Short Week - Volatility potential

1/15/18

Overall Market-

Stocks extended their rally during Friday's trading session, driven by quarterly results from the banking sector and friendly economic data generating another triple-digit gain in the Dow Jones Industrial Average.

I continue to remain bullish on the overall market given price action. That said, we may get an actual pullback should pressure on a government shutdown continue to loom. As stated I personally feel the market is well overdue for at the least a consolidation period. The longer we continue this relentless charge, the higher potential for a dangerous correction becomes reality.

Once again, remain bullish until the market says otherwise, just be mindful of our overextension. In the even of some material news watch the market closely.

 

VIX (Volatility) High options action detected. Not surprising as some government news is giving strong cause for short-term hedging. Continue to watch this market "fear" indicator during the weeks trading.

 

NVDA (Nvidia corp)  My personal opinion on the semiconductor space remains unchanged. This chart is very choppy and is not clean to trade. Going out on a limb here and calling a top on this chart. Not going to short as there are no tradable signals but I will watch for weakness and a smart point to enter. I may end up a fool here but I can not justify the price/value here.

AMD (Advanced Micro Devices) Perhaps I am playing the fool here as well but I am bearish on this price action. The weekly chart shows a better picture for long-term action. $10 support is major on this chart, should we get under that level shorts will be in full control. Just watching for now.

SOXX (Semiconductor ETF long) bearish doji on the weekly chart. Price in this sector continues to stall and confirm resistance at $180+- level.

 

FCX (Freeport) Price stalling at $20 level here, a bearish cross on MACD, RSI crossover at overbought levels. Based on current ATR levels a pullback to the $20dEMA $18.58, may well be in the cards. Conversely should price break over the $20 level with strong momentum we may be looking at one final leg of this incredible move. Overall price action here is well overextended at the least we desperately need some consolidation to build a new base.

CHK  (Chesapeake) (update 1/15/18 - while I remain bearish on this name, conditions in the sector are too strong to short. Technicals have a potential for a strong bounce, the weekly chart shows at the very least some consolidation after a long downtrend. The 50 period EMA on the weekly chart will be a clue as to long-term price action) I am bearish on this name from a fundamental long-term outlook. Energy space is just too 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) and we are off to the races! The downtrend was broken with conviction, price well over $75 spot now. Expect this sector to continue with oil, copper, gold, silver and the overall market. Tailwind is in this sector. Remember to let your winners run!

MRO (Marathon Oil) weekly 200 period EMA $18.98 nearly tested! Weekly chart threatening to break out above the current channel. Squeeze may be on the table here. Watch for volume and price action over $19.00 for hints to next move.

SLB (Schlumberger LTD) (Update 1/15/18 ALL TARGETS REACHED! "trim and trail here" meaning trim position and trailing stop remaining shares. Set and forget this one. let it run.) (update 1/10/18 - continued strength, no reason to exit, the 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): use caution $3.22 level is a triple top. Price action is consolidating above $3 spot, this is a good sign we may break current resistance. Be mindful there is a supply glut of natty gas, chances are this can only go so high before getting smacked down by big money players.

SNAP (snapchat) NO CHANGE - (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 Friday's 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 NO CHANGE, let it run on final shares. (update 1/10/18 - major winner here, weekly now sitting at 200EMA, a potential for breakout. swing for subscribers still intact.)(Update 1/7/18 - 3 red candles on the daily, tomorrow will be a 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, technicals have room to run here, volume and potential squeeze on deck.)(update 12/10/17 most indicators here are bullish, RSI cross midline, 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 price consolidating above the 13dEMA, breakout potential remains!
  • JP - (Update 1/15/18 - ATR is getting very high here currrently $1.61, risk is upwards of $3+ on any swings based on 2x ATR, there is potential for day traders here, use pivot prices for entrys/exits.)(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 1/15/18 - price action heating up on RCON, continue to hold this positon in the challenege.) (Update 1/7/18 - gap up after and pre market, unfortunately being under 1k and not having I can not sell premarket.) (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 - Trade closed, strong profits and a great trade. (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 1/15/18

  • RCON
  • GALT
  • NETE
  • KBSF
  • ITUS

Low Float/Small Cap momentum-

Last week was fantastic for momentum. FORGET last week, we are on a new week and starting on a Tuesday, use caution and let the market find its legs before jumping on the momentum bandwagon. No reason to assume things will be the same as last week. I will be optimistic on any strong breakouts that are based on daily setups. 

Blockchain and therapeutic mentions were hot last week but VERY choppy, there is some heavy pump and dump going on in that space. Follow volume, do not over size and allow your position to work for you. We are seeing some strong movers but risk is higher on a lot of these breakout plays now as many are overextended.


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:

Being a new week and a Tuesday start, I will look to build my cushion for the week. I will be exercising caution considering the number of uncertain news headlines. All and all status quo remains, bulls are running amuck, bears are patiently waiting to step in. Make sure you are not caught in between as a greedy pig.

At the time of writing Emini futures remain stable and in range. This is a good sign as we have no gaps to contend with, should provide clean trading opportunity.

Avoid exposing yourself to extreme risk right now. There are plenty of people on social media claiming to make a fortune, do not compare yourself to their gains. Chances are they are fake or acting a fool with risk management. The goal for our team is sustainable long-term and risk managed gains. Yes, you can make a small fortune going YOLO on some setups but you can also go broke.

Remember no more than 1% to 3% risk per trade MAX, slippage can and will happen, do not let anyone trade make you rich or poor!

Stay hungry and humble team, let's 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 may 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.