Chop Continues

Thursday 11/2/17

 

Bullish Hammer on the SPY

Overall Market-

Price action quickly recovering after a rapid morning sell off. Closing bullish despite concerns over Tax reform and Fed Chair naming.

Tax reform will have impacts on what appears to be most business and most every household. If it passes we could see a shift in where big money places their bets.

"Kevin O'Leary believes small-cap and mid-cap stocks are going to benefit the most. He said that iShares Russell 2000 Index (ETF) (NYSE:IWM) will outperform SPDR S&P 500 ETF Trust (NYSE:SPY) next year."

While Kevin is not often referred to as an investing guru, his statement holds credence, the proposed tax plan will most benefit small to mid cap companies, giving them the biggest opportunity for growth in theory. Those who are ETF investors or long term holders may want to look deeper into this statement.

SPY shaking off what could have been a nasty day. Seasonal tail wind may well push November and December into new all time highs. Again here, status quo, Trend is our friend. Long until proven otherwise.

VIX (Volitility) testing lows here, could be an opportunity to go inverse volatility, use care with any of these levered ETF's some names include $XIV, $SVXY, $ZIV, $VIOP ; if for some reason the market tanks look to long volatility in the sister names to these tickers.

FCX (Freeport) As stated, I am watching to short, bears remain in control, daily candle showing weakness, still seeing multiple indicators to the short side. Stop loss on a short for me will be $14.38, target to test 200dEMA $13.57, Risk -$0.15/share

CHK  (Chesapeake) Closed my long 200 shares at open. Took the loss here. This is looking to be curtains for the long opportunity. Chart now showing bearish price action. Daily candle is strong bear. Earnings beat, bad conference call. Price targets calling for $2.00, may well end up being correct here. I will look to short if we break long term support of $3.50 area.

AMD  (Advanced Micro Devices) BOUNCE PLAY, chart here is UGLY, major indecision on price, daily candle giving no sign as to direction. Potential support building at $10.75 level. Will continue to watch.

SNAP (snapchat) Showing support again at $14.50, Earnings is coming on Tuesday, I will most likely be avoiding this ticker before report, barring a strong scalp or momentum play, this is off the table for me, to much risk if earnings are weak.

 

TOP watch for this week and tomorrow;

  • $MRNS(Anyone who took a long trade on this ticker is in the drivers seat, potential to breakout over $6.50)
  • $NGL (short signal here was correct, closing at LOD, short should continue)
  • $IMGN (forming a falling wedge, if earnings tomorrow are bad, this could be a strong short, good earnings may signal a bounce and pivot, will be watching)

 

  • $QBAK - strong set up, lacking volume. (this one is starting to be painful to watch, I still refuse to touch as volume has been way to low to trade, but this is up over a point and a half since first mentions on the blog, of note today's volume was finally over 100,000 shares, this is forming a major rising wedge on the daily, weekly is also confirming set up. I assume volume today was from this set up, it is very bullish, long term trend is up, we are approaching the wedge top, $8.11 is breakout level based on wedge formation.) For those of you that are long term buy and hold traders, this is the kind of set up you need to be looking for and buying on long term support. The reason I can not justify trading this in the short term, hours/days time frame, is simply a lack of volume, however if volume continues to increase this play will be on the table.

 

  • $HTGM (will continue to watch as breakout level could see strong move, no position. not the best daily set up here off yesterdays doji)
  • $MGTI (hanging candle here, looking to short with a stop at $2.00 here, would like to see a test of $1.70 level)


Low float tickers to watch

  • $PYDS (Called this move, nearly perfect. Closed on intraday support $3.45, Mondays report was strong but we are now up 129% since then. Keep on watch.)
  • $HMNY (tabled for now, potential short, just don't like this set up)
  • $IZEA (Ugly day, believe it or not... uptrend is intact on daily even with this confusing red candle, still watching for breakout and gap fill play.)
  • $SKLN (Short call here was correct, strong bear signal continues.)
  • $ATOS (not a great set up here, still watching as $0.40 level continues to build support), $TEUM,$NETE (consolidation, low volume),$TNDM (breaking down. not best for long play. Trend continues short. )

Low Float/Small Cap momentum-

Keep all shippers on watch tomorrow DCIX could potentially start a fire in bulk shippers after today's price Acton.

Momentum continues keep the ball rolling, do not fight this. Go with the volume and bullish flow. Enter for 5 min breakout plays. Keep tight stops. Let your runners go!

No end in sight for the momentum in this market. Just don't get greedy, keep compounding and taking profit when the market makes it available to you. Cut your losses fast, there are too many strong plays to sit in a losing position for long.

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:

In all of my time trading I do not remember an extended period of time when the market has made so much money reliably available in large, mid and small cap stocks. 

Just remember team, protect your accounts, protect your profits and keep your losses small. It is easy to get over aggressive or greedy. Accounts can be lost in a day that you have spent years building.

Keep this close to your mind while trading... Do not worry about capturing all of these moves, you only need a portion of a large move to make a profit. Do not worry about "leaving money on the table"; no one ever went broke taking a profit!

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 my 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.