Second Day of 2018

1/3/18

Overall Market-

US stocks turned positive at session's half as the first trading day of the new year was underway, with oil prices holding close to two-year highs and a closely-watched gauge of US manufacturing activity surpassing expectations.

However, geopolitical risks stemming from North Korea and Iran are tempering gains in the S&P 500 and Dow Jones Industrial Average.

After last Friday's sudden sell-off, US investor appetite for risk improved after a rally in Asian equities was triggered by an unexpected improvement in a leading Chinese manufacturing index as well as overtures by North Korea to open dialogue with Seoul.

Keep a close eye for news on an expected ballistic missile test from North Korea. This event may provide an opportunity to scalp volatility. 

Until proven otherwise, I will continue to remain very bullish as price action and sentiment show strength.

VIX (Volitility) VIX back around 9.5 level, setting up for a nice volatility play off any North Korea news. Overall market volatility is low, this will lead to reduced trading opportunity in the short term but investors and swing traders should see a period of prolonged gains. 

NVDA (Nvidia corp)  I still believe in weakness in this sector, however institutional money may be making me a fool here. Only time will tell. Daily chart is currently trading in an ascending pattern will continue to watch. 

AMD (Advanced Micro Devices) I like this chart better than NVDA strictly because of price. The lower price is attractive to more retail traders. I am eating some of my words here but with yesterdays bullish candle, there is a chance this tests 200dEMA $11.64, and potential higher should we break that level bullish. Not chasing this, If we are in a breakout I will be presented with a clean setup to enter. Now is not the time at least for me. 

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) (update 1/3/18 - price action continues to show incredible strength, congratulation to all longs.) 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)(update 1/3/18 - technical here are ripe for a breakout, sector is very strong right now do not fight momentum, just ride the wave, I will most likely enter today for a swing trade.) 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) (Update 1/3/18 - beautiful breakout over the 200dEMA, very attractive now for a long term position, will attempt to buy a dip on this name) 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) (Update 1/3/18 - price reacting off previous action line, no flush. Watch for consolidation at this level for signal as to direction of trade.) 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 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 1/3/18 - 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 1/3/18 - 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 1/3/18 - 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 1/3/18 - 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 1/3/18 - 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 1/3/18 - 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 1/3/18 - 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

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 1/3/18

  • TEUM
  • HMNY
  • INSY
  • GALT
  • ONCS
  • LBIX

 

Low Float/Small Cap momentum-

Therapeutic names were the ticket yesterday. Strong grindy plays as expