Hope everyone has a fantastic weekend.
Volatility is not going away one bit. Stay safe.
DEAC swing was amazing! Locked in $18-18.50s as stated in the room given market volatility. Great job for those who played it - worked just like SPCE so far as planned from the last few Sunday scans ideas. Lower better and will look to re position.
Once again I want to re visit a topic we talked about regarding pre exhaustion - patience prevents pre exhaustion and INO.
Nothing wrong with making trades but if they should have broken down you need to take notes. The churn will grind you out and take precious head space trying to be a hero on the top. Key levels were posted in the room Friday.
Focus on volume. Focus on the names that people forget about ie: CODX NVAX when INO was going nuts.
My two suggestions for new traders on Thursday night scan was
1. Ignore INO
2. Ignore ETFs
Both of which likely saved many accounts - I will talk about the macro thoughts here and repetitive behavior I see with traders when the market gets like this. There is so many OTHER opportunities with better edge.
Couple things to talk about today on video:
LESS can be MORE
Tired of seeing post of people who just can't wrap their heads around these moves.
You need to adapt.
No it's not easy.
But you know what is easy?
Realizing demand > supply right now.
Yes it's junk.
Yes it's trash.
It doesn't matter (right now)
Until it changes.
— Nathan Michaud (@InvestorsLive) March 5, 2020
Prior tweets were just some conversions I had today.
I talk with a LOT of traders every day.
Seeing a LOT of the same stuff.
Start thinking MACRO with IDEAS!
Also - this all goes back to my tweet on SECTORS.
If it's in the "sector" and it SHOULD have cracked - TAKE NOTE.
— Nathan Michaud (@InvestorsLive) March 5, 2020
If you're trading this volatility - trade it.
If you're buying for long term - buy for long term.
Many folks turn a trades into an investments.
Many folks turn investments into trades.
Make your plan and stick with it.
The flip flop is where you get in trouble.
— Nathan Michaud (@InvestorsLive) March 6, 2020
Remember we are in a trader's market. Much like I took ERI PENN CCL and HTZ off the lows Friday (as called in room) but when I was up $4, $3, $2, $1 respectively I took half off and sold the rest shortly after because the moves were so big. I'm not looking for investments right now. There is no reason to think long term right now unless that's your plan and you're sticking to it. If you're buying airlines, resorts, casinos etc fine, just make sure it fits your plan. This biggest issue is changing an investment to a trade or a trade to an investment.
Video Scan and Game Plan
Stocks to Watch
BCRX I started the swing under $3.90s Friday as noted - tweeted the reasons why. Feel like it's catching up with the rest. This always used to run with NVAX as well but never really did this move. If this trades 30-50 million and starts to catch or joins market momentum we could be looking at a major trade setting up. I am locking rips, buying dips until breaks trend.
OPK was the big one for me Friday - a few people asked me after what would my risk be and it's just not that sort of trade. Straight up reactive trade and scale hard based off what I see on the tape. I did not feel the size of the gap was sustainable in the short term and thus taking the trade you saw. I started a little early but left plenty of room then got aggressive. Had it based $2.70-2.80s etc I would have needed to size down. My goal on scan Thursday and pre market Friday was to fade the gap and ideally comes into $2.20s and traps for a rally back - I did not get long though after the cover. 100 million volume we may have another nice shove on Monday/Tuesday and some short cover but I am cautious on it - this is a pretty big move for this name. In order to think of it as the next "big move" I'd want to see $2.50-2.70s consolidates for a few day.s
TOCA big miss for me, I fumbled setting an alert $2-2.05-2.10 otherwise I would have seen it and taken the trade. Dips $2.60-2.70s base and possible rip through $3 is ideal. If it's not a clean set up I'll just get on the cheer leading bandwagon higher better for potential short set up.
