Wednesday Gains Train

1/10/18

Overall Market-

Stocks continued to trade in positive territory despite an unexpected decline in job openings to a 6-month low of 5.879 million in November from a revised 5.925 million job openings in October, a negative for the potential for future wage growth. The number of individuals quitting their jobs also declined, underscoring a lack of confidence among employees to find better, or better paying jobs.

Market sentiment brightened following upbeat holiday sales from Target (TGT) and record sales from component stock Boeing (BA) before the start of what is expected to be another strong earnings season. The health care and financial sectors are also leading gainers.

This recent run has me a bit concerned that buying is really seeing levels of euphoria and mania. The SPY is trading above the weekly trade channel we have been in for the past few years and presents the question, why?

We are in need of a pull back to keep an eventual crash from coming. The spy has not had any sizable pull back since October of 2016. We are setting up for a scenario of incredible panic selling should anything tip the scales. 

In the meanwhile, just be aware that the market is over extended but not showing weakness. Continue to be a bull until proven otherwise.

VIX (Volitility) this market indicator has been tightening for weeks now, the tradeable range on the VIX has become very small. Something has to give here, we can not remain in a low volatility environment for much longer. Keep a close eye in the coming days and weeks. 

NVDA (Nvidia corp)  After a huge run it may be time for this to cool off again. New all time high here $225 may invite some short term sellers to join the party.

AMD (Advanced Micro Devices) 200dEMA $11.66, once again bears can start testing the resolve of bulls here, chart is very choppy and could quickly break down under that key price level.

SOXX (Semicondector ETF long) Sector failing to make a new high on last weeks incredible run, are we seeing a double top in the Semiconductor space? I am still bearish on this sector needs a pull back at the very least, more than likely the whole space is over priced from a value standpoint.

 

FCX (Freeport) Finally a pull back, price action stopping nearly right at the 13dEMA. Short term potential for bears to shake out some profits here. Looking for this to cool off before entering long.

CHK  (Chesapeake) I am bearish on this name from a fundimental long term outlook. Energy space is just to strong to short. No signals have been generated to short this. However, there is a potential for a breakout of the current down channel we are trading in above price $4.17 with volume could be a signal for a technical squeeze to the 200dEMA which currently sits at $4.47. Follow volume and price action on this one, no safe way to predict price action at current levels.

XLE (SPDR Sector energy) looking at the weekly chart, we are just above pivot resistance trend line. This sector has been in a down trend starting may of 15'. If we can hold above $75 level with conviction this may well be the start of a bull market in energy sector signaling a long health run for the foreseeable future. This sector is well behind the rest of the market as a whole. So long as oil shows strength here the possibility remains for continued strength. 

MRO (Marathon Oil) consolidating well around the $18 level, may not get my pull back here to re-enter. keep on watch.

SLB (Schlumberger LTD) (update 1/10/18 - continued strength, no reason to exit, target remains intact.) I am long on this name with a target on the weekly chart 200 period EMA $76.53

Natural Gas (JAN 18 contract): (Update 1/10/18 - price action bouncing around $3.00 spot, keep an eye for a short term directional play here.) NG bounced at $2.75 pivot support, gapping up at futures open. Closed all positions NG related on Thursdays inventory report. There is such a glut of NG in this country that it is hard to be bullish but I remain bullish, mostly due to extreme cold weather. Use caution with any bull theory on NG

SNAP (snapchat) (Update 1/10/18 - need $14 level to become resistance for a move lower, short is still active here.) Alerted a short on SNAP during Fridays session. Stop is a bit tight on this one. Looking to test lows in the long term, $13.00 in the near term.

