May 05, 2023 read of the market

My take on the market 05/05/2023 - It's... been a while...

A little over a year ago, I posted a blog article in which I laid out my "feelings" for 4ish different possible directions the market could go.

1. Bear Market Rally - Bearish unless case 2 occurs

2. Breakout and consolidation - very bullish

3. Long term consolidation around 450 +/- 50 - bullish

4. Strong fade to or below 400 - uncertain, bearish/cautious

And... here's where we actually ended up:

A year later I see that the market chose the direction in which I was the LEAST sure of how to deal with. The market had a strong fade then a bounce and a fade all the way down to almost 350. Now we've been consolidating with significant volatility centered around 390 or so. I've had to be careful in this choppy consolidation market because I trade momentum stocks where there's a clear direction. Last Summer, my trend break pattern worked amazingly but when the market shifted, I got chopped up a bit. This is good, though! It's from these different kinds of market conditions that we all get to learn new ways of dancing with the markets. One particular setup never works the same way 100% of the time.

So here's what I've been trading or looking at this week

1. TOP - left alone, but catalyzed some wild moves that need to be mentioned

2. HOUR - shorted Tuesday, May 2, 2023 in the morning

3. MINM - shorted Tuesday, May 2, 2023 afternoon

I did not participate in the massive mover TOP, but I need to mention it because it went absolutely nuts and coincided with some absolute monster volatility and opportunity. Each candle here is 1 hour long and it was trading at around mid $6 on Thursday, April 2 in premarket. It didn't look that interesting unless you're paying close attention to the volume. There was massive volume. Further, there really wasn't any big news. Someone big was trading it. Then it proceeded all the way up to over 250! Not only this but some other China related stocks started to go crazy as well. This has happened before and I suspect it will happen again in the future. Large short positions were likely taken due to the seemingly unwarranted nature of this event... and then the stock just kept going up. This, my dudes... is a short squeeze. It is a sector wide, somewhat manufactured short squeeze. The creator of this short squeeze is not known and in the moment, we have no idea when they will be done causing short sellers pain. This is why we have stop losses as soon as we enter trades. Hopefully you traded it well. I'm happy to have avoided it.

HOUR

I shorted HOUR a bit before my normal trend-break entry. However, I decided that the price action and potential reward looked favorable for a short setup with a well-defined risk at around 4.6. It was up a lot on dubious news... well actually no news. It was trending up but opened with very high volume with not enough price action. So it looked like it was losing steam. I was being cautious here with sizing because so many small market cap stocks are rocketing unexpectedly and this can really ruin a trading account (see MINM below).

MINM

MINM is another stock in a long line of unreasonable runners recently that seem to just take all of the short sellers' lunch money. I'm pretty lucky that I didn't see this earlier in the day. It was something like a 1M float stock that was up midday over 100% followed by a significant fade that would have made most shorts very comfortable. However, look at what happened to the volume at around 1 pm when the price was sort of just hanging around just below 3 bucks. That quiet volume on consolidation price action should make you very uncomfortable if you're short; even though you might be up on the trade almost a dollar per share. When I see that quiet volume, I try to imagine I'm walking into a ghost town that used to be very populated... something might not be right. It's a sign for me to double-check that I have my stop in the right place or even a sign to just get out.

Overall, this market action is amazing. I think the big players are probably trying to squeeze what's left out of the retail crowd while they can. Recessionary economic winds can often make liquidity on stocks very hard to come by.

Create a watchlist of some of the following

Bank Stocks:  

FRC (bankrupt now)
WAL
PACW
BBD
There are many more... all should get some massive price action in the coming weeks. We're all watching to see if the government prohibits short selling.

That's all for now,
Mr. McStew

March 25, 2022 read of the market

My take on the market 03/25/2022

We're at sort of a pivotal price area for the markets. We just had an impressive relief bounce from almost 400 all the way back up to 450s on the SPY. Overall, this was a pain in the butt for me because I'm definitely still overall bearish on the market... and I was a bit stubborn on focusing on my short setups. I'm still bearish because it doesn't seem like our economic systems have had enough time to digest the bull run we've had for the last 10 years. But no one knows exactly what the market's next step will be. So I've decided to model the possibilities in the picture above. It's very sophisticated modelling software called paint. Either way, if we continue a straight up rally all the way to highs in a short amount of time like I think is quite possible, this verifies my bearish thoughts that this rally is just a manic, bear market frenzy. It happened just before 2008 where a 15% pullback was completely recovered all the way back to highs and then the bear market started in earnest. If we hit a ceiling and start to fade hard next week or the week after, I'll be sort of uncertain, probably bearish but rarely making long-term trades. The most healthy outcome over the next... long period of time would be for the markets to consolidate with big, long swings up then down for maybe years. That would allow for banks, innovators, governments and the general public to adjust expectations and catch up with one another. I would be extremely bullish on that outcome especially if I notice, in parallel, lots of entrepreneurs making strides to improve our societal productivity in big ways. I would open up an account in as many people's names as I could convince of my hypothesis and start buying crap whenever the SPY is at the bottom of that channel.

Coming back down to ground level, there have been many opportunities. Sectors are moving right now and it's amazing. Weed, EVs (mostly off of TSLA options activity I think), crypto, drones, and more. I personally traded with more consistency than I have in a while... but I still feel like I could do a LOT better. When I look at my trades, I don't really think I got as much out of the price action as I could have. So I want to work on taking most of my gains but holding a small portion a little longer to see if I can get used to that.

