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James Taulman

Dow Futures +200 – This Health Manager Trades to Lows of Base

– James F. Taulman, former Editor-in-Chief of the first independently licensed website to offer stock reports and services based on the CAN SLIM® investment system.

7:45 AM – MORNING MARKET UPDATE & WATCH LIST

NOTE: Today’s watch list can be found here.

After another horrid day yesterday with the Dow down -600, U.S. stock futures are pointing higher this morning as the volatility looks to continue.

European indexes were down less than -1% as benchmark indexes in Asia dropped sharply, with the main market in Tokyo closing down -3.7%. Stocks dropped -1% in Hong Kong and -1.6% in Seoul.

Stocks have taken a beating this month. The Dow has dropped -7.1% in October, while the S&P 500 has pulled back -8.9% percent. The Nasdaq, meanwhile, has tumbled -11.7% percent.

The Cboe Volatility Index (VIX), widely regarded as the best gauge of fear in the market, traded above 24 on Wednesday and is up more than 100% percent this month.

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Now You Can Start Receiving James’ –
Technical SetUps WatchList Each Market Morning

Early each market morning James diligently screens through hundreds of high EPS and RS ranked stocks that have solid fundamentals.

He is looking for those select few which are setting up in sound technical bases and which looked poised to breakout that day.

Each stock is listed with specific trading criteria such as a TRIGGER PRICE, TRIGGER VOLUME and MAX BUY PRICE.

Normally $19.95 a month, now just $9 a month through James’ BuyingBreakOuts.com website.

LEARN MORE ABOUT THIS SPECIAL 50% DISCOUNT OFFER HERE

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The following companies will report earnings before the open: Alaska Air (ALK), American Airlines (AAL), Anheuser-Busch InBev (BUD), Bristol-Myers (BMY), Brunswick (BC), Comcast (CMCSA), ConocoPhillips (COP), Dunkin (DNKN), GrubHub (GRUB), Hershey Foods (HSY), Merck (MRK), Nielsen (NLSN), Raytheon (RTN), Royal Caribbean (RCL), Sherwin-Williams (SHW), Southwest Air (LUV), Stanley Black & Decker (SWK), T. Rowe Price (TROW), Twitter (TWTR), Union Pacific (UNP) and World Wrestling (WWE).

Chipotle Mexican Grill (CMG) and Mattel (MAT) will follow after the close.

The European Central Bank is scheduled to announce a policy decision at 7:45 a.m. ET. The bank is expected to keep benchmark rates on hold, but investors will be watching for any change in language from bank president Mario Draghi.

I ran my regular stock screens this morning, yet did not find any new stocks to our watch list.

We did have a near buyable breakout yesterday in DG. Interesting to see any stock show any type of strength in this market.

We still have stocks which we will be watching for the next buyable breakout – see here.

One stock in particular is health manager HMSY which traded to the lows of its base yesterday.

Chart courtesy of stockcharts.com.

Now you can get access all watch lists with updated trading criteria including –TRIGGER PRICE, TRIGGER VOLUME, and MAX BUY PRICE for every stock here.

Missed any of these morning reports? You can find all previous reports here.

Standard rules apply – any gains above the stock’s TRIGGER PRICE while the day’s volume is at least on pace to make the TRIGGER VOLUME would have any of these set ups confirming a BUY signal up to their MAX BUY PRICE by default.

Keep in mind that when a stock breaks out – becomes potentially buyable – there are other factors to consider.

Volume on the breakout. A stock that is breaking out through resistance, with an increase in volume of +50% above the stock’s average volume (50 DAV), is showing more conviction and more demand. This is not saying – all lower volume breakouts will fail. Actually, we’ve seen many continue higher. If you have found that you did buy a stock that showed lower daily volume or volume under 50%, going forward – simply treat it a regular trade.

Earnings BreakOuts. Many stocks from our watch list will break out during earnings season. Earnings breakouts can be more rewarding, however, these trades carry much more risk then traditional (non-news) breakouts. One needs to also consider – the strength/weakness of the fundamental news that was just released along with the forward-looking guidance the company gave, investors response to the conference call, etc. For anyone who is not familiar with – buying earnings breakouts – I suggest that they sit through a few seasons to study, paper trade, and show some profits, before applying actual capital.

As always, if anyone has any questions – please feel free to email me at james@jamestaulman.com as I would be glad to assist you.

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