Trend Watch

  • $IMGN (update 1/10/18 - major winner here, weekly now sitting at 200EMA, potential for breakout. swing for subscribers still intact.)(Update 1/7/18 - 3 red candles on the daily, tomorrow will be critical day for price action. Need a reversal bar or doji for strength.)(Update 1/3/18 - After nearly a month in this position we are finally seeing price action with great strength again, I believe in a target of $8.50 here)(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 (update 1/7/18 indicators heating up here, breakout potential on this name.) (update 1/3/18 - On watch for a continuation play, I unfortunately did not get in on this trade, congratulations to anyone who grabbed this great set up.) consolidation continues, watching for double bottom. Techincals are finally cooled off and are ready for another chance to rally.
  • JP - (Update 1/10/18 - Strength remains in this name, trend is grinding well. Be aware for sudden moves in either direction on this name.)(update 1/7/18 Price testing critical FIB level 38.2% $20.73, this could be the end of the bounce here, watch close for a breakdown or breakout from here.) (update 1/3/18 - breakout on volume and a strong bullish daily candle, on watch for continuation. Strong base formed at this level a rally to highs is possible.) watching $18.20 for support to hold. Liking the technical and possibility for a rally.
  • VRX - (update 1/10/18 - $24 level showing resistance, watch price action from here, we may need a pull back before a move higher.) (update 1/7/18 price up nearly 6 points from first mention on blog, strength remains, trend is beginning to show signs of exhaustion, price action my get choppy from here.)(update 1/3/18 - held 13dEMA perfectly, incredible strength in the current trend. I may not get my pull back on this one. Will watch for a set up to new highs.) No position here, will look to buy on support around $18 level.

Robinhood Challenge: (Update 1/7/18 - gap up after and pre market, unfortunately being under 1k and not having (Update 1/3/18 - If I am being honest I feel as though I may be miss managing this position. I have no reason to take this trade off the table as there is not enough profit or stop loss to justify, however the nature of this challenge is putting pressure on me to complete quickly. I am feeling a high opportunity cost on this trade. I rarely place myself under a time restriction for a trade, that is part of the reason for my success. I need to implement a system here to justify always taking profits perhaps I will look into always locking a 10% gain, I will update everyone with my thoughts as I develop.) $RCON 275 shares @ $1.21, higher risk swing trade.

 

Low float watchlist plays

  • TNDM (Update 1/10/18 - sold 1/2 position $3.15, stop breakeven on remaing shares. great trade here, now holding 3k shares.)(update 1/3/18 - A great recovery here, I was fully expecting to be stopped out for a loss here, price action continues to show sign of a run over $3.00, will let price action play out.)Still holding 6k shares here, may get stopped out for loss in the next coming days, will let trade continue to play out.
  • EKSO (update 1/10/18 - consolidation continues, on watch for entry long.) (update 1/7/18 - price holding at key level, potential consolidation and new base here. No position, ,only watching.) (update 1/3/18 - pin bar formed on daily, potential for reversal, volume was higher and selling pressure consumed by buyers.) 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 - (Update 1/10/18 - alert sent to reduce size here. $8 proving to be resistance, stop break-even on final 1/3 shares.) (Update 1/7/18 - first profit target hit here, holding 2/3 position. stop at break even, congratulations to swing subscribers.) (Update 1/3/18 - price action showing some curl action on the daily, with volume this one squeezes, potential for a move to $9 based on geometry but we will need a very strong move for that to take place.) Swing remains in play here, stop $7.15 target $8.00

 

BITCOIN/CRYPTO

(no change here)

Same old song and dance here, pick a ticker and hope for the best? Only kidding. With all seriousness, the below names have lost a lot of their initial traction in the retail space. They are becoming choppy.

However, do not discount anything related to blockchain, retail is still infatuated with bitcoin mania. Just remember this space is a bit played out. I prefer fresh tickers and new catalysts to really drive sustained momentum. 

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

Fire watchlist for market day 1/7/18

  • HMNY (bitcoin mention, major short squeeze potential here)
  • PIXY (momentum and swing alerted yesterday)
  • CAPR (speculative swing alerted yesterday)
  • DFFN (momentum alert yesterday, continuation potential today)
  • NETE
  • INPX

Low Float/Small Cap momentum-

We are on FIRE. Momentum is out of control in many names. Therapeutic tickers have been strong as anticipated. $PTIE was out of control.

Watch the above list for some serious firework potential today. As always manage risk above all else.


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:

Two weeks in to 2018 and the profits are flowing. After a short break in momentum over the holiday it appears that retail mania abounds. We continue to see massive moves in some low float names and the overall market continues to make all time highs without a second thought.

Several of our new students are doing well and it is a joy to see traders become profitable. They have done it through hard work and applying a systemic approach to their trading. 

Try to be selective, I know it is hard right now to control FOMO but we must. Compounded wins will beat a few homeruns in the long term. Keep your focus on growth and compounding. 

Avoid unnecessary risk no matter how tempting it may be. 

Stay hungry and humble team, lets go!

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.