My worst trade of the week:

My best trade of the week:

Create a watchlist of some of the following

Stocks I traded this week
MULN, GBS, EIGR, LLL, PALI, AMC, RZLT, F, NKLA, NILE, AMD, BILI, TLRY
Stocks I'll be watching this week
Any and every top % gainer each day goes on a watchlist
TSLA
MULN - hoping for a spike so I can short it
NKLA - same as MULN
AMD - The daily chart on AMD is spectacularly bullish. If there is a market rally back towards highs, I would not be surprised to see AMD double in price. I want to swing it, buying dips
ALL POT NAMES - Note: The most important day for trading the pot names will be Monday and Tuesday before the vote to pull cannabis from the controlled substances list.

That's all for now,
Mr. McStew

March 18, 2022 read of the market

My take on the market 03/18/2022

Hi all!

WOOF! The market has been in an overall downtrend for 3 months almost. This week, we had some major bounces. The opportunities were there if you were paying attention... Me, personally, I was way too hyperfocused on MULN. I traded it nearly every day... each day I think I was short... I have been so bearish that I have just had my head in the sand. Time to step back and look at the big picture. Setups like MULN used to be my bread and butter long trades, it had nearly identical price action 3 days in a row and I just had blinders on. Ended up flat on the week. It happens, next play.Zooming out, there are a lot of retail day traders out there still, and I think a number of them have tried shorting... kind of like me. On average, retail traders lose money... and retail traders shorting a bear market are liable to get squeezed pretty hard. This is mere speculation on my part. Suffice it to say, I think that stubborn shorts could create false mania and I sort of have my eye on that possibility. I like the idea simply because I raised myself on hunting short squeezes. It's honestly more likely, I think, that we get a lot of ups and downs... maybe big, long swings up then big, long swings down that end up shaking lots of people out of the market until it really picks a direction. The past 10 years or so of bull market is unsustainable and so this pullback, though painful, is hopefully good long term. THis is what the SPY has looked like for the past 10 years

Woah! That's a lot of up! Now here's what it looked like 10 years prior to that.

I can imagine that fortunes were made and lost during this cycle... and the investors were probably a little more reserved. I just wanted to show this as a demonstration that this could very well be what is in store for us next. The market crash in 2008 was a 57% drop in value from highs... There were points during that time period that people started to feel like maybe we'd never recover from this. We're not even close to that stage right now. I believe we very well could spike all the way back to highs before the end of the year. Look at the COVID blip on the first image. But we could also pull back down from the 450s level we are at now all the way to the 250s area. As a person, I mourn the fortunes many will lose from this. As a trader, I'm excited by the possible opportunities.

My worst trade of the week:

My best trade of the week:

Here are the stocks that are on my radar this week:
MULN - long and short... CEO just sold some of his shares so cautiously short biased... but stubborn shorts could send this monster to 15 (there's also a $15 price target from an analyst... which I consider just noise)
OXY - Oil and gas play, a lot of people I respect believe that the supply of fuel will soon overwhelm the increased demand by war and oil prices will tank once again... so the oil and gas stocks are on radar
TSLA - MULN is an EV company... TSLA daily chart is setting up for another potentially massive breakout.
TWTR- DKNG- These two I like as stocks that are not very expensive to short and often move either with a catalyst or with the overall market... I just seem to be able to read them well.
Some top gainers this week
DIDI, BEST, ZH, LIZI, TIGR, HOUR,
DAVE, I'm looking at this one very carefully... look at the daily chart. Could be a monster trade and pay attention to the volume candles on the bottom.

That's all for now,
Mr. McStew

March 11, 2022 read of the market

My take on the market 03/11/2022

Hi all!

Trade what you know. I have been stalking $ASTS for 3 days. I'd already traded it a bunch for tiny green but this ended up helping me in the end for today's trade. I knew there were a lot of longs who had been underwater from the 11 dollar range and in premarket today, it spiked towards 11 but did not get there. There were no more buyers left in that area of price and all the buyers got exhausted from all the selling. So I shorted with size knowing what my risk was and what area of the chart I wanted to close my position. All this to say, you'll be so much more successful if you stalk your prey. Study your setups, make watch lists, draw lines on charts and give yourself the best chance possible for success... because this game is painful and hard.
Ok, overall market: Went more red than I expected today. I am hoping for a strong pullback on the SPY and the other indices followed by a monster rally. If markets can shake out the "weak hands" by pulling back to almost 400 on the SPY... then my goodness would I be buying things like AAPL, TSLA, F and other large, real companies for the rally. It could be more chop, though... so I'm cautious for now. If it's choppy or if the markets put in a slow grind upwards, I'll be looking to any hot sectors, the top gainers list, and potential targets to short.

MULN - interesting long or short, a lot of people bagged on this, so my long thesis isn't as strong as my short thesis... but the chart has a very interesting and obvious change in trajectory
ASTS - Possible liquidity trap incoming. I think it's just as likely to break below 9 and then just fade for days. I'll be watching for either of those scenarios.
AMC - Just a great trader lately... unfortunately, I did not take advantage like I wish I did. I was focussed on commodities and on ASTS
Uranium - UUUU, LEU, many more. In play, but cautious
other Commodities - Oil, natural gas, coal, gold, copper and wheat. These are in play, but watch your risk

That's all for now,
Mr. McStew

March 04, 2022 read of the market

My take on the market 03/04/2022

Hi all!

Emotions, commodities, and war.

I will be honest, I've been having trouble getting a handle on this market. I knew that the volatility would be high, but nothing seems fully intuitive. War starts, we have a small pullback in the indices (QQQ, SPY, etc) but then we have a very significant rally. War continues and we have some pullback... in fact, the overall trend seems sort of downward but still up and down almost randomly. It's very difficult to have any conviction on a particular thesis. I've also been struggling with reigning in my emotions. You see, I've seen success with some very simple setups in our trading competition... but now I'm trying it out using real money... and losing nastily. It is so different from papertrading. Hopefully, some of you will have better luck with your relationship to money than I. If you can focus on the process and not be stressed out and making bad decisions... you'll be better off. It's important to trade the setups you're comfortable with... at the size (number of shares) you're comfortable with and therefore risking the amount of money that you're comfortable with. I'm still getting used to these variables with a much larger account than I've had before.

Now, as it pertains to you... WE ARE LIVING THROUGH HISTORIC EVENTS! I did not live through a conflict quite like this one. Our conflict catalyzed by 9/11 was one based primarily on ideological differences. This one in Ukraine is a struggle for power. It is strange to view almost as an outsider while nearly every world power presents their case regarding how Russia and Ukraine should relate to one another. The market is reacting. This world-altering set of events is occurring after one of the most impressive bull runs our recorded markets have ever seen. I think this could go down further than people think. I also believe, however, that it is more likely that we will be in this period of ups and downs for a long time. We will have a very volatile consolidation period for years. Companies will struggle to grow consistently. Those companies that DO grow... will attract more investors than they probably know what to do with and will put many at great risk of tumultuous drawdowns.

War, cost of goods, supply chain problems are all factors which seem to be contributing to inflation. Given that, many, including myself are buying up real stuff called commodities. These are things like oil, natural gas, metals, wheat and more. Those are things which pretty much retain their value even if your money does NOT retain its value. So that's what I'm looking at for trading and investing over the next few weeks. I've entered positions in AEM, PDS, HP, GOLD, VAL, ARNC, HPK, BORR for swings through this time of inflation. Each is a small position but in total they are a significant portion of my overall portfolio. My goal is to move out of the USD a little bit and see if I can protect myself from inflation some. I am prepared for those stocks to be volatile, still.

Day trading, I've been having good luck with F (short and long) AMC (mostly short), JNUG (long), OXY (long), INDO (long), MULN (long and short) as well as KAVL (long and short). These are some of the MANY stocks that have a lot of price action. My goal with these is to look for key areas that people have bought or sold in the past and then look for shapes in the chart that are familiar to me.

The competition: It looks like we've had some trouble turning or keeping a profit. Know that this is normal for new (as well as more experienced) investors. This particular climate is dangerous for investors who only buy stocks and don't have the skillset to short. Our overall average profit/loss for this competition is -7.5 thousand dollars per player. You as a club have lost approximately $111.6 thousand. This is a 7.5% overall loss. NOW, I've said this before but it bears repeating that 90% of traders lose. So since we have about 2 players who have a profit in the market, we're just about status quo. We could potentially include students with less than a grand loss as not having lost but if we're honest... how much of that is from luck, how much of that is from thoughtful, planned-out trades based on a real thesis.

I highly recommend the book I posted about on our google classroom stream. It goes through what that investor went through to be successful... and well it ain't pretty.

Here's my chart from an AMC trade I made today.

That's all for now,
Mr. McStew

October 30, 2021 read of the market

My take on the market 10/30/2021

Hi all and happy Halloween weekend!
I hope you've had a great week and that the weather isn't getting you down.
It is grading season as a high school teacher. So, unfortunately there are fewer dedicated opportunities to stare at the market and do thorough analyses during trading days. That just means I've only been able to look at the many opportunities and haven't had as much time to capitalize on them. During a recent meeting, we had some fun talking about the ABCD pattern. Here's a good webpage and video about it
https://www.investorsunderground.com/the-chart-pattern-that-made-me-over-100000-in-trading-profits/The ABCD pattern is probably the most simple, easy-to-master setup in trading... I believe this is especially the case when day-trading. This pattern is not exclusive to day-trading as it shows up on any timeframe you might be looking at. Basically, a stock spikes to price A, pulls back as buyers take profits down to price B, shows strength by pulling back up to a higher low at price C and eventually has the potential to continue spiking back to price A or an even higher price D. The goal is to enter a long position at price C or around there so that you can use the previous low as your risk level. I like to add a little each time a higher low is made, risking the previous low on the new position. I see this pattern nearly every day. I showed an example of this on the 1 day, 1 year chart of Tesla and here it is below:

Below you'll find all of the stocks that came up in my trading radar. The ones in bold are the ones I took positions on or was most interested in. PLEASE take the time to look at the daily chart of these tickers. If you don't know how to do that, let me know and I can show you. Remember, my personal strategy is day trade or swing trade. These stocks are not stocks that I think are necessarily good investments but instead, they are sources of potential money making opportunities that I want you to start looking at and recognizing.

