Signals of the Day – 4.6.17

Afternoon folks! It felt a bit like Deja Vu today as we saw all three of the indexes pullback considerably heading into the close, much like they did yesterday.  All three managed to hit the brakes before the close and wrapped up the day with small gains. Some of the timidness we have seen over the past few days has been attributed to events such as the possibility of military intervention in Syria after their horrid gas attack and also speculation that President Trump’s tough line with China might endanger any productivity the first meeting between the two leaders might produce. We will likely know the outcomes of those two very different situations before heading into the weekend.

With all that being said, let’s go ahead and dive right into tonight’s signals.

TRV’s momentum is starting to swing back to favor the bulls.

TLB Momentum Swings – iTLB 3.0

Our first signal of the day is brought to us by the TLB Momentum Swings strategy and is on Travelers Companies, Inc. (TRV). This strategy scans a list of stocks for those that have been in a predominant trend for an extended period of time but have also recently undergone large pullbacks. On top of that, they also have to have momentum swinging back to the upside. If those criteria are met, a signal is generated.

As we can see, TRV got a big thumbs up from iTLB. TRV had been moving consistently higher since the election and formed a nice trend starting back in January. It has recently begun a pullback and has formed a new higher low along a confluence level between the 50 SMA, the pivot point on the trend and it is oversold on both the RSI and Bollinger Band indicators. All of those pieces of info give us quite a bit of confirmation for this signal. If iTLB gets this one right, we might see TRV make a run for the $124-$126 zone in the very near future.

A great bullish pivot point may be forming for us on FOXA.

T3-S3 – The T3 Power Suite

So, let’s address the gorilla in the room first before you cock your eyebrow out of suspicion at this signal. Yes, we are aware that Fox News, one of FOXA’s channels, is dealing with a major controversy concerning their main man, Bill O’Reilly, about his past alleged behavior with women. Those allegations along with the fact that FOXA paid millions of dollars to those complainants has landed them in a boiling pot of hot water. But, we have seen large controversies come and go so many times over the years and every time, the companies do just about everything they possibly can to allude any lasting damage. Earlier this year, Roger Ailes was ousted from Fox News over sexual harassment allegations as well, and we can see that those allegations have not hurt the company as a whole. So with that in mind, we are going ahead and saying, yeah, we think this signal is legit.

This signal was fired by the T3-S3 strategy which is found in our advanced strategy suite, the T3 Power Suite.  T3 finds temporary pullbacks in the market, and then places long trades on the expectation of a reaction rally. This idea is very familiar to all of us and is known as the Reversion to Mean or R2M trading method. The R2M method states that markets trend roughly for 80% of the time.  Within these trends, we can find pullbacks that create oversold conditions, providing price improved entry opportunities. Our objective is to find these pullbacks right at the moment they are oversold and then buy them just before they pivot higher. T3 is actually three strategies that are all slightly varied from this concept. If you’re curious and want to get into the nitty gritty details of this suite, check this out.

FOXA has been in a terrific trend since October of last year. It has definitely had some volatility within that time, but for the most part, it has been a fantastic trend. As we can see, FOXA is also undergoing a slight pullback, giving us the oversold conditions we need for a reversion move. If it does execute the bullish pivot, and it looks like it will do so right along the 50 SMA, we may see it return to the $33 zone sooner rather than later.

To wrap up the day, let’s take a look at Dr. Pepper Snapple Group.

Dr. Pepper has been in a beautiful uptrend and looks like it is ready to extend its bullish run.

MS-16

Our last signal for the day comes to us via the MS-16 strategy and is on Forrest Gumps’s favorite soda, Dr. Pepper (DPS). The MS-16 strategy is a mechanical trading strategy that uses two different momentum systems and a filter based on trend direction. MS-16 scans stocks that are outperforming the market but have made significant pullbacks against their trends. And check it out, DPS has done just that! It has been cruising higher for months and has set higher highs and higher lows left and right. It is currently establishing a new higher low and everything about this setup looks good. Once it pivots back to the upside, it may very well make a run at $100 territory.

That’s it for this evening. The signals for tomorrow will be posted over the weekend. So check back Sunday afternoon! Have a wonderful and safe weekend and happy trading!

 Making money is art and working is art and good business is the best art. – Andy Warhol

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