Pitfalls - Week 8 - Finding the perfect entry and exit

Pitfalls - Week 8 - Finding the perfect entry and exit

When operating under the correct mindset the “perfect trade” becomes something completely different. A perfect entry and exit is one that has confluence, confirmation and high probability. The correct “perfect setup” will actually leave quite a bit of potential profits on the table, meaning you will be a bit late entering the move and a bit early exiting. Keep in mind this is by design.

Pitfalls - Week 7 - Ignoring Market Information

Pitfalls - Week 7 - Ignoring Market Information

Tracking your trading progress in a structured way is paramount to success, as we have discussed last week in tracking results. If you’re not, then you’re likely suffering from “The Ostrich Problem”, a phenomenon known for the widespread tendency for people to avoid information about progress towards their goals. After all, it feels good to keep moving, and who wants the frustration of discovering that they’ve actually been driving in the wrong direction?

Pitfalls - Week 6 - Not tracking or analyzing results

Pitfalls - Week 6 - Not tracking or analyzing results

“Stop gambling”

When you make a concerted effort to collect, analyze and test results. You move out of the realm of gambler and into the circle of champions who call themselves professionals. When you hear people speak about treating trading like a business, it is often paired to only managing 1% risk per trade. It goes far deeper than that. Your data, the statistics that back your trading are just as important.

Pitfalls - Week 5 - Lack of emotional control

Pitfalls - Week 5 - Lack of emotional control

In week 5 I would like to touch on a very broad but critical topic of emotional control. This area of trading is one that ALL traders regardless of experience struggle with. Most people feel that taking the emotion out of trading is an important factor to success. Personally I feel this is the wrong way of looking at this subject. I will do my best to explain why and how I feel you should NOT be removing emotion from your trading but rather HOW you should be managing emotion.

Rally Resumed


- Overall Market -

Fridays session ended on a very strong note, earlier in the session price was restricted and range bound as techincals tightened waiting on FED. After some dovish remarks from chairman Powell, the market was off the races. 

SPY (S&P 500 spider) - Technical breakout with fundamental backing. Over all the market looks very strong and is currently trading up in the futures market. I would look to see us hold above 273 for continued strength. 

VIX - (volatility) quickly coming back into acceptable range after Fridays strength. VIX currently at 16.50+- which is still higher than our average for the last 18 months but look to continue lower. We may have seen the end of our volatility trade for now. If the market is recovering I would look for VIX to settle in the 13 spot range and market bulls to rule the day again. This is all purly speculitave on my end, there are still a number of factors that could send this flying again but the market is strong. 

- Trend Watch -

APPL (apple) - looking bullish, this market monster showing great strength. 

AMD (Advanced Micro Devices) - This price is breaking out for a potential retest, last weeks price looked bearish, however after the rally on Friday we broke above a short term down trend resistance, potential to retest $13+- spot if fridays strength was true. 

XLE (Energy sector) - Technical heating up on the daily chart. Looks poised for a sector wide breakout. Look for energy related plays to potentially take advantage. 

HL - (Helca Mining) continues to trade down with trend, testing upper trend on down channel. A breakout above current falling resistance may signal a strong breakout to test neck line of this pattern. Should we fail here, a triple bottom may be in order. 

-  Bitcoin -

Bitcoin looks choppy to me. Yes, I understand there are many other "alt coins" but I only track bitcoin as a general "health of the sector" kind of thing. Although the euphoria surrounding most coin plays has died down, be mindful that get rich quick traders are still looking for the next big move to the upside. (if it ever comes). $GROW traded well in recent days, continue to watch this name for upside potential.


-  Low float watch -

$MOSY (Nice short term momentum, breakout watch) update - perfect breakout called here, on watch for continuation of this move. great strength, high risk
$APHB update - we got our gap and profits, congratulations to all swing subscribers. closed this last week. Keep this on watch for a rerun. 
$BSPM update - looks to be trying to find some legs here, techincals still need time to cool off, potential weak reversal candle on daily chart. Watch for signs of a move to the upside with volume.

-  Day Trade Watch 2/26/18 -

$EKSO - Attempted to buy this on a swing Friday, however volume and price moved faster than anticipated. Keep this on watch for a continuation, this name is a former running and low float. 