OCGN - long but hesitant swing trade... known as a pretty bad company so I didn't overstay... unfortunately... it ended up continuing like a buck and a half above my exit...
BKKT
CXDC
MYSZ - traded short for a nice win. This one was a morning spiker that had less attention than some of the other hot runners that day.
PROG
WTRH
MOHO
BGI - A really overbought stock that has not had a really high volume day... so it's likely to just keep grinding higher until more volume comes in to give buyers a reason to sell. My guess is that it will be a really nice short squeeze candidate next week. I made a pretty penny on it long buying dips. I got out though... because I'm a scaredy cat...
GREE
ARQQ
MARK
BROS
METX - Tried this long but I got chopped out. It's a higher float company like CEI that I just don't do well on. Still has potential to keep running.

ALL EV stocks are in play as long as TSLA keeps going
NFT stocks are on watch
AEMD looks promising

That's all for now,
Mr. McStew

October 25, 2021 read of the market

My take on the market 10/25/2021

Hi all,
HOLY COW!!! For a little while, it looked like things were going to quiet down lol... NOT SO MY FRIENDS!!! There have been so many high volume, high volatility setups that it has made my head spin. In fact, I got so FOMO'd on Monday 10/24/2021 that I took a play on $PHUN too late in vengeance for the opportunity cost that I'd just missed. This brought my P/L to 6-month lows and then I just made it all back on another hot play (REDU) that I actually stayed calm for... The stock market is an ABSOLUTELY AMAZING PLACE!!! This is the time to watch and learn. If you participate in this volatility without learning why it is happening or what some of the driving factors are, then you are sizing yourself up for a difficult time.

To be honest, there are so many stocks that are "in play" for tomorrow... that I have no idea what to do about it. One thing I know for certain is "He who chases many rabbits, catches none." I need to either sit on my hands and watch so I don't trade myself into an unnecessary deficit OR pick my top 2 or three stocks to put on my radar. I will set alerts for every single one of these stocks. However, I'm going to be focusing on GNUS, BKKT, PIXY as well as all electric vehicle plays. GNUS, because it is such a joke of a company that there will be a lot of shorts in it but it's been consolidating for about a year with some attempts at breakouts. I still have to check to see if they have any dilution options that make the long-biased thesis less attractive, but that's the biggest reason. BKKT is just so freaking nuts that it could go to 500 and no one knows what it could do. It's the kind of break-your-account setup that I tend to avoid, but if it sets up an ABCD pattern I'll take a low risk high reward play on it. PIXY is another one that shorts love to hate and it has that look about the chart that makes me think it might just be getting started. Again, I could be wrong about all of those, but that's my take on the long side.
Short opportunities BKKT, PROG, MARK, OCGN. Again, I try not to be too biased. BKKT looks like a nice recipe for short torture, but at some point ... what goes up, must come down. It's up 234% in regular hours trading and up 71% in after-hours trading. That's a lot of potential downside. I MUST DECLARE THAT IT CAN ALWAYS GO HIGHER!!! But the downside potential is worth the risk, if you're careful. PROG seems to be setting up an awful lot like CEI did a couple weeks ago. I'm eyeballing it for the short. It probably won't happen tomorrow, but it's on my watchlist. MARK, I think MARK might surprise people with a raging comeback but the fact that it went from 75 cents to $6.7 and back down to almost $3 tells me that there aren't enough buyers to keep this thing afloat. I hope everyone forgets about it and I can snag a nice, calm, all-day fader. OCGN is on watch. This one is scary because I have no idea who's moving this one around. I will watch and be patient for the long or short. I lean short on this one though.

McStew

October 10, 2021 read of the market

My take on the market 10/10/2021

Hi all,
I've been away from crafting these market analyses for almost a month. That hurts my students and it hurts my trading. I like doing it but sometimes life gets in the way of what has essentially been a hobby for me. In any case, I'm here now and it's important not to beat yourself up over this kind of stuff. Just keep trucking along!
I've heard from some of the more experienced traders I know that the market the past two weeks or so has looked a little more like "normal." I had about 2 years worth of "normal" market experience before COVID hit and the market dynamics basically went nuts overnight. This resulted in more huge gainers per day than most people knew what to do with (big losers too). I made some good money in that time which was encouraging because I was just coming off of slowly bleeding my account to 10% of what I'd started with. However, I tried to heed the advice of wiser traders to learn as much as I can so that when the market slowed down, I'd be ready to just wait. I was able to trade A LOT! I cataloged my trades and I learned what some of my best setups are. Because of all the action there was, I was able to trade more frequently, and learn my best setups more quickly. Now, I can more comfortably just watch.
All that being said, there have still been some amazing setups. Sometimes, too, when there are fewer big movers, those movers can move even further than they would if there were more. Here's what I've been trading and watching recently:
Long
AEHR
CEI
GROM

Short
SPRT
CEI

JUPW was a weird one for me. I was trading it based on price action alone... it didn't really have news... it wasn't being traded very heavily but it caught my attention because it came up on my scan for rapid movers. I ended up a little red on the trade, but only like... a dollar. I really shouldn't have traded it because of the factors already mentioned, but the price action was what I was looking for in that moment. In any case, the stock ended up doing exactly what I wanted it to do after I'd already sold out of it... I then ended up shorting it from 1.6 down to 1.49 which is also not that big of a gain. I mention this particular ticker just to show you how sometimes, the trade DOESN'T go according to plan and you have to be ok with being wrong. Here, I felt my "wrongness" when I sold the first time and then again I was wrong when I looked back later and discovered that it went on without me. These ones do not feel good, but you need to just get over it and stick to the plan.

