New High November?

Sunday 11/5/17

 

Sounds the marching band

Overall Market-

Thursdays bullish hammer on the SPY proved true as we closed above the micro channel the spy has been trading in since mid October.

What does this mean for trading? All aboard the gains train! As always use caution but it seems no news is good news for all.

I will continue to watch for some political or world news event that could potentially pull the emergency break on this run away freight.

Events we should be watching. Anything Fed related (rate hikes can not be put off forever, right?), Tax Plan or North Korea.

SPY With the new week starting lets wait to see how traders settle in. Tomorrow could be a breakout but it is too early to tell on the chart if we will see the next level of expansion. It is more likely we will experience more chop until we get into holiday tailwind.

VIX (Volitility) I can not believe I am writing this... we may actually test and make new lows here, these are historic levels of complacency in the market. In the past I have traded very successfully off these lows. I will be watching for a squeeze in volatility this week. Remember any trade in leveraged ETF's are strictly scalps. Do NOT buy and hold.

FCX (Freeport) Short position opened on friday as stated. I do not like that price did not flush below $14.00. Stop loss to cover moved to $14.30, reducing risk here in case of bounce.

CHK  (Chesapeake) Chart getting a bit choppy. No clear direction. Will continue to watch $3.50 level. Any long here needs to be careful as we approach that level. If possible, I may pick up some shares to the long side above $3.60 for a defined risk play +-$0.15/share

AMD  (Advanced Micro Devices) BOUNCE PLAY, No position but it looks as thought $10.75 is shaping up as near term support. There is a good chance we form a new channle down here, that would be good for long term price action and new longs stepping in. Will look for price to hold above $11.00 level before entering long. Stop here would be down in the $10.50 area so size would need to be smaller with a $0.50/share risk.

SNAP (snapchat) Nice play off of $14.25 support we were watching. Resistance $15.36.. I still will not be trading this until after earnings. I am NOT a fundamental trader and do not know enough about SNAP to play the earnings game. If I was forced to bet, I would say a miss on earnings. Will wait to trade.

 

TOP watch for this week and tomorrow;

  • $MRNS(Close watch here for breakout above $6.50 level, quick move to $7.00 possible)
  • $NGL (friday gap down, major profits for shorts. Price recovered and filled gap, typically a bullish signal. will be watching for long opportunity.)
  • $IMGN (awkward price action off back of earnings. Huge miss but price action recovered, That typically is a signal for a bottom and move higher. Keep this on watch. Continue price action above 200dEMA will be a bullish signal)
  • $QBAK - Breakout - as anticipated, breakout above wedge was strong. volume increasing. still bullish, will continue to watch. Be careful with this ticker, spreads have been large and it is a tough one to trade with defined risk. Use small size if at all.
  • $HTGM (will continue to watch for breakout play above $2.60 level, trend is up, just choppy)
  • $MGTI (Short intact here, small size, stop at $2.00 look to test 200dEMA $1.70, use care here on a bounce, will move fast if she does.)


Low float tickers to watch
pay close attention to all squeeze candidates, we have seen several strong squeezes recently.

  • $PYDS (very choppy, watch above $3.50 for scalp with volume)
  • $HMNY (still tabled)
  • $IZEA (breaking down, watching support level $3)
  • $SKLN (If she breaks over $2 again and holds, short here is over. will look short under $1.87 or long above $2)
  • $ATOS (continued weakness, year low at $0.32, support at $0.40 may now be resistance)
  • $MSDI (bullish reversal here, watch for space between 50dEMA and 200dEMA for squeeze)
  • $INFI (micro channel breakout) (watch for continuation)
  • $ONCS (bullish move over 200dEMA, weekly and daily charts with volume watching for squeeze)
  • $LBIX former runner, very choppy price action. scalp potential.

Low Float/Small Cap momentum-

Continue to keep ALL bulk shippers on watch for Monday. There will be a lot of chop in these names on Monday. Retail will most likely be jumping in fast and hard looking for a repeat of Friday... DO NOT BE FOOLED. Friday was more than likely a once a year move. You will have scalp potential on these names but please do not go looking for 300% or 400% movers. Enter smart, do not chase, take profit and move on. Bulk Shipper tickers that move together listed below.

ESEA, DCIX, TOPS, SHIP, DRYS, GLBS, SINO

 

Fridays move in bulk shippers can have a horrible effect on momentum. It sounds contradictory but on some level people become greedy and no longer care about 10% or 25%, they want the jackpot, they have fever for easy money. Very quickly people start throwing money around and get burnt.

There is a chance Fridays move will spell the end of momentum in low floats. The psychology of those 600% moves distorts retail traders on so many levels. You have the smart traders who made a years salary in one day, the traders who missed the move and want revenge, and the traders who lost money and have something to prove. None of these states are good to be in.

I will do my best to forget that friday ever happened. Mondays price action can not repeat Fridays. If it does, I would rather be cautiously wrong and not get burned.

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:

Monday will be a signal for both the broad market and momentum. Keep watch on both. It will most likely be a sign of the week to come. 

Please use caution on Monday, I understand several members of our trade group made a lot of money Friday. I means nothing if you get greedy and give it back to the market because you feel you can't lose. I assure you, it is possible to lose EVERYTHING and then some. Stay humble.

Keep this close to your mind while trading... Do not worry about capturing all of these lighting 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.