$NXTD - gaping up premarket with some volume, this name has been active in recent trading. keep on watch for a high volume breakout today. 

$BNSO - unusual price action, low volume. keep on watch.

$RNN - potential bottom, low float on watch for volume and move off lows. 


-  Closing Thoughts -

Bulls may have have finally one our short term stand off. I would not be very surprised to see in the coming weeks the market retest highs. Personally I still have concerns about the overall length of this current bull cycle. Some of those concerns have been quieted  by our strong pullback. Given that market technical have been given sufficient time to cool off, it seems only natural for a retest of highs to take place. 

We are headed into the end of the month, watch for day traders to put their foot to the gas in these few sessions. The month has been a bit choppy and not as profitable as past months for most traders. This may signal some agressive trading for many greedy indvduals. look to capatilize on momentum. 


Stay Hungry and Humble Team, Thank you!


Disclaimer: We are not responsible for losses for any reason. We are just an investing club here, seek financial advise from a professional before acting on any of this information. This information is strictly my opinion and what I am seeing in the market. The information above is not a trade recommendation to buy or sell. I am not a licensed broker, dealer or finical adviser. Trading comes with considerable risk and may not be for everyone. Past performance is not indicative of future performance. Never trade with money you can not lose and paper trade to prove profitability before using real money.

To the point


- Overall Market -

In an effort to clean the blog up and make it easy to follow and read for our new members. We will keep focus on a hand full of market indicators and a few trending tickers. As the market continues settles in this week we will expand our focus and outlook.

SPY (S&P 500 spider) - Price action showing great strength for a rebound after our correction. Note that we are now consolidating in the upper trendline of our precious channel on the weekly. This is a good sign for overall health. Price may get choppy and we may yet trade lower from here. However, I am hopeful that any selling will be orderly and less panic stricken. Key price levels I am watching 270 to the low side and 275 to the high side. How price acts at these levels will be telling.


VIX - (volatility) During last week price settled into the previously mentioned 18 spot. I do not foresee us heading back to historically low volatility levels any time soon. We are currently above 20, continuing to show potential for some volatility trading in the next 30 days based on S&P option implied volatility. Over the coming weeks it would be nice to see this settle into around the 15 area. This will provide good trading opportunity for both sides of the market. 

- Trend Watch -

APPL (apple) - looks to have recovered nicely. This may be a buying opportunity for me if price continues above 170 level.

AMD (Advanced Micro Devices) - Price action is showing a bear signal with potential geometry down to $10.50 level. The semiconductor space has gained momentum and this name is losing some steam. Keep on watch for a potential short.

XLE (Energy sector) - Price here looks to have potentially found a new base, we are well off recent highs. I will look to see if we hold this level. Should the sector find legs, some value buying in energy plays may open.

VALE - very bullish chart, pushing to new highs. Opportunity for both bulls and bears to day trade this ticker. Weekly is over bought, daily chart has room to move higher. Very interesting for intraday traders. 

HL - (Helca Mining) as discussed in our video. I like this double bottom potential play. Keep on watch. 

-  Bitcoin -

Bitcoin is recovering in price, I expect to see some stock side sympathy with known block chain names. $GROW is showing some strength in recent session, keep this ticker on watch for a breakout.


-  Low float watch -

$MOSY (Nice short term mometum, breakout watch)
$APHB (slowly grinding higher, needs heavy volume to breakout)
$BSPM (choppy but overall has seen recent strength)

-  Closing Thoughts -

The market has been challenging this month. Trend following has seen its legs chopped and value buyers may have capitalized on a well needed pull back. Be patient and let the market settle in after a long weekend. 

Continue to keep risk at the center of your focus for all trading activity. Cut losses and let winners trade. Blog will continue to become more robust as trading this week will provide some clues for market sentiment.

Stay Hungry and Humble Team, Thank you!


First Video Lesson

Hello Traders!

I am happy to post our first private video for members on the blog. There are still some kinks for me work out with the audio and I am far from perfect with production but I am pleased to present this to you guys.

Please leave feedback on the video or send me a message. I would love to continue to produce content for our members. Just like trading, I will look to always make these better, your comments will really help in that department. Quality and easy to use is my goal.

A full standard blog will be released. For now enjoy this video.

More indepth videos and lessons comming on all topis related to trading.

Thank you all very much.



CPI Potential & Importance

2/14/18 (Long educational post today)

- Overall Market -

U.S stocks appear to have stabilized on lower volume trading for the time being. Dovish comments from new Fed Chairman Jerome Powell echoed Janet Yellen's position regarding liquidity when he said the Fed will "remain alert to any financial stability risks."

Many media outlets have been discussing the CIP (Consumer Price Index) and its significance. I feel this is an important topic to touch on and why traders should be alert.

There has been some money on the sidelines that has yet to buy this dip, why you may ask? Because the impact of this report may give clue as to a potential market shift and it's timing. To better understand the significance on why this monthly report is critical and more directly this reports results. 

- What is the CIP? -

So what is the Consumer Price Index? The text book answer... consumer price index (CPI) measures changes in the price level of market basket of consumer goods and services purchased by households. The CPI is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically.

The simple answer; the CPI measures goods and services that you and I pay to live. It tracks how these costs rise over time and is released as a monthly report for public use. Remember the last time you were at the food store and said something akin to " X item is way more expensive than just last year". You may not actually say that but the point remains. 

The CPI is an attempt to measure over a broad picture (without getting into the macro of each market) how costs are slowly rising. 

This may be confusing on the surface as to why the report is important but it has a very deep tie to the heart of two things that impact equity markets. Those two topics are inflation and the central banks obligation to adjust interest rates. 

- Milk cost .0034 more this month, so what! -

While you may not care about incrementally increasing prices slowly over time, you should. Investors and economists are always looking to say ahead of the trend, to look for and identify potential shifts or changes in the market before they happen.  

This leads us into the next topic INFLATION. Few understand its far reaching impact and why it is so critical.

Inflation—the rise in the price of goods and services—reduces the purchasing power each unit of currency can buy. Rising inflation has an insidious effect: input prices are higher, consumers can purchase fewer goods, revenues and profits decline, and the economy slows for a time until a steady state is reached.

For quite some time inflation has been low and prices have remained stable. This keeps consumer spending high, propelling economic growth. As inflation remains low, interest rates also remain low (we will discuss why in our next section). When interest rates are low, bond yields are low, money is cheep to borrow. This skews risk reward in the favor of stocks. As you have seen a low rate environment can push stocks to incredible highs as we have recently experienced. 

Inflation occurs naturally over time as the cost of business rises it is passed on to the consumer. The fear becomes when jobs data (wage earning, wage increases, unemployment ect..) is no longer out pacing inflation. This is where central banks come in.


- A Necessary Evil -

Central banks receive a lot of heat and scrutiny, some of it is warranted, some not.  The duty of a central bank is massive in scope and a few miss steps can cause a country or global collapse. (yes central banks had a hand in the 2008 crisis.)

To oversimplify the central bank here is a very condensed list of duties.

  • implementing monetary policies.
  • setting the official interest rate – used to manage both inflation and the country's exchange rate – and ensuring that this rate takes effect via a variety of policy mechanisms.
  • controlling the nation's entire money supply.

In a nut shell, it is the central banks obligation to keep in check inflation and the value of the dollar. (some believe central banks should be removed and let the free market work itself out on its on.) 

As inflation starts to rise through measurable means as the CPI, the fed is forced to respond with monetary policy changes. The most common solution to inflation is to increase rates. Why? because in effect it can slow down the economy and keep inflation from getting ahead of itself. 

The broad idea behind this is simply put; debt becomes more expensive to leverage. Companies do not expand, rents go up and people are forced to buy homes to protect from rising rates, margins are reduced, over heads increased. The effect is the economy cools off for a bit and in theory individuals save more as rates make saving and bods more attractive. This  allows inflation to slow. 

wither you agree or disagree with this policy is irrelevant, it is a fact of our central bank and we must live with it. As investors or traders we must use every tool at our disposal. Keep in mind that CPI is a trade-able event for most currency traders. 

- Why this report is so critical -

The Fed has given statement in recent FOMC for the need to increase frequency of rate hikes. Now all they need is a reason to do so. Last weeks job report was less that stellar and called a contributing factor to the sell off. 

Should the CPI show inflation increasing above expected rate, there is cause for the fed to react and the market to respond in kind.  

The likely reaction in the case of inflation increase would be for fed to accelerate rate hikes or have larger basis point increases. As discussed risk reward on equity markets could slowly shift causing less buying overall. 


- Putting it all together -

While I have barely scratched the surface of the impacts of these topics and how they tie in to other aspects of the financial markets and economy, I do hope this helps provide clarity on why there is so much talk about this event today. 

Yes, it is true. You and I have little impact on the market when we buy or sell individually but fund managers and market analysts do. Sifts in the market come quietly in reports like this, when sentiment changes ever so slightly. Add up a few reports and fed statements, you can see how market cycles begin to form and price action occurs on a larger time-frame and scale. 

Typically by the time "dumb money" or retail traders realize what is happening the market is already made a major fundamental shift and are left holding the bag for smart money. 

None of this information will make you rich or provide you with a winning trade but I truly hope it opens your eyes to the importance in the little things that have huge impacts. the difference between .02 and .03 in this report may be all is needed to strike a uneasy tone in the market. 

I will look to capitalize on this in the short time with volatility. As you may well know by now, I am big on short term volatility trading during appropriate moments. Just be aware volatility trading has massive risks and should never expose large amounts of capital to. 


Keep risk at the forefront of any strategy you trade. Remain confident in your ability. If you have not traded in a correction before, take your foot off the gas and observe how the market trades.

Thank you again, and remain hungry and humble!


Disclaimer: We are not responsible for losses for any reason. We are just an investing club here, seek financial advise from a professional before acting on any of this information. This information is strictly my opinion and what I am seeing in the market. The information above is not a trade recommendation to buy or sell. I am not a licensed broker, dealer or finical adviser. Trading comes with considerable risk and may not be for everyone. Past performance is not indicative of future performance. Never trade with money you can not lose and paper trade to prove profitability before using real money.


Correction Corrected?


- Overall Market -

U.S. stocks plummeted 5.2% last week, Strategists pinned the drop in part on the need for a healthy correction after the run-up of the past few months, and on rising bond yields, which ticked up on sign of impending inflation. The higher yields lured money out of equities.

Market bulls aren't throwing in the towel yet... Futures trading has shown strong bullish action since Sunday evening open. As of this morning e-mini futures have traded up to 2,650 level. This has been a reaction zone in previous sessions. 

Last weeks sell off was blamed on nearly anything you could throw a dart at. Many were screaming that volatility traders started the sell off with the inverse volatility trade that saw a 95% drop in a matter of hours. Others were blaming inflation and bond yields. Others screaming that the jobs number starteled the market. Even so far as to say the economy is "over heating".  In my very simple opinion, it is something far more straight forward than that.

Simply put the market has not has a real correction in 18 months, nothing more nothing less. Yes, there were contributing factors to this broad selling but things were simply way to expensive and forward pricing was upwards of 18 times earnings on some names, just far to much to pay.

From the technical side of this correction, it has been easy to see coming. Moving averages were extended, trend and strength indicators such as our previously mentioned RSI reading on the SPY over a whopping 87! volatility had diverted from price action; Something had to give.

In an age of algorithmic and high frequency trading it is easy for things to go up and down rapidly.  While Our pull back was fast and incredibly violent, it remained relatively orderly through most trading. 

- Looking Ahead -

Looking forward the question becomes, what does this mean for the market? I personally see this as a buying opportunity for long term positions and as previously stated have received phone calls from many financial professionals stating the same. The overall state of the economy appears strong, key metrics for growth and stability are also solid. 

As shorter time frame swing traders may have seen the end of the "easy money" bull market. Most likely we will now resume choppy trading from these levels. Proper technical analysis and stocks grounded in strong fundamentals will be key to success in an environment like this. I do not see it likely that we zoom back to all time highs in a few day. 

Be mindful that this correction can still technically go another 2%-4% however if volume is to be any indicator, it looks as though at least for the time being a swing low of this move has been established.

- Keeping a level head -

I receive many emails, messages and questions through social media and our students. Do not be discouraged if you personally are experiencing reduced performance or some mounted losses. The last two weeks have provided great opportunity in volatility trading and those who were bearish on commodities saw some incredible profits as both oil and natural gas saw heavy selling. For everyone else, it is likely you experienced some significant losses in unrealized profits or realized losses. Much wealth was destroyed in last weeks rout of the market. 