In class I talked a lot about CEI. This stock did amazing things for traders and has more potential to move. Here's the daily chart

Money to be made going up, and down. Now I must admit, I didn't think this could go as high as it did. CEI is an "energy" company with more than 100 million float (aka shares available for public trading). I normally do not touch stocks above about 30-40 million float because they tend to be slower movers which means less opportunity for big gains. However, this one was being pumped by users on Twitter and so it went a little nuts. I got in around the middle of September and made a little profit and then didn't touch it long after that just because I couldn't believe this whale of a stock would move enough to make it worth the risk. So I waited somewhat patiently to short it. I did short it on September 30th and 31st and then left a lot of money on the table for that MASSIVE drop on October 5th.

Now I just want to mention briefly, the stock SPRT. The main thing I want to notice about this one is the eerie similarity between the chart of CEI and SPRT on the daily.

There is absolutely no relation between the two companies fundamentally. They were just both being pumped. This is human psychology at work. It is wonderful to know and put into practice.

Well that's about all I have time for today. Have a great weeknd!

McStew

September 18, 2021 read of the market

My take on the market 09/18/2021

The market was slow for a couple of days... but that didn't last long. If there is a drawdown, it may express itself in fits and starts. Honestly, part of the market mania has to do with COVID regulations freeing up time and money for many retail traders (non-hedge fund or company money). So we're likely to see steady, uptrending stock prices until some other factor (such as an election or regulation) puts pressure on the markets overall. See the image of the NASDAQ index to see how explosively we recovered the initial COVID losses.

In any case, there were A LOT of plays this week. I nailed a few, and missed out on most (still transitioning into the school routine as a Chemistry teacher coming out of summer). Here's the ticker symbols that were on my radar

CRVS - shorted for multiple small losses. The daily chart just looked terrible. It will probably fade back down to 2 bucks next week, but it was holding up too well and I think shorts were just adding while it crawled higher all day... then it went a bit parabolic in the last half hour and it exploded after hours. Check it out!

HLBZ

BROS - Perfect ABCD pattern. I don't usually trade recent IPO stocks, but this one was a layup

BBIG didn't pan out lol. If it based at 10, I might have pressed the "buy" button. I honestly should have considered shorting Monday but I was distracted with work. Could be an interesting long if it stays above 7.50 and/or they put out a press release of any kind.

IRNT - This was an amazing short... that I missed out on. Oh well. Honestly... this could possibly push back up into the mid 30s again in premarket. There have been some really big extended hours moves. I'll keep my eye on it.

LIFE - Interesting stock... If it holds above 9.50, I'm going to take it long with 50cents of risk. I might miss the move again because of work stuff, but still some gud opportunity here.
Ok, that's my take on the market. There's a lot there, so digest as much as you can!

That's all for now! Have a nice weekend!

McStew

September 9, 2021 read of the market

My take on the market 09/09/2021

It's been a long time since I've been able to sit down and do some good reflection on market conditions. I'm looking forward to the rhythm that fall (and teaching my regular day job) brings. This should kick me back into gear for my weekly posts about the market, hot stocks and what I've been trading and/or watching.

Slow days

If you're new to the market and you've only been watching it within the past 2 years... you probably have unrealistic expectations of the kind of movement stocks "normally" make. The pandemic shut down coupled with free commissions made "everyone" a day trader. This brought in more volume and therefore just... MORE. There were more moves to the upside and more opportunities to the downside as well. Eventually, the monster mania will have to take a break. When that happens, we could see some real long-term drawdowns. I'm looking forward to all of the opportunities that brings about.

Right now (as in this week), the market is a bit slower. The number of massive gainers that really hold their gains is lower than it has been in a while. We had a dumb stock like GEVO this week as the top gainer for Thursday 09/09/2021 and it held a mere 40% gain with very little signs of continuation. When GEVO is the top gainer... you know things are slowing down.

Friday 09/10/2021 I'm looking for BBIG to do something... BBIG. If you look at the daily chart, this thing has had some major volatility (ups and downs). However, it seems like it might be closing in on potentially breaking out of a recent high in the 12-12.50 area. Now that's a wide range so there's a lot of chance to get "chopped" out of your trade but that's why I teach risk management. I'll see how it goes and we'll talk next week to see what happens!

Hot stocks of the week - Remember, when I say "HOT" I don't mean these are necessarily a buy. I mean you should look at the charts to see if there are patterns that stick out.

LEDS
BBIG
ALF
TSLA
SPRT
AEHR
VLON
ROOT
RKLB
GEVO
AMC

That's all for now! have a nice weekend.

June 4, 2021 read of the market

My take on the market 06/04/2021

06/04/2021I don't want to let another week go without my email "newsletter." I've been feeling a little drained at the end of day on Fridays when I normally do these and so it's fallen lower on my priority list. Some cool news from my personal life, we've adopted our foster children! This officially expands the Stewart household from 4 to 6 humans... woah! It's exciting and wonderful. We are very happy about it. Feel free to ask me if you have questions about foster care and adoption. Such a cool way to engage the "love others" part of being human.
Now back to business!

