Hey friend,
We got some manufacturing and services data this morning.
Both of them significantly outperformed expectations and last month’s numbers – a positive sign for the economy.
Let’s see how the markets have been moving.
The Daily Direction
Note: Indexes closed mixed yesterday but have been moving lower this morning. No change in any index directions.
The Daily Nugget
A breakout should improve the trade – not just make it more exciting.
Most traders focus on what happens after a breakout.
How high could the stock run?
How much money could they make?
But a good breakout should also make the downside easier to define.
Before the move, a stock might spend days bouncing around underneath resistance.
Then it finally clears that level.
Now you’ve got something concrete to work with.
If the breakout holds, great.
If the stock immediately falls back through the level and into the old range, you know pretty quickly that the setup isn’t behaving the way it should.
That’s one reason we like clean breakout patterns.
They don’t just give you upside.
They can also give you a much clearer answer to a question every trader needs to know before getting in:
Where am I wrong?
The Traders Agency Team
