Happy Labor Day all!
I hope everyone enjoyed themselves and spent some time away from the screens!
Labor Day = Labor Day opportunity = Labor Day Sale. I don't do sales pitches so if you want to be part of the community, be part of the community. If you need to still be sold on the value or the WHY (given quality of weekly videos, daily micro-content, and blog post) then it's probably not a good fit for you. If you want to get daily scans like these and join us in the chat room every day, make sure to check out the Labor Day deals before they end.
This week was my best week since the January and February craziness which is hard to compete with considering I did my entire 2020 in the first month in a half this year. With that said, if you constantly come prepared to the market your career day or month can and will be at any time. The key is being prepared. The key is trading with a high degree of edge. The key is understanding what fits your personality the best not someone else's.
This week THE MOST IMPORTANT key was respecting volume, not pre-exhausting on trades, AND not taking things off radar. Weird, what else is new? I feel like I say that every week LOL.
But! Here's the thing. There are weeks we say that but never really get tested.
This week if you jumped in front of stuff you got destroyed. This week if you forgot about names - you missed out in a big way. (ANY SPRT FCUV BBIG TKAT etc.)
The current state of the market: Everyone is a pro because price suggests so - reality: They were down 50% + a week ago.
No one ever questions why things go up "too fast" only if they go down "too fast!" Most of these moves don't happen without shorts. Most of these moves are short squeezes from earlier. Short squeezes end in short cover thus driving up the price but here's where traders make their mistakes: Squeeze happened
BTCM is a great example this week - it was pumped on social media and popped up (no other reason for it to pop), squeeze ends, I fade trend that FAILED (double top), perma longs blame short-sellers. It's the market, stocks fix themselves over time AFTER outlier activity.
Current Market Sentiment (Where people will lose the most moving forward):
- NEXT XYZ STOCK - It's easier to understand "Next XYZ" than understand the reality.
- HEAR WHAT YOU WANT - NOT WHAT YOU NEED - It's easier to surround yourself with YES people because it's what you want to hear.
- IT WENT DOWN BECAUSE XYZ (NEVER KNOW TRUTH) - It's easier to blame someone else for a move vs. understanding the "WHY"
Warned on many trades ahead of time this week and last about how I anticipated them ending. But, because I am a "short" because I am "bent" because I am spreading "FUD" (a term made up once people are stuck on the wrong side of a move to blame others for their lack of risk management) etc.
I try to be timely with my warnings when I believe retail stands to lose the most. In the end, you saw what happened: SPRT BBIG ANY APOP etc.
- New traders - rewards / false sense of understanding
- Reckless rewards over time catch up
- Refusal to understand reality.
- Hot swing market
Watch all your videos and listen carefully,can't seem to figure out how you see the big swings coming on the daily. Wicks ect also you seem to say alot,a steady buyer in the tape before these moves, guessing the soaking? Or the big 1st day, drop for 1-2 days then squeeze.
— cervello (@CervelloTrades) September 4, 2021
Any advice for the mindset difference between adding on confirmation vs adding on S/R levels? I have trouble adding to winners on confirmation because I always feel like I'm chasing, leading to me missing the bigger move a lot of the time. Thanks!
— CookCL (@cl_cook) September 4, 2021
What signs do you look for to determine whether a new theme is genuine and whether there could be multi-day continuation as we have seen with merger names like SPRT, BBIG, ANY, APOP etc. versus if they’re just the hot stock of the day with sympathies being slapped randomly?
— making sales (@making_sales) September 6, 2021
Hey just curious. Whats your mindset when a trade goes against you? Do you just get out early or if you have strong conviction do you wait for the trade to develop?
— Sherlock Stocks (@jamaalhadley24) September 4, 2021
You nailed the levels this week on the big short names this week, but I want to know how long do you hold the long swing continuation setups and when do you look to scale?
— Michael Stith (@MStith87) September 4, 2021
How to narrow down your trading list when you have a million "good" plays on scan?
— Krono Trader (@KronoTrader) September 4, 2021
Also, you say to short pops that fail. This confuses me. If I wait to see it fail Im hitting weakness instead of the pop. If I just short a pop, it sometimes keeps going higher. How do You short a failed pop.
— Sierra3 (@ctrssierra) September 4, 2021
When you mention “major exchange coming soon” , how do you anticipate that? It’s fascinating how accurate that always seems to be.
— Beginner Investor 📈 (@BeginnerInvest4) September 4, 2021
Video Scan and Game Plan
Stocks to Watch
LCID nice flush out and squeeze back I am looking for $20-20.50+ exhaustion move for a quick flush and if it stays heavy I'd be looking to scale into that trade much like the MMAT trade on Friday.
HUT higher better -nice trader on Friday steady squeeze out $11.50-12 would be fantastic for a fail back towards prior close. If it doesn't have a big move off open possible trend join if $10.20s starts to base.
MMAT ideally gap up $5.50-5.80s range and then looking to trade the failed follow through again. Cautious getting aggressive in any one direction with bias as it may need a few consolidation days.
Failed Follow Through:
APOP higher better and looking to fill the gap. Ideally $6.80-7s + and then fade back towards $5. Killer trade from the key levels and failed follow through text book set up Friday - ideally get another solid entry but if not like most don't lose it off radar.
ANY monster short squeeze on Thursday wish I didn't hedge any from the $10.80s short scale but -- so missed a home run trade but given how trading has been I'm trying to stay firing on all cylinders without major headaches. Highly likely they'd be raising but if they didn't ... well we could have had round two squeeze 4-7AM and it's not something I wanted to deal with so it was only minimal exposure I took as noted Thursday night.
BBIG let this go through the process of everyone trying to figure it out and getting sick of getting chopped - once everyone forgets and gives up in a day or two (or sooner) should be a much cleaner trade. Look left and stay familiar with key levels of support / resistance as it's been super on point!
BTCM standard exhaustion move - extremely clean failed follow through and complete unwind. I'd love to see a morning shove $12.50 or higher (towards VWAP) before fading off.
DLPN I think people will forget about soon - ideally if TKAT stays down this should quietly produce another nice fade. Same as ALF idea etc.
AEHR swing trade working well so far as reminded always any HUGE moves like we had I like to adjust risk along. S-3 on Friday AHs so possible weak open if it starts to stabilize I will look to re add what I sold into the parabolic moves BUT my overall thesis remains the same from my mid $6 swing trade entry based on the chart we went over last week.
SNMP $1.20 on the daily has been a key level last few attempts - it's daily chart VWAP but each time it's kissed it it's failed back to $1.10s. I've been swinging from low $1s nothing I'd chase up but if $1.20 starts to firm up well it could have a nice secondary move. Assuming it fails until it proves otherwise any FAST moves I like locking in around core and re scaling as things get stronger.
MTTR so far good - nice swing trade based on the daily chart break out earlier in the week.
RKLB very nice name produced from our WSB algo in the room - big mover locked in 2/3s of it on Friday looking to re build core if $13s stay firm next few days.