The past 3 weeks started with a bit of a lull in market mania. It got back to what are actually sort of "normal" market conditions. I thought we might fall into a bit of a downtrend but that didn't last long! Cryptos took a nosedive on Chinese regulation news and Elon Musk's criticism of it being environmentally unfriendly (though he has a point... I think he just wanted to wield his twitter power so he could buy more bitcoin cheap). The electric vehicle sector (EV sector) has been on fire for the past two weeks... I am only profitable historically because of the EV sector which is sad... but I'm learning to play other sectors too. THE MEME STONKS GOT BUSY! AMC hit nearly 80 bucks. I was in it long from 23 to 30. The moment I sold my position I said... "you just wait... now that I'm out of it it'll go to something stupid like 80." HAHAHA! I ended up being right but it wasn't worth the risk. I was up 7 bucks a share and I said "You never go broke takin' profits!" Another one that more recently went crazay was LEDS. I swear that stock is a beautiful depiction of short torture. When it went on it's first big run a while ago... there was NO news. Yes, semiconductors are a hot sector, but not... this hot. It went from 11 to nearly 30 within 2 trading sessions. Great plays long and short. Honestly, if you were disciplined, the short game on this one was easier.

Hot stocks of the week - Remember, when I say "HOT" I don't mean these are necessarily a buy. I mean you should look at the charts to see if there are patterns that stick out.
LEDS
RHE
PIXY
WKHS - and any EV stock except TSLA... the sector seems to have gone without it this time
AMC
BB
BBW
AMSC
WINT - watching this one in the coming weeks
FTEK
DOCU

That's all for now! have a nice weekend.

May 14, 2021 read of the market

My take on the market 05/14/2021

The morning game pretty much every day was great on the short side and pretty good on the long side. We had nice spike and fade plays like IHT and we had some real faders that were pulling back from recent runs. BTX would have turned out to be a life-changing long term short if I did that kind of thing... I wish I got in on it with the crack below 30. However, I just didn't have the alert set. It was pretty choppy in the afternoons, which is when I typically play the game. I've been talking with a number of newer traders and here's something we discussed related to choppy markets.

The stock market is a sassy beast. It is fickle and setups that work 100% of the time for a week or two can seem to just dry up. We talked this week a little bit about having a plan which then required that I share some of my setups with you. A setup starts with a set of criteria that a stock needs to meet in order to be "on your radar" aka one that you're looking at as a potential stock you might want to buy or short sell. For me, the criteria to register on my radar are the same whether I want to short them or buy them. The reason for this is that I want to look for stocks that have the ability to move in price a LOT, AND I want stocks that many eyes are looking at. This makes the setups work better. Here are the criteria

1. Stock must be a top % gainer on the day (this is calculated based on the price of the stock at yesterday's close)

2. Stock must be up on news (real news ideally for long positions, dumb news for short positions... though dumb news can skyrocket a stock for a long play as well)

3. Stock must be trading high volume (20-30 million shares traded by 10am is a good minimum)

4. Sector momentum (long: hot sector i.e. 2020 EVs 2021 NFTs, short: flat or fading sector -> biotechs are some of my favorites to short)

5. What does the 1 year, 1 day chart tell you? Overall upward momentum? Or overall downward momentum?

If you're curious about the setup I'm trying to learn short, it's looking at the stocks that meet the above criteria (if there are any on the day), finding a stock that is channeling downward by making 1 or two lower highs on the day and entering the trade SHORT at or near the top of the channel and exiting when the stock price exits the channel as well. I call it a fading parallel channel setup. It works safest on stocks that have spiked yesterday or the day before because those tend to be "yesterday's news" and fade more consistently. However, it works but it has bigger potential profits when it has spiked today and then disappointed the investors by not continuing higher. However, it's more dangerous on day 1 of a big spike because it can reverse in a heartbeat when all the other short sellers take profits. See an example of this in the picture below.

Here's my setup overlayed on ISNS for 05/05/2021

Other stocks that were in play include LHDX LMND EYES AMC for short plays. I'm also swinging BLDR, RAIL, TEN, TYHT and ROOT. ROOT scares me because of the downtrending price, but it's heavily shorted and has the potential for explosive upside and had a big buyer today at the end of the day.

That's all for now! have a nice weekend.

April 30, 2021 read of the market

My take on the market 04/30/2021

This week... was incredible. I was red on my long game. Unfortunately this is my REAL account so it hurts a little more. Down about $100 even though I had some really nice trades in the week. I had way more losses and most of those were good losses. I had a run of wins right in a row and I have a habit of sizing up after too many wins... then a good loss can take out all of those. So I think I'm going to try maintaining a certain size on my trades irrespective of conviction just to make it more of a process in which I can track variables like the setup and the sizing doesn't confound the P/L. I also missed out on one of the most amazing trades I've seen out there on the long side. It was a SOFTBALL lobbed up like a nice, easy pitch and I just wasn't looking. I got distracted by the shiny objects of the day and failed to pay attention to the very thing that I'd been preparing for!!!