INO reminds me of the same stuff we talked about on APT last week when I felt like the MAXIMUM liquidity day happened and the rest was going to be the back side of the move. That was the day before the gap when it couldn't find a bid all day. This is not natural action, not sustainable and will unwind it's just a matter if time and it's our job not to get bent up on the front side of it because as you know we'll be exhausted and miss the entire move. My thought is Monday is the day - which like I said with APT perhaps we see some more fireworks and upside but NOT 100% NOT the same liquidity. Liquidity reached max levels Friday for a while - 1 mil share bars to nearly 2 mil share bars on the 1 minute. Most people are bent and looking to just break even that's why each time it fades back it holds - everyone averages up and never breaks even repeat repeat repeat blow accounts and once max liquidity has peaked - unwind. It won't be straight down. It traded over 500 million shares last week. Let that sink in. We haven't seen this recently if ever - even crazier than SPCE. Be cautious. Gap down and red does not mean I avoid. I held small short over as noted -- boxed it into the $13-13.50 flush after hours but ended up taking it back off. I have a relatively small size and HOPEFUL for much higher for a trade like ALT.
VXX behaved well on it Friday as shown on Twitter - got the bulk of the meat Friday into close. I spelled out exactly what I needed to see on SPY to get short. No, TVIX is NOT an inverse of SPY and 99% of the time that matters but in the rare occurrence we are trading 1000 pt days back and forth on the DOW I like to use SPY AAPL FB as a judge of where the market may go and thus whether or not VOLATILITY will slow/decrease or ... if we're in for it. So, once again for new traders avoid ETFs great way to get ran over - there is ZERO ZERO ZERO forgiveness when you're trading a product of something else vs. equity.
Failed Follow Through:
SPEX someone decided to chase it up AHs and blow a bunch of shorts out - very well may have a nice shove $2-2.50 early maybe even higher but be cautious getting too aggressive front side. Plenty of downside when it's done squeezing.
DWT is an ETF - oil based you just saw what can happen as these things get crushing enter backwardation mode etc. If unsure, google it. But, monitoring for the day oil rebounds.
NTNX been working so far scan last 2 days - would keep at it until holds trend 945-10AM + or market big rally.
ASLN I put a longer term chart here to see why it's interesting to me. Watching if $2.25 starts to build - data coming late month early April potentially for Phase 1 - worthy eye in case it gets a pump up into it.
MRO bounce watch - no I am not calling a bounce on oil - I am taking notes studying for when it's time and if/when we get that relief bounce I will have go to names this is one of them. Until then - fade fade fade away.
SM same as MRO - higher better unwinds but bounce day on oil I'll be there.
AOBC 945-10AM trend join - either morning shove holds trend 945-10AM + or we hit $7.50s + then fade off.
HP crazy beat name - looking for a trade like ERI CCL on Friday - nothing to marry but if we get capitulation I'd trade that but make sure I lock into the rebound!
MRNA feels like we may be in the 5th inning here based off the wicks we talk about - you can see them on the daily. I don't think it's a break out buy but I do think that if trends hold off dips and you see a good r/r it may be set up for a major break out to come round two. Assume it fails at $30 until proves otherwise. If it starts to set up camp over $30.50s watch all dips. For me, watching weak open set ups for r/g trades.
DRAD was a beauty on Friday took it from $4.50-5s to $7-8s + and didn't expect that when I first got in there. I saw the trap planted as noted in the room and therefore was patient with it. Looking for Tues/Weds trade if it doesn't fade off. I'm expecting it too but if it holds well I think the fact it was so easy to borrow we could have 2nd leg. Again I would have to be PROVEN that - but shorts really had no gains on Friday.
Big Picture Ideas:
VVNT nice one from ideas since sub $15 it's pretty much my only swing left form last month they had EPS and probably were looking for the cover on that but it only went higher. If it holds $24-25 and doesn't crack could be looking at a crazy cover soon. If so could para $30-50 and has possibility of going full HUNT style into some wild numbers. But, that's a big if and been locking along way. Can't trade much size here.
IOVA nice so far - same as the wicks we talk about always. This was on scan all week not so much a trade for me this week but just want to use it as a learning moment to check those wicks as the reason why I was interested earlier in week. Ideally though dips vs. $38 for $40-45 + para
SABR monitoring for bounce day along with AAL HTZ etc. Lower better - looking for capitulation day or trend join vs. 945-10AM +