For those of you new to the market it is typical that once a year we see a correction of some type. Recently they have been very short lived lasting less than a week. Historically a pull back takes place over the course of 3 months. Your best chance to grow your wealth by leaps and bounds is buying while fear is high. In this case buying pull backs or eventually the end of the next bear market, which will eventually come to pass. 

While I rarely give financial advise, I will say this.. If you own long term investments in a 401k, IRA or other avenue for retirement. ALWAYS speak with a financial professional to get a better understanding of things. Yes, I know they are not traders but they are well versed in knowing how different markets, interest rates, global events interact and can provide insight into historical data that few retail traders even know exist.

- A higher interest rate environment  -

Understanding that rising interest rates is a coming reality, can help us look for some longer term vehicles to trade. As would be expected the financial sector tends to do well in a higher rate market. Financial sector components see margins expand as rates climb, financial entities such as banks, insurance companies, brokerage firms have historically benefited from higher interest rates.

A short list of bank stocks to consider that have historically benefited. 
Bank of America Corp. (BAC); JPMorgan Chase & Co. (JPM); Goldman Sachs Group Inc. (GS); Citigroup Inc. (C)

If you trade on a full service platform and utilize margin to trade, you can guess that money from your broker will become more expensive to borrow. Similar to banks, we have a chance to see some correlation. Some of the most well know brokers to consider

E*TRADE  Financial Corp. (ETFC); Charles Schwab Corp. (SCHW);  TD Ameritrade Holding Corp. (AMTD)

Insurance companies also see a high level of correlation to rising rates. This industry is large and includes some good and poor companies. Below is a list of some names I have traded in the past.  


Make sure to do your own research for the above financial sector names, be mindful that as interest rates rising is good for these stocks, it is often times not great for the overall economy. There is a balance between good rates, good inflation and over inflation. In a situation where lending slows down, any financial institution can become a risk, regardless of interest rates. Think of 2007-2008 financial crisis as an example here. 


- Trading -

You will find that many large cap stocks have pulled back to 100 or 200 day moving averages. This is due to them broadly following the indexes. Be mindful that many technical indicators will be giving false signals for some time, potentially even the next few weeks. 

Focus for me will be on buying value. This means buying only stocks that were in a strong uptrend prior to last weeks sell off. Any stocks that have shown prior weakness have a potential to continue bearish, at some point price action will cause traders and computers alike to sell lower.

If you are risk adverse or do not trade well in high volatility environments, it may be prudent to avoid trading until the market suits your strategy. 

Keep in the front of your mind the ability for the market to change rapidly. If you are a trader this will mean locking profits and looking to renter, if you are an investor most likely nothing changes for you.


 - Market - 

As price action has caused many erratic changes, I will avoid technical notes on individual stocks. Many indicators will be giving false signals for quite some time. potentially even the next few weeks. Instead I will focus on sectors as a whole to identify potential value.

VIX (Volatility) Spiking to a high of 40 on the volatility index during fridays session. As buyers entered the market and volume appeared to find a bottom, this slowly eased off. We are now seeing this index at 26. I would like to see this down to 14-18 spot. Numbers this high are continuing to show some genuine fear in the market. Watch for this to come down into a more acceptable historic range.

XSD (S&P Semiconductor Select Industry Index) Sector trading under 200dEMA, a strong flush under this level seen last week. Two closes below this key level. Price must now retest from the lower side of the moving average. May be a bearish signal for the sector or at the least some weakness showing.

XLE (SPDR S&P energy)Sector trading well under the 200dEMA, Oil and natural gas both giving back recent gains and continue to show weakness. This is holding down most energy sector names. Historically energy does not fair well in a higher interest environment. We may see money start to flow out of this sector. 

XBI (SPDR S&P Biotech)Sector looks to retain its strength. Biotech has been strong since President Trump was elected. Price action never touched the 200dEMA and is trading well above. Resistance now looks to be the 50dEMA which is currently being tested from the low side. I will watch for strength to continue here should the market hold. 

XLF (Financial Select Sector SPDR Fund) Sector with great strength during the correction. This is to be anticipated as we have discussed the possibility of higher interest rates. I would look to see this sector experience positive inflow as traders and investors may attempt to position ahead of any coming rate hikes. 