I'm talking about BTX

The amazing thing about this failure is that I was tuned into BTX all last week AND earlier this week. For whatever reason, I did not pay attention to it. I was just losing money on ISNS and some other random top gainer for the day. Meanwhile, BTX, a stock that seemed like it was OUT OF THIS WORLD over-extended went from having an atrocious red day yesterday to going red to green. The implications of this is that yesterday, shorts piled in for a nice, easy fade down back to who knows where... this stock was 3.50 a month ago. THEN, when this, of all stocks, goes green on the day, every risk respecting short seller's stop gets triggered and then a whole bunch of other shorts start to feel nervous, maybe add add add. This is a recipe for an explosive R/G move. BTX went from 29.41 all the way up to 59.57 within regular market hours.

On the short side (paper) I got in when in cracked below 51 expecting it to hold the downward trend. I got sweaty and then I got lucky at the 3:50pm kill candle. Got out for about a 1:1 risk reward... not great trading. I'm also immensely happy to have gotten out because... in after hours it squeezed to 80 or something. Like I said, this week has been incredible. I'm looking at charts till my eyes bleed and trying to start categorizing what I'm seeing.

That's all for now! have a nice weekend.

April 24th, 2021 read of the market

My take on the market 04/24/2021
For the highly volatile stocks I look for, the market was painful for long-biased traders this week UNTIL FRIDAY! The squeezes on BTX and OCGN were huge (a squeeze is when a stock price rockets up very quickly because shorts are trying to buy out of their positions). BTX went from 9 to 19 in two days... more is that it was as low as 5 bucks on April 9. Shorts were trapped and would buy at any price to get out of their positions. OCGN bounced off of recent lows and had news related to COVID in India. The stock price went from 7 to nearly 14 in 2 days. In fact, many stocks had a bounce on Thursday and Friday. In large part, I think this may have been caused by short-biased traders getting too comfortable with the drawdowns the market was seeing on some of the most over-inflated stocks. Those were my main plays this week. I lost and gained on them both. It turned out to be a little bit of a wash for me but I will learn not to short a top% gainer overnight with a lot of shares. 5 m 2 day chart of BTX below

I'm hesitant to share the strategy I'm trying to use in our game because it's a short strategy and I DO NOT recommend shorting for beginners. However, for those of you who are very curious:How I'm paper trading:
How I find the stocks I want to trade

1. Recently a top % gainer

2. Sector pumped up or up on fluff news recently (NFTs a good example, biotechs tend to be good examples)

3. Goes green then red OR has a red day and is quietly fading showing lost interest

4. Clear risk/reward (I can see the channelling)

5. fading below key levels (from chart highs etc)

Now this week, I've primarily focussed on BTX and OCGN... this was a break of my rule that looks for things that are "quietly fading." These stocks were not quietly fading... but I traded them anyways.

CLOV - this was a weekend short swing Shorted the afternoon pop up to 9.68 and covered Monday morning @~8.95 = 7.5% return

PLBY - This one... is just terrible long term, but shorts are getting tortured in short 32.57 out 33.18 = 2% loss on position - keeping on my radar for next week

BTX - Traded all week

4/20 - short 9.11, out 9.23 = 1.3% loss

4/20 - Short average of 9, out at 9.20 = 2% loss

- overstayed and didn't respect that it could squeeze me out.

4/20 - revenge traded short 9.41, out 9.35 = .006% gain... way oversized dangerous and emotional trade.

4/22 - Short 12.33, covered half at 12.1 =2% gain thinking I wanted to reduce overnight risk but the bullish move looked like it had already happened so I didn't mind waiting for the fade. Further, I'd missed a lot of morning fades earlier in the week so I wanted to cash in on this one......... uh oh

4/23 - Covered the rest of my position... at 15.2 = 23%LOSS... what a SQUEEZE!!! I guess a lot of other short sellers had the same idea I did and just got completely stuck. THE STOCK WENT TO 18!!! Glad I got out. There will be a good short trade next week.

AMBO - Short 2.45 out 2.51 ick - 2.4% loss

OCGN - Traded all week

4/21 - short 6.21 out 6.33 = 2% loss

04/21 - short 6.33 out 6.47 = 2.2% loss

4/21 - Break even trade

4/23 - Short 12.53 out 12.29 = 2% gain exited because chart was in indecision mode.

4/23 - Short 10.56 into the offering... spectacular move all the way down to 9.96 I was heavily sized on this one so big gains 5.6% gains

4/23 - shorted more bounces average of around 10 down to around 9.60 = 4% gains

UAVS - Short 5.52 out 5.32 = 3.6% gain

MARA - short 31.43 out 31.84 = 1.3% loss

CRCT - Short 22.12 out 22.6 = 2.1% loss

NKLA - 11.86, overstayed broke even 11.87

Biggest thing I want you to see from my trading this week is that I lose quite often. However, I try to keep those losses small (nothing I coulda done about my BTX overnight trade the way our game is set up) and I try to let my gains run.

That's all for now! have a nice weekend.

April 16th, 2021 read of the market

One of my better trades was in X. This wasn't because of major profit, but it was because of the calm, cool and collected way in which I analyzed the chart and made good decisions while in the trade that could have saved me money and headache. Here's the daily chart

A bunch of other buyers seemed to see that it was basing from yesterday and decided to buy it up and up and up all the way into the mid 23s! At this point, I had a wonderful day trade on my hands. So I decided to take my profits and go. The other important factor is the daily chart price action. I was sort of planning on another A shaped spike like the previous two that it'd already had. However, I then looked back at that consolidation area in Feb and early March and I decided I was not interested in playing games with noise scalps. So, that was another point in the bin of "take profits." However, I took another long trade when it faded to 23 and I hoped for/anticipated a bounce and it never happened. So I gave a little back but still profitable on the day. The double bottom at 22.50 would have been a spectacular trade.

