am   Business inventories

Wednesday, March 18, 2020:
18-Mar  8:30 am   Housing starts
18-Mar  8:30 am   Building permits
18-Mar   2 pm   Federal funds announcement
18-Mar  2:30 pm   Jerome Powell press conference

Thursday, March 19, 2020:
19-Mar  8:30 am   Weekly jobless claims
19-Mar  8:30 am   Current account
19-Mar  8:30 am   Philly Fed manufacturing index
19-Mar  10 am   Leading economic indicators

Friday, March 20, 2020:
20-Mar  10 am   Existing home sales



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

TRADER'S TIP: "Another Good Trade"

When screening for "another" stock that might yield higher-than-average trading potential, our analysts employ a wide number of tactics. One is to sift through the day's highest percentage gainers and losers, which oftentimes yield similar price moves either in the same direction, or else the opposite, for the following day. Additionally, we'll often find plays from the news ticker, which also tends to create volatility (and therefore profit potential!). And finally, a glance through the active sector list provides a glimpse into where the money on Wall Street may be headed next! Again, these are just starting points, but we've got to start somewhere.

Stocks Covered in This Issue

ENERGY SECTOR

HollyFrontier Corporation (HFC: Energy/Oil & Gas Refining & Marketing) - SQUEEZE PLAY. When a stock's daily price range contracts to an unusually low point, you can safely assume that in most cases a breakout from that range will result in a nice price move. To capture a portion of this potential movement we have set both a long and a short entry into HFC. A move to the upside will trigger our BUY entry at 22.53, while a drop to 19.47 will trigger our SELL short entry. Follow your position with a 3.06 trailing stop. Tighten the stop to 1.53 once you have a 4.00 gain. HFC closed Tuesday at 21.45. Earnings Report Date: Apr 29, 2020. Beta: 1.48. Market-Cap: 3.472B. Optionable.

FINANCIAL SERVICES SECTOR

Cohen & Steers Select Preferred and Income Fund, Inc. (PSF: Financial Services/Asset Management) - SQUEEZE PLAY. Tuesday's trading action forced PSF's daily price range into an abnormally narrow state. This translates into opportunity; for the cyclical nature of price volatility is to shrink extensively, then swell rapidly as shares move in one direction or another. Instead of trying to predict the direction PSF will take when price volatility begins to increase, we'll set both a BUY (long) and a SELL (short) trigger to get us into the right trade. Be ready to BUY shares at 20.77 if PSF moves higher, and place your order to SELL short at 19.12 if price declines to that level. As usual follow your entry with a trailing stop, 1.65 should be sufficient. Reduce your stop to 0.82 on a 1.92 gain. PSF closed Tuesday at 20.42. Earnings Report Date: N/A. Beta: N/A. Market-Cap: 245.238M. Not Optionable.

Noah Holdings Limited (NOAH: Financial Services/Asset Management) - SQUEEZE PLAY. NOAH is caught in a dilemma. The stock's compressed price range on Tuesday has resulted in a condition comparable to a wound up rubber band. We anticipate that this undecided equity will take off soon, but with the direction still in question we'll let upcoming market action tell us whether to buy shares or sell short. NOAH is now at 22.96. We can capture price action either way by placing a BUY trigger at 23.52 and a SELL short trigger at 22.02. Once NOAH reveals its direction, enter your triggered order and disregard the other one. As soon as your position is in place, follow up with a trailing stop of 1.50. When you acquire a 2.78 profit, tighten the stop to 0.75. Earnings Report Date: Mar 23, 2020. Beta: 1.80. Market-Cap: 1.411B. 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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