Final Sessions January 2018

1-29-18

Overall Market-

Record setting session during Fridays session. Fear of Missing out is now be blasted all over media outlets as money continues to pour into the markets. Indicators show no weakness and euphoria persists.

Many investors are very concerned that the stock market has gone up in a straight line, valuations are stretched and technically the market is very overbought. For reference the SPY daily chart currently has the RSI (Relative Strength Index) at a scary 87!!! This reading is an extreme overbought level. We are in dire NEED of a correction. 

My personal fear is when the selling starts, the algorithms that spot and sell weakness will "flash crash" the markets. 

Fanaticism aside, trying to fight the flow of this bull market is not only foolish but down right wrong. There will come a time for bears to rule the day, for now continue to remain bullish. Trend continues to be our dangerous friend here. Be mindful of rise in volatility, (see below)

 

VIX (Volatility) smart money is now placing massive bets against the market, not out right but through volatility. Overall markets continue to rip higher and this fear index is now quietly perking up. As stated before, this indicator is a good idea of smart money placing a bet on the marketing making a large move in the near future. VIX above $12 level at time of writing. (nearly 20% higher then just one month ago) 

NVDA (Nvidia corp) Congraulations to any buyers of the last dip, I was wrong on all accounts here. That said I can not justify an entry at current price levels. Techincals are well overbought and overextended. 

AMD (Advanced Micro Devices) Price upgrade released and pre market appears to be printing $13+ price. Similar to NVDA here for price action. 

SOXX (Semiconductor ETF long) Running hard with the market Friday, reversing some weakness showing last week. Sector remains strong.

 

XLE (SPDR Sector energy)Sector looks to be setting up for a pull back. Should oil reject current price levels, expect the sector to follow.

FCX (Freeport) Nice earnings but price remains stalled below $20.00. Price indicators showing a pull back, I am a buyer on a pull back to the 50dEMA $17.75

CHK  (Chesapeake) conflicting signals forming here after last weeks weakness. Remaining long on a starter position. Will continue to access as price develops. Bears are gaining some conviction as price fails to close above $4.00

MRO (Marathon Oil) Price upgrade has not helped move this higher, looks like a pull back will be needed before buyers step in. I will be looking for a pullback similar to FCX here, 50dEMA $16.90

SLB (Schlumberger LTD) Indicator showing a bearish breakout on MACD as we exit RSI oversold levels. This supports a pull back broad across most energy sector stocks we are following. Will look for a place to add, assuming I am not stopped out on final shares. 

Natural Gas (FEB 18 contract): Contract roll over and a gap down. Bulls seem to have pushed this one too far. Expect this gap to close before heading lower, will look for an oppertunity to go short as I remain bearish on current price action. 

 

SNAP (snapchat) (Update 1/29/18 I remain bearish long term on snap, short term could go either way here, no real conviction from bears or bulls.) (Update, twitter announces "storys" as well, see if this moves price.) Short position on this name remains active on final 1/3 position. I remain bearish on this name in the long term. Should price action close or gain strength above $14.50 bulls will have control again. Stop is in place on final shares at $14.80

 

Swing Positions (Details are intentionally vague, in respect of paying swing subscribers)

  • $IMGN final shares running, great entry from $6.00 price
  • $SNAP Short (in profit, final shares stop is just above break even.)
  • $DSW Long (breakout setup over current levels)
  • $MBOT Long (speculative play, strong entry and managed risk, let it trade)
  • $CYCC Long (speculative play, good volume) 
  • CHK long (sector and dividend)

Robinhood Challenge: Positions on CYCC  & MBOT

 

Low float watchlist plays

  • TNDM (Update 1/10/18 - sold 1/2 position $3.15, stop break-even on remaining shares. great trade here, now holding 3k shares.)
  • PIXY (update, pulling back to 50dema, on watch) this ticker was alerted on the swing service last week for an entry at $3.30, order was not filled. Price is now trading and grinding well. Keep on watch for a squeeze. Pull back opportunity on yesterdays price action.
  • VTGN (update, beautiful call here, great move, watch for continuation) on watch for a potential squeeze as we curl up to test 200dEMA.
  • GALT (update, holding 13dEMA well) forming a flag on daily in this consolidation, on watch for breakout.
  • DRNA watching for pullback entry.
  • REXX potential bottom, on watch for trend reversal.

 

BITCOIN/CRYPTO

Blockchain frenzy has died down in the past week or so. Former names can not be traded with more traditional indicatiors as irrational buying cools off, names to keep on long term watch $GROW, $TEUM, $SRAX, $RIOT, $MARA, $DPW, $XNET

 

Fire watchlist for market day 1/29/18

  • DPW (pre-market mover)
  • TWTR (continuation)
  • CAPR (continuation)
  • TVIX (leveraged volatility)
  • CDTI (potential set up for long)

Low Float/Small Cap momentum-

We are nearing the end of the month, I would normally anticpate a slow in momentum as traders look to protect profits from the first month of the new trading year. Remember for those that trade full time for a living the start and end of each month are a very big deal for psychological reasons. This is particularly true at the end or start of a year.


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:

Let the market settle in. Size small and get a feel for market sentiment. We may see some kind of pull back after Fridays remarkable run. 

Do you best to control emotion, start the week strong and finish the month strong. 

Continue to take advantage of this extended period of prosperity but do not get overly cocky or greedy. 

Thank you again, lets go team! 

 

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.