As an aside... I can't go on without mentioning dogecoin... If you look at the fundamentals of dogecoin... you will notice that there is a lot of gibberish in the whitepaper. It does not seem to take itself seriously and there isn't a lot of clarity on what its strengths are... SO naturally, the most recent generations have gravitated to it. It is a coin that is mined and maintained by people who want to share their love for the Japanese Shiba Inu which reminds me of a corgi... I can't even believe I just wrote that down. It was less than a penny 6 months ago and at some point recently, Elon Musk mentioned Dogecoin as having the potential of being the currency of earth in the future because it's ironic. NOW, while I write this at 10pm on 04/15/2021, Dogecoin cracked over 25cents. That's over a hundredfold increase in 6 months of an asset that started that timeframe with a total value of 330 million US dollars. Now, it looks almost like Dogecoin is slated to catch up to Bitcoin in terms of total value of all coins. All the Bitcoins in the world are worth about a trillion bucks. Now if dogecoin gets to a dollar... which who knows if that's going to happen... then its market value will be about an 8th of Bitcoin's value. But this is a currency... based on love and praise for a particular breed of dog. What kind of world do we live in!?

That's all for now! have a nice weekend.

April 9th, 2021 read of the market

April 9, 2021More reddit (SOS), and dabbling in short selling (only paper!).
OK! So the Reddit crowd is back. The platform Reddit is a sort of forum where many topics are discussed, helpfully or not. One particular crowd there has decided to discuss how to make use of its large readership to attack the stock market for profit and glory. Gamestop has been their iconic poster child. It is heavily shorted by hedge funds and the Reddit crew is circling around the list found here (https://www.highshortinterest.com/) like hawks... or sometimes stocks not on that list. This week they (I don't really know who...) circulated a statement telling their viewers/readers to buy and hold SOS. Nothing special about SOS as far as I can tell except when people buy it, the price goes up. THEN the people who are shorting it lose money and when they "UN-short" the price goes up more... it's a brilliant strategy, to be honest. It was very effective. SOS shot up from around 4.25 to 6.50 very quickly. It has since faded, but it was cool to see it work. Now, I'm seeing these, now famous, heavily shorted stocks such as GME, AMC, and more drift downward in price which is honestly a good opportunity for small-scale short sellers. I wonder if the reddit crew is divesting their efforts now. All in all, I care about price action and these stock market "influencers" are creating some of the most wonderful price action in history... it's crowd-sourced price action.

Other stocks that were on my radar this week:

RICE - it was a top gainer on merger/acquisition news (specifically a SPAC... another term I'll have to discuss) it went 2 days in a row and I paper shorted the front side... bad... went long on the breakout... good.
CELC - Top percent gainer on cancer treatment deal with pfizer... super weird chart might actually break out on Monday above 25
EYES - Terrible company was up on no news. I paper shorted it and the picture above is the strategy I was using. Try to see if you can figure out how it works! This was excellent execution for me
BIOL - up on good news, playing with breaking above a dollar.

That's all for now! have a nice weekend.

April 7th, 2021 read of the market

Dogecoin song is awesome (seen April 7th by me for the first time)

April 7, 2021Infrastructure, cryptos, and EVs OH MY! It looks like the NFT sector is taking a much-needed breather. There were massive runners on something that many people just see as a vain joke. Now, Biden has released an infrastructure spending plan that has a number of different sectors buzzing. Any kind of industrial, building, and construction or building materials company seems to be running right now. A company with the ticker symbol RAIL is offering great swing trade ideas that I normally stay away from but this was too good to pass up. A little bit choppy on the chart but the bigger picture idea about increased infrastructure spending is good. Bitcoin looks like it's setting up to crack 60k again. I definitely expected it to get above 60k per coin and then just keep pushing. This pullback may offer an opportunity to buy dips. It's useful to look out for cryptocurrency-related stocks like MARA, RIOT, BTBT (some would argue that Tesla is also a crypto play). Speaking of Tesla, it had a wonderful spike up above the 700s recently and looks like it might keep pushing. Tesla took the lead in 2020 on one of the longest, hottest hot sectors I've ever seen. I hope Tesla just grinds back up to a thousand. 04/12/2021 edit Almost forgot!!! COINBASE IS GOING PUBLIC! So the volatility will offer lots of opportunity. Some say the other crypto stocks may suffer as some investors may liquidate in order to prepare to take positions in coinbase. I have a rule that I don't buy IPOs within 3 days of their IPO and I don't hold overnight on big anticipated news like this.

The above image is a snapshot from an AWESOME song and video (linked above) talking about dogecoin. I've read the whitepaper on dogecoin... My high school students do better work in terms of clarity of thought and substance! Therefore, I agree with Elon Musk when he says

"Arguably the most entertaining outcome, the most ironic outcome, would be that Dogecoin becomes the currency of Earth of the future,"

So I can't say enough how funny it would be if dogecoin became our currency of choice. In all honesty, I believe it's possible... I just don't think it's fundamentally a good choice. That's all I've got right now... but really, you should listen to that song... it's just nice to listen to.