Bitcoin FRENZY

Morning Edition 12/19/17 

Overall Market-

Broad-market exchange-traded funds, including SPY, IWM and IVV were higher. Actively traded PowerShares QQQ (QQQ) was up 0.8%.

U.S. stocks extended gains into the session' s half amid expectations Congress will pass pro-growth tax legislation, which drove the major market averages to record highs and the Nasdaq above the 7,000 milestone.

Among the final tweaks to the bill are the following provisions:

  • A corporate tax rate of 21 percent versus 20 percent in both the House and Senate bills.
  • A top marginal interest rate of 37 percent, rather than 38.5 percent in the Senate bill and 39.6 percent in the House bill. 
  • A mortgage interest deduction cap of $750,000 versus $1 million in the Senate bill and $500,000 in the House bill.

 

Price Action

  • Investors are certainly optimistic about the impact the bill could have on the market. Here’s a look at how popular ETFs were trading on Monday morning ahead of the vote:

  • SPDR S&P 500 ETF Trust (NYSE:SPY) was up 0.6 percent.
  • SPDR Dow Jones Industrial Average ETF (NYSE:DIA) was up 0.7 percent.
  • Financial Select Sector SPDR Fund (NYSE:XLF) was up 0.9 percent.

Shy of some surprise and terrible action taken either by or against North Korea, It would be relatively safe to say the Santa Rally will be strong in the final days ahead for 2017. 

 

VIX (Volitility) VIX back in historical low range, there is a trade oppertunity here should Tax Reform fall through or some action with North Korea comes to light.

NVDA  Closing above 20 & 50 day EMAs. Strong sign for bulls here. Volume was lighter than I would have liked for such a strong technical break. Today's price action will be key for a longer term move higher to test price target between $206 -$227

FCX (Freeport) (Updated 12/19/17 bulls remain in full control. Weekly 200 period is now on deck to be tested.) This breakout is showing incredible strength, 200 period EMA on the weekly chart is sitting at $17.69. We are flirting with a new 52 week high at current levels. we are confirming a full on bull chart since lows in 2016. I have been bullish on FCX for the last 18 months and see no reason for things to change. Disclosure: I own FCX in my IRA average cost of $9.44 with no intention of selling.

CHK  (Chesapeake) (Update 12/19/17 - Price bouncing at key level $3.50, Natural gas is experiencing a small bounce helping price here, additionally there is some seasonal energy rotation happening. I will be watching $3.85 level for resistance on this move) Critical price level here. Without the aid of some positive news this looks as thought the sell off will continue. There is no reason based on techincals for this to maintain current price levels. I truly believe the $3 spot is on deck for this ticker.

XLE (SPDR Sector energy) uptrend in this sector remains in tact. 200dEMA $67.71

MRO (Marathon Oil) No chance still long - (Update 12/11/17 - weak candle, still long) Long signal, target to test $15.75-$16.00 level.


AMD  (Advanced Micro Devices) (update 12/19/17 This set up is working great, incredible volume at open, filled higher than i would like, $10.69 holding 2k size on this position, volume on our daily chart was strong, potential for a move higher price targets $11.24-$12.55) TRADE IDEA Chart is finally showing an opportunity to move higher off this base. Swing trade potential. We have $1.50 to 200dEMA. RSI confirming divergence, MACD crossing with volume during fridays session. Risk price level $9.74 (2:1 risk reward)

SNAP (snapchat) (Update 12/19/17 Looking for the blow off day at the top of this move for a short signal, would love for a pin bar or djoi to form and allow shorts to move in. no position currently) Technicals are aproaching overbought levels. Trend is not yet exhausted. We could see a test of the 200dEMA $16.81. I will continue to look for weakness to short on. Congratulations to all longs, just be sure to not overstay your welcome. Chart is showing signs of profit taking in current supply levels.

Natural Gas (JAN 18 contract): (update 12/19/17 small bounce off lows here, overhead resistance still looks to be strong. Inventory report will be needed for a full on reversal of trend at these levels.) I remain counter trend in my sentiment here. Rarely do I attempt to catch a bottom however price level here is to attractive for me to ignore. 52 week low is $2.522. Price action during Fridays session nearly tested those levels. at time of writing futures price $2.648. Will watch for a new long.

Trend Watch

  • $IMGN (Update 12/13/17 alerted swing to subscribers 12/12/17 at $6.00, stop $5.70, techincals have room to run here, volume and potential squeeze on deck.)(update 12/10/17 most indicators here are bullish, RSI cross mid line, MACD strong, patterns confirming. Be on watch for swing alert on this name.)Looking to add above $6.00 for next leg.
  • QBAK (update 12/19/17 MACD cross daily, will buy a pull back on small size, keep in mind this name has low volume, large spreads and trades choppy intra day. swing potential only. )Technicals here showing ready to breakout. With news this one explodes, do not give up on this one just yet.
  • $ONCS (update 12/19/17 continued consolidation in this range, healthy support and base building above $1.53, will look for a swing entry as technicals start to cool) watching key price level $1.53. That is our last fib level for a healthy bounce here.
  • JP - techincals on the daily chart are showing potential. on watch for a swing position. Volume lower the last few sessions. Will watch in coming week for price action.
  • VRX - (update 12/19/17 I will be using $19.75 as key price level in this expansion zone we are trading in. Would like to see some consolidation or a pull back before entering, trend is nearly exausted.) djoi on daily, lower volume. Not sure if selling is finished off this recent breakout.