XLV (Health Care SPDR ETF) Sector holding above 200dEMA but showing weakness as we closed once below and probed even lower during Fridays session. Price has recovered and closed above the 200dEMA which is a good sign. We must remain above the 200 day for any real strength here. 


 Be mindful that crypto prices are attempting to break a down channel we have traded in for the last month. If we breakout of that channel to the upside we may see some sympathy in former names $GROW, $TEUM, $SRAX, $RIOT, $MARA, $DPW, $XNET


Fire watchlist for market day 2/12/18

  • TWTR
  • AMD
  • NVDA
  • UVXY (long vol)/SVXY (short vol)
  • CTRV
  • DGAZ

Low Float/Small Cap momentum-

Give momentum some time in low floats to come back to life. Last weeks panic selling really upset the apple cart. Ideally I would love to see a multi bagger get retail excited again. Take your time on this critical Monday and let the market dictate how to trade. Do not try to force huge gains out of a situation where they may not exist.

Momentum disclaimer:
Use caution when trading these low float names, they can crash even faster then they rise. Lock profits and do not look back, never play the "what if" game on these names. You can be up or down several hundred or THOUSANDS of dollars in minutes and in the case of a T12 material halt, you could be in for massive pain or worse be trapped in a position for days or weeks until material evidence is sufficient to remove halt.

Closing Notes:

Relax and take a deep breath. There is no reason to panic or become frustrated with the market. While I believe we are in a bull market for some time to come, temper your expectations. The period of expansion experienced in the last 12 months has been incredible. 

Not only is it unsustainable but it is historically unhealthy for the markets to continue the way they were. Be thankful the correction came at a time when the economy or we may be having a totally different conversation today. 

Keep risk at the forefront of any strategy you trade. Remain confident in your ability. If you have not traded in a correction before, take your foot off the gas and observe how the market trades.

Thank you again, and remain hungry and humble!


Disclaimer: We are not responsible for losses for any reason. We are just an investing club here, seek financial advise from a professional before acting on any of this information. This information is strictly my opinion and what I am seeing in the market. The information above is not a trade recommendation to buy or sell. I am not a licensed broker, dealer or finical adviser. Trading comes with considerable risk and may not be for everyone. Past performance is not indicative of future performance. Never trade with money you can not lose and paper trade to prove profitability before using real money.

Small Recovery


A Small Recovery Stalled at resistance

Premarket trading for yesterdays market was posting an implied dow open of -800 points! Thankfully at market open things remained orderly, buyers stepped in to save the market and selling pressure subsided as value buyers showed conviction. 


Futures trading has stalled at the mentioned 2700 level that was previous support. Premarket trading is low volume and showing very choppy. Today's trading will be key to break above and hold this market level.

Due to the violence of the recent sell off most charts are not sound for technical trading.  Many large-cap stocks have pulled back to their 50 day moving averages. This is an opportunity for Value buyers to step in and acquire shares at a lower price. 

I do not believe in a market crash, while there is weakness and we may have seen the end of the slow and steady grind higher daily. I still believe we are in a bull market.

Some key things to keep an eye on in the coming days and weeks. Interest rates or news from the fed, higher interest rates are typically bad for the market. Bond yields are a big deal here, if bonds become more attractive as rates move higher we can start to see the beginning of the end. Many are looking for an "inverted yield curve" this has preceded nearly every bear market, technically we are anywhere from 12 to 24 months before this yield curve. 

Continue to remain bullish for now but watch 2700 closely. We may have trouble with this price level.


I will refrain from tracking individual stocks this week. There is too much noise in recent price action. 

If you have a stock you love in the long term, we may be seeing a good buying opportunity. I personally received 4 phone calls from financial "professionals/advisors" yesterday begging me to buy.  These conversations all went back to ETF's they are hot right now. A pullback like this offers a broad buying opportunity and sector ETF's are a great way to buy and hold larger portions of the market such as health care, energy, financial, retail or other sectors. Most brokers have a list of ETF's you can trade on their platform. some even commission free. 


I will begin to track individual positions again as volatility lowers and price action settles in. I anticipate the price to settle by the end of the trading week. This weekend will be a large blog full of value and ideas to take advantage of this recent market event.


Continue to protect your capital.

Trade safe, remain hungry and humble.

Thank you!