Notes From The Editor

"Fear is a reaction. Courage is a decision." - Winston Churchill

To be a successful trader you have to consistently see the market as it is instead of how you might prefer it to be. This allows you to take appropriate actions despite the fear and panic around you. From this standpoint it's easy to see that trading results are directly linked to your ability to view the market correctly.

I'm using the term "market" to depict both the larger market made up of all trading taking place on the major exchanges, AND the individual trades that we have positions in at any time.

When we perceive the market accurately, we can use the information we get from our observations to define and use methods that give us a trading advantage. So how do we see the market "accurately"?

Our perception is actually our interpretation of our observations. Our interpretation is dramatically influenced by our individual beliefs, expectations and values. This means that when our beliefs and thoughts are relatively free from false assumptions and similar thinking errors, our interpretation of the market is more accurate. The more clearly we view the market, the easier it is to define and use profitable methods for trading the market consistently.

Here are a few key beliefs held by most successful traders:

- No matter what happens, the market is always correct and price is where it should be.

- Market price indicates the combined psychological states of all market participants at that time.

- The market will always go wherever it wants to, and usually proceeds in an unexpected manner.

- As traders we are responsible for our own beliefs and actions, including the risks we take.

- Losses are an important part of trading. They provide feedback about a trader's ability to manage risk and engage emotions objectively.

Trade well.

- Thomas Sutton, Editor

Quick List

    
Stock     03/20     03/20      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

RCL       22.41      0.08     24.47     19.93        4.54/2.27     12.34
W         23.52     -1.40     26.57     21.04        5.53/2.77      9.60
MINI      20.55      1.03     21.33     17.95        3.38/1.69      3.72
FLS       20.59      0.28     21.42     19.01        2.41/1.21      3.68

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

US stocks closed higher on Thursday after the Federal Reserve bank and other global central banks announced additional measures to combat the economic impact of the coronavirus/COVID-19 pandemic. In equity news, the Big-Three automakers announced the closing of all factories in the USA until the end of March, impacting up to 150,000 union workers. Economic headlines revealed some insight into a few data points related to the beginning stages of the virus outbreak, as unemployment claims were up and regional manufacturing activity in Philadelphia declined, with the Leading Index for February before the outbreak moved higher in line with forecasts. Oil prices rebounded from historic lows, the USD/dollar continued to advance higher, treasury yields were down a bit, gold was modestly lower.

                        Mar 18, 2020           Mar 19, 2020   
                  --------------------   --------------------
Dow                    19,899   -1,338        20,087  +188.27
Nasdaq               6,989.84  -344.94      7,150.58  +160.73
S&P 500                 2,398  -131.09         2,409   +11.29

NYSE Volume                      8.78B                  7.88B
NYSE Advancers                     185                   2313
NYSE Decliners                    2854                    721

Nasdaq Volume                    4.90B                  4.71B
Nasdaq Advancers                   345                   2559
Nasdaq Decliners                  3031                    796

                                 New Highs/Lows

                   03/12  03/13  03/16  03/17  03/18  03/19
                 --------------------------------------------
NYSE New Highs         2      3      0      8     14      5
NYSE New Lows       2377    644   2002   1324   2235   1051
Nasdaq New Highs      10      7     12     12     16     13
Nasdaq New Lows     2097    833   1937   1106   1698    811
   

TRADER'S TIP: "Is Shorting Risky?"

Though some folks believe that shorting is riskier than going long, it is far more dangerous to be on the wrong side of an established downtrend. And of course you always have the option to stand aside. If you aren't comfortable trading in a declining trend, then by all means head for the sidelines - there will be plenty of buy-side opportunities once the trend reverses.

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 - 2409.39 March 19, 2020

52-Week High: 3393.52
52-Week Low: 2280.52
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 - 7150.58 March 19, 2020

52-Week High: 9838.37
52-Week Low: 6686.36
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 - 20087.19 March 19, 2020

52-Week High: 29568.57
52-Week Low: 18917.46
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: "Accredited Investor"

This is the SEC term for a person or entity meeting any of the criteria listed below. Certain restricted offerings, hedge funds, limited partnerships, and angel investor networks are open only to accredited investors.

1) Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer or general partner of a general partner of that issuer.

2) Any natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his purchase exceeds $1,000,000.

3) Any natural person who had individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

4) Any trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase of the securities is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment.

5) Any organization that was not formed for the purpose of acquiring the securities being sold, with total assets in excess of $5,000,000.

6) Any entity in which all of the equity owners are Accredited Investors.

Stocks Covered in This Issue

CONSUMER CYCLICAL SECTOR

Royal Caribbean Cruises Ltd. (RCL: Consumer Cyclical/Travel Services) - SQUEEZE PLAY. The struggle between buyers and sellers has resulted in RCL's narrowest trading range of the past seven sessions. With neither group able to take complete control on Thursday, the stock's short term destiny is up for grabs. You can capitalize on this unusually tight condition by placing both a BUY order at 24.47 and a SELL order at 19.93. Regardless of which order is triggered, cancel the other one and follow your entry with a 4.54 trailing stop. Tighten the stop to 2.27 once you have a 12.34 gain. RCL closed Thursday at 22.41. Earnings Report Date: Apr 28, 2020. Beta: 1.75. Market-Cap: 4.684B. Optionable.

Wayfair Inc. (W: Consumer Cyclical/Internet Retail) - SQUEEZE PLAY. In certain stocks a tightly constricted price range is a sign that neither bulls nor bears are confident of winning in the near term. This often means that the side that gives up first causes a quick move in the opposite direction. In these fear dominated skirmishes, opposing traders always benefit from the retreat. In the Squeeze Play setup you can actually play both sides of the inevitable surge. W traders reached this state of stand-off on Thursday with the tightest range of the past seven days. You can take advantage of their efforts by placing a low risk BUY trigger at 26.57 and a SELL short trigger at 21.04. After one of the two orders is filled, cancel the un-triggered order and place a trailing stop at 5.53 which can be tightened to 2.77 on a 9.60 gain. W closed Thursday at 23.52. Earnings Report Date: Apr 29, 2020. Beta: 2.15. Market-Cap: 2.214B. Optionable.

INDUSTRIALS SECTOR

Mobile Mini, Inc. (MINI: Industrials/Rental & Leasing Services) - SQUEEZE PLAY. One interesting trait of price volatility is that it cycles back and forth through periods of expansion and contraction. Stocks that have recently seen their daily price range shift from an average or wide range to an extremely contracted state are ideal candidates for expansive price moves. In many cases the next move is relatively fast and covers a sizable amount of territory. To take advantage of these trades we use both a BUY and a SELL entry. This allows us to enter in whichever direction the breakout takes. In MINI's case we will enter a BUY should it reach the 21.33 level, or a SELL short trade if it drops to 17.95. As usual a trailing stop is essential, 3.38 which should be tightened to 1.69 on a 3.72 gain. MINI closed Thursday at 20.55. Earnings Report Date: Apr 19, 2020. Beta: 1.41. Market-Cap: 911.709M. Optionable.

Flowserve Corporation (FLS: Industrials/Specialty Industrial Machinery) - SQUEEZE PLAY. Trader indecision has put FLS 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 21.42 and a SELL short entry at 19.01. Now it's up to FLS to show us which entry will be filled. Once the trade is underway place a 2.41 trailing stop, which can be tightened to 1.21 after you achieve a 3.68 profit. FLS closed on Thursday at 20.59. Earnings Report Date: Apr 29, 2020. Beta: 1.63. Market-Cap: 2.695B. 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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