Robinhood Challenge: $RCON 275 shares @ $1.21, higher risk swing trade.

 

Low float watchlist plays

  • TNDM (updated 12/19/17 added to this position on 12/18/17 3k size at $2.55 now holding 6k shares here, price target $2.90-$3.25, time line 3 weeks)(update 12/11/17 Alerted swing here $2.40 entry, stop $2.18, 3k size, target $3.00) Will enter long tomorrow, defined risk. Long term swing. Set and forget. Risk here is $0.26 share+-
  • EKSO (update 12/19/17 doji on daily, watch for a bounce or return to long trend at this level) back at critical price $2.25 (200dEMA) level, watch for direction.
  • EGLT (update 12/19/17 missed entry before the bounce on this one, not willing to buy up 20+% from my original entry, will watch price action in coming days.)Strong move on news friday, need support $1
  • SALT - (update 12/19/17 alerted a swing entry $7.53, stop $7.15, targets $8.29-$9.20, entry is higher than I would like here only have 1k size.) (update 12/13/17 - potential pull back here, will look to enter on signal.) some nice geometry showing potential to move into $8.50 level.

 

BITCOIN/CRYPTO

FRENZY!!!! buy everything or anything that has the letters B, I, T, C, O, I, or N... (Could not resist an off color joke here.) In all honesty bitcoin frenzy is so high right now that anything even rumored to be associated with any kind of block chain technology is going bonkers. 

Example : LFIN - an absurd move with a low float going from $5 to $140+ in less than 48 hours! Sounds fun on the surface until you realize that since yesterdays highs it has lost nearly 65% and is trading pre market in the $50 range. Moral of the story here, AVOID this garbage. At best you hit a home run and ride off into the sunset with a load of cash. In reality, you are likely to suffer huge losses, expose yourself to far to much risk and even if you do manage a large win, it will likely distort all future gains and losses making it very hard to effectively trade "normal" moves in the future. Most people can not handle gains or losses on the scale that bitcoin/blockchain is currently presenting to traders.

I am saying this to all of us, myself included. There will most likely never be another bitcoin type scenario in our trading lifetimes. If you are a crypto trader and have made thousands or millions, please understand this is a gift and needs to be treated with respect that such gains demand or you will quickly lose everything you have been given. 

Do not expect this kind of environment to continue for much longer, something has to give, we can not continue to have hundreds of percent movers back to back before some kind of government regulation will step in. At this point there is BILLIONS of dollars in taxes unpaid on crpyto currency, you better believe someone in governments all over the world is looking at a chance for "capital gains tax". For those of you that do not understand what is happening with taxes and crypto, technically (i use this term loosely as there is a serious grey area involving capital gains and crypto) since bitcoin is not an recognized currency, you can keep your gains free of tax... UNTIL converted to USD, at which point you owe the government a load of cash. In my uneducated opinion, this will be the pin to burst the bubble, as people panic when bitcoin starts to lose value and then realize they owe potentially hundreds of thousands in tax. 

  • GROW: 
  • TEUM:
  • SRAX:
  • RIOT:
  • MARA:
  • DPW:
  • XNET:

Breakout potential list 12/19/17

  • EYES interested for breakout over $2.00 with volume.
  • ROKA believe in breakout here, like this $1 level holding.
  • PYDS former runner, volume alert.
  • ITUS high alert, trend is long here. need volume.
  • ICHR bouncing off 200dEMA with volume, technical ripe for a move higher.
  • LFIN (update 12/19/17 toxic and volatile, small size only. even 100 shares here can lead to some large gains or losses.) 300% move on friday. literally uncharted ticker only 3 days of price action. No clue where this one goes. Supply zone from Fridays trading lies between $15-$18 range. Potential for a upper supply zone $22-$24 dollar range.

Fire watchlist for market day 12/19/17

  • PTX
  • IDXG
  • TEUM
  • INTV
  • RSYS

 

 

Low Float/Small Cap momentum-

Momentum is at a peak for all of 2017, unbelievable moves in lowfloat and crypto related plays. Use speed to lock in gains and cut losses fast. Do your best to not become greedy. Believe me when I say, I also day dream about using 10k worth of capital and making 6 figures off of it. That kind of thinking is a fools game, it will ruin even the best traders. Avoid it all all costs.

Continue to do whatever you have done to remain consistently profitable, do not change your long term strategy. By all means expose yourself to opportunity and crypto related plays but do so first with risk management at the heart of any trade. 


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:

Bull is the word for the remaining trading sessions in 2017. I may look to add to some long term positions I own. Ideally I will not be selling any swing positions if possible before the new year. I really have no desire to add to my tax bill this year. 

For those of you that are just now hitting your stride and starting to feel like a trader, use that confidence and momentum to carry you to new heights in 2018! Just keep your confidence and ego in check. Nothing will ruin your gains faster than ego getting in the way of proper trading. Even the best traders in the world struggle with ego. 

Use this time of year and the holiday as a reminder that each and everyone of us are blessed to be able to pursue trading. There are people and places in the world without access to high-speed internet, valuable tools or resources to better themselves. 

If you are reading this blog, I just want to say thank you again for being a member of our community, it is a joy to coach our students and help others reach peak performance. 

Lets finish the year strong and start 2018 with some serious momentum. 

Good luck team, Remain humble and hungry!

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.