May 23, 2024 - The RightLine Report 

 
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                      NOTES FROM THE EDITOR
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The Trader's Mind

Below you will find a psychological test by active trader and clinical psychologist Brett Steenbarger. It's a relatively simple way to determine if you are trading and living within your ideal niche. Whether it is in finance, romance, career, or other aspects of your life, this test will give you insight into what degree you are operating at your optimum.

Trade well!

- Thomas Sutton, Editor


Keep a journal of your emotional experiences for a week or two. Write down how you feel at the end of your mornings, afternoons, and evenings. Take specific note of the number of times you were completely absorbed in what you were doing during those times. Of special importance are the occasions when you lost your sense of time passing and sense of self-awareness. Also list the number of occasions when you felt frustrated for any reason.

The result of this psychological test is determined by the ratio of occasions in which you are absorbed to the occasions in which you are frustrated. It turns out that successful, highly creative and productive people have an unusually high ratio of "absorbed" to "frustrated."

This is because successful people operate in ideal circumstances that reflect their interests, talents, and skills. Because they are doing what they love and have the resources to do it well, they become totally immersed in their experience. This is being in the "flow," that altered state of consciousness that feels like we are one with the activity at hand. The state of flow is sometimes described as being "in the zone" or "in the groove."

On the flip side, frustration is the result of doing something that we aren't interested in or something that doesn't match our skills and talents. We become frustrated with boredom if a task is too easy. If the job is too tough, we can be frustrated because we feel inadequate. A sense of frustration will separate the subject and the object. In flow, they are joined. This is the difference between a very satisfying experience and a very unsatisfying one.

You will regularly experience the state of flow when you're living, working and playing in your ideal niche. You will be doing what you do well, and you will love and value what you're doing. That is true for the job you're in, the marriage you're in, and the trades you're in. That psychological test applies to most of life's arenas.

There is a tendency for us to justify today's frustrations with the wishful hope of tomorrow's satisfaction. Often that's just wishful thinking that keeps us from doing what's best.

In his book "The Psychology of Trading" Brett mentions a bar near his home in Kansas where a neon sign promises "Free Beer Tomorrow." Of course the naive customers who show up are always told that the beer isn't free "today" but will be "tomorrow."

Life is a continuous series of situations. Our trading, our jobs, and even our relationships are the result of our choices. In one sense we are our situation. We always experience the satisfaction or frustration of what we choose to do and who we are because of it.

It's important to have a high degree of flow in our lives. Check the quality of your emotional state each day. Compare the amount of flow to the amount of frustration. Commit to doing whatever it takes to find your groove on a regular basis. When it comes to trading it may mean changing your style or methods, maybe learning new trading skills.

Whatever the case, just remember there's no free beer tomorrow, so take action today!

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                           "QUICK LIST"
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Stock     05/23     05/23      Buy      Short   Trailing Stops     Gain 
Symbol    Price      +/-      Entry     Entry   Initial/Tighten   Amount 
------  --------  --------  --------  --------  ---------------  --------

EVER      23.73     -0.44     24.87     22.91        1.96/0.98      2.46
MNSO      22.35      0.22     22.78     21.25        1.53/0.77      1.56
BFH       41.16     -0.49     42.38                  2.92/1.46      3.28
DYN       31.25     -0.28     32.48     29.99        2.49/1.25      2.72
APOG      65.80      0.46     66.97                   4.19/2.1      2.94


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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Equities sw significant declines on Thursday, with the S&P 500 dropping by over 0.7%. Nearly all sectors within the S&P 500 recorded negative movements, except for the technology sector, which saw a modest uptick. This shift occurred as NVIDIA, a major player in artificial intelligence (AI), announced earnings that surpassed analyst expectations, provided optimistic guidance, and disclosed plans for a 10-for-1 stock split, set to take effect on June 7. Initially, NVIDIA's impressive earnings report provided some relief to the markets. However, concerns arose following the release of stronger-than-anticipated Purchasing Managers' Index (PMI) data for both manufacturing and services sectors, suggesting that potential rate cuts by the Federal Reserve might be postponed further.

