Fresh Start 2018

1/1/18

Overall Market-

Market unable to sustain their rally on the last trading day of 2017, turning negative at session's half, after a year of multiple record highs that saw all three benchmarks surge. Despite the losses, for 2017 the Dow Jones Industrial Average is poised for a gain of almost 26%, the Nasdaq Composite is up 29% and the S&P 500 has increased 20%.

The large question looms over the market, when is our well over due correction coming? Further more have stocks simply become widely over valued and has price risen to high to fast?

My opinion has been clear for a while now, this market is way over extended and is due for a pull back. The market has not shown any weakness, the larger this run, the more likely the pullback will be sizable.

Historically speaking the "January Effect" should continue this rally based on probability for price data in past decades. I am cautious with tensions on North Korea but see no reason to take money off the table at this point.

 

VIX (Volitility) VIX spike on the last session of 2017. Futures are showing recovery from sell off.

NVDA (Nvidia corp)  weakness showing in this name signals for continued short

AMD (Advanced Micro Devices) weakness here as well, stopped on position at break even. Multiple signals for short.

SOXX (Semicondector ETF long) This sector ETF is barely holding on to the 13dEMA, weakness in this sector continues. Shorts look to be in control for now. Institutional money is showing signs of leaving this sector in the last quarter. Leaving retail holding the bag here, use caution if you are long in all semiconductors.

 

FCX (Freeport) Very strong trade from trade idea posted entry $13.83. Price action now showing some over extension and trend exhaustion. Some consolidation is needed at these levels. I will be watching for a pull back to test previous support (this may never happen or take several months to develop)

CHK  (Chesapeake) Chart is attempting to defy fundamentals. Breakout forming over $4.00, this play is behind helped by natural gas rebound and energy sector rotation.

XLE (SPDR Sector energy) Called this rotation before major media outlets. We have been watching this sector since the start of December. XLE breaking long term down trend on the 5 year chart. Breakout and rotation into this sector is in full swing. Energy is looking to be well behind the rest of the market in terms of gains in the last 18 months. This sector may provide some value buying for strong swings or buy and holds. Potential for 50% returns in some names over the next 12 months here.

MRO (Marathon Oil) (update 12/21/17 incredible breakout here as well, closing above major resistance/pivots. $18 spot on deck.) No chance still long - (Update 12/11/17 - weak candle, still long) Long signal, target to test $15.75-$16.00 level.

SLB (Schlumberger LTD) For those of you unfamiliar with this name, it is a major player in the drilling space. This name is now flirting with the 200dEMA $68.28 and is also breaking its long term down trend. Setting up for a long trade. I will look to enter to follow sector momentum. Watching for a flag or wedge on the daily for entry.

Natural Gas (JAN 18 contract): (Update 1/1/18 called the bottom on this nearly perfect. Record setting cold across the country is driving price now. As of writing futures have gaped over the holiday weekend and are now trading above the $3 spot. (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.

SNAP (snapchat) After a long bullish run we are seeing some weakness here. Price had not tested the 200dEMA and is now trading below the 20dEMA. MACD bear cross, RSI mid line cross. My action line is $14.43, this a level I have traded off in the past and will look to short under that level.

Trend Watch

  • $IMGN (Update 12/21/17 Swing working well, trimmed size on 10% gain. stop adjusted to break even.) (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 Holding 200 shares at $7.40 here, trend continues. Risk is $1.00 +-.
  • $ONCS consolidation continues, watching for double bottom. Techincals are finally cooled off and are ready for another chance to rally.
  • JP - watching $18.20 for support to hold. Liking the technical and possibility for a rally.
  • VRX - No position here, will look to buy on support around $18 level.

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

 

Low float watchlist plays

  • TNDM Still holding 6k shares here, may get stopped out for loss in the next coming days, will let trade continue to play out.
  • EKSO price riding the 13dEMA here, techincals are showing short signals. Last level for entry on this is $1.89. watching for potential to retrace previous move.
  • SALT - Swing remains in play here, stop $7.15 target $8.00

 

BITCOIN/CRYPTO

Bitcoin showing some choppy price action over the weekend. Price however is holding above $12,000 level and consolidating. This should provide some continued action in the below names and other crypto related names. These are loosing a large portion of appeal they had and are no longer showing 100's% gainers but none the less there is some strong price action to trade from on these charts.

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

Fire watchlist for market day 1/2/18

  • INSY
  • GALT
  • CAPR
  • LBIX

 

Low Float/Small Cap momentum-

Use caution in the first few days of 2018 with momentum. Screen time for most traders has been reduced in the last two weeks as such expect price action to be very choppy and eratic.

I would not be surprised to see some kind of grinder that moves 100%+ tomorrow in an all day kind of move. Should one name pop up with strength on scanners I would expect retail to ride an easy wave.

Personally I am interested in therapeutic names some are listed above in the fire watch. I feel this space is due for a move.


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:

And so it begins...

The first trading day of 2018. I will do my best to relax and readjust my eyes, as my screen time has been reduced in the last two weeks. Additionally, I will be watching for what retail traders are doing coming into the new year.

My main goal for this first week is to not end the week Red. I will be treating Tomorrow much like I would a Monday morning. Meaning, I will not rush or over size positions. Mostly likely I will not trade at all. Watching swing positions and getting a feel for where mometum is at.

During last week there was some choppy trading as expected. Let's hope momentum resumes but I will not force any trades.

As you embark on this new year, strive to keep a trade journal. This is the best way to monitor your progress and make necessary adjustments to your trade plans.

Thank you to everyone and lets make this year a strong one for each and every member of our community!

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.