Bond yields, particularly the 10-year Treasury yield, rose on Thursday, climbing approximately 0.05% and nearing the 4.48% mark. This upward movement in yields exerted downward pressure on sectors sensitive to interest rates, such as utilities, real estate, and financials, as well as on bond market returns overall. Following the publication of the Federal Open Market Committee (FOMC) minutes earlier in the week, coupled with the robust S&P PMI data released on Thursday, market expectations for Fed rate cuts in 2024 were revised from two to one, likely slated for September.

While the FOMC minutes indicated ongoing concerns among officials regarding higher-than-expected inflation readings in the first quarter, recent data has shown more favorable inflation trends and some moderation in both the labor market and consumer behavior. In our assessment, the Fed is likely to wait for two or three consecutive improvements in inflation readings before signaling a rate cut, which could potentially materialize by the end of the year.


                       May 22, 2024           May 23, 2024   
                  --------------------   --------------------
Dow                 39,671.04  -201.95     39,065.26  -605.78
Nasdaq              16,801.54   -31.08     16,736.03   -65.51
S&P 500              5,307.01   -14.40      5,267.84   -39.17

NYSE Volume                      3.86B                  3.87B
NYSE Advancers                     799                    446
NYSE Decliners                   2,005                  2,385

Nasdaq Volume                    7.31B                  7.78B
Nasdaq Advancers                 1,688                    908
Nasdaq Decliners                 2,523                  3,358

                                 New Highs/Lows

                   05/16  05/17  05/20  05/21  05/22  05/23
                 --------------------------------------------
NYSE New Highs       199    187    239    184    116     82
NYSE New Lows         16     25     29     33     47     71
Nasdaq New Highs     186    159    224    141    120    139
Nasdaq New Lows       59     67    101    112    109    163

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                              TRADER'S TIP:  
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TRADER'S TIP: "Sector Timeframes"

When trading with the flow of sector rotation, it's wise to keep a clear view of the strategic timeframe being used for a holding period. On a micro scale, money flows across the trading floor rapidly throughout the day, moving in and out of specific industries as the Street looks for direction. Some days the morning session strongly favors one sector, only to abandon that same industry by midday as more attractive opportunities arise.

It's fast paced, and following that price movement intra-day is for short-term traders with real-time tools and considerable experience. Longer-term investors, on the other hand, are usually better off watching support and resistance areas for the index as a whole (such as watching the $SOX when monitoring semiconductors). A chart of the index reads much like individual stocks, and often sheds light on the group's future direction.

The bottom line is that we can all follow sector rotation and take advantage of the opportunities generated, as long as we keep an appropriate timeframe. 
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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/052324SPX.jpg





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                             MARKET CALENDAR
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--ECONOMIC REPORTS AND EVENTS (all times are Eastern): 
MONDAY, May 20					
9:00 am	Fed Vice Chair for Supervision Michael Barr speaks				
9:00 am	Fed Gov Christopher Waller gives welcoming remarks				
10:30 am	Fed Vice Chair Philip Jefferson speaks	
			
TUESDAY, MAY 21					
9:00 am	Fed Gov. Christopher Waller speaks				
11:45 am	Fed Vice Chair for Supervision Michael Barr speaks				
7:00 pm	Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic and Boston Fed President Susan Collins speak together on panel				

WEDNESDAY, MAY 22					
10:00 am	Existing home sales	
2:00 pm	Minutes of Fed's May FOMC meeting				

THURSDAY, MAY 23					
8:30 am	Initial jobless claims	
9:45 am	S&P flash U.S. services PMI	
9:45 am	S&P flash U.S. manufacturing PMI	
10:00 am	New home sales	
3:00 pm	Atlanta Fed President Raphael Bostic speaks				

FRIDAY, MAY 24					
8:30 am	Durable-goods orders	
8:30 am	Durable-goods minus transportation	
9:35 am	Fed Gov Christopher Waller speaks				
10:00 am	Consumer sentiment (final)

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: "Using The Market Map"

While Charting and Technical Analysis gives us a map of the market by revealing the price levels where trading decisions need to be made, it doesn't make those decisions for us. It's our job as traders to begin the journey by entering positions and taking the right exits along the way! 

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                      STOCKS COVERED IN THIS ISSUE    
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COMMUNICATION SERVICES SECTOR

EverQuote, Inc. (EVER: Communication Services/Internet Content & Information) - SQUEEZE PLAY. Thursday's narrow price range has created a potentially profitable setup in EVER, 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 24.87 and a SELL short entry at 22.91. Let EVER's price action determine your long or short entry. Once the order is filled, place a 1.96 trailing stop, and tighten it to 0.98 upon getting a 2.46 gain. EVER closed Thursday at 23.73. Earnings Report Date: Aug 5, 2024. Beta: 0.83. Market-Cap: 824.031M. Optionable.

CONSUMER CYCLICAL SECTOR

MINISO Group Holding Limited (MNSO: Consumer Cyclical/Specialty Retail) - SQUEEZE PLAY. Traders are feeling the pressure as MNSO's intra-day price range on Thursday 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 22.78 and a SELL short entry at 21.25. MNSO's price movement will decide which entry is filled. As soon as you're in the trade, enter a 1.53 trailing stop. Tighten it to 0.77 after you get a 1.56 gain. MNSO closed Thursday at 22.35. Earnings Report Date: Aug 20, 2024. Beta: 0.23. Market-Cap: 7.243B. Optionable.

FINANCIAL SERVICES SECTOR

Bread Financial Holdings, Inc. (BFH: Financial Services/Credit Services) - BULLISH BOUNCE. Looking a bit frayed after sliding downhill in recent sessions, on Thursday BFH seemed intent on initiating a rebound. With moving average support nearby, BFH is at a logical place for Bulls to regroup and extend the familiar uptrend that shareholders have become accustomed to. On continued buying, plan on taking long entries with a BUY at 42.38. Manage risk with a 2.92 stop. Tighten your stop to 1.46 when you have a 3.28 profit. BFH ended the day at 41.16. Earnings Report Date: Jul 25, 2024. Beta: 1.95. Market-Cap: 2.041B. Optionable.

HEALTHCARE SECTOR

Dyne Therapeutics, Inc. (DYN: Healthcare/Biotechnology) - SQUEEZE PLAY. A look at DYN's daily chart shows what a price squeeze is all about. The constricted high-low daily trading range has produced a setup similar to a tightly coiled spring. Expect price to move sharply soon, with the direction yet to be determined. Let the upcoming market action resolve whether you will buy shares or sell short. To capture a move either way, place a BUY trigger at 32.48 and a SELL short trigger at 29.99. Once DYN shows which way it's headed, place your triggered entry order. As soon as your order is filled, follow with a trailing stop of 2.49 and tighten to 1.25 on a 2.72 gain. DYN closed Thursday at 31.25. Earnings Report Date: Aug 1, 2024. Beta: 1.00. Market-Cap: 2.731B. Optionable.

INDUSTRIALS SECTOR

Apogee Enterprises, Inc. (APOG: Industrials/Building Products & Equipment) - BULLISH BOUNCE. Here is another example of a stock in an established uptrend that has recently experienced a counter-trend drop. The sliding price action has now found support near a moving average zone, bouncing upward during Thursday's session to close at 65.80. Anticipate the rebound to continue, and be ready to buy APOG at 66.97. Follow your entry with a trailing stop of 4.19 which can be tightened to 2.1 on a 2.94 profit. Earnings Report Date: Jun 21, 2024. Beta: 1.06. Market-Cap: 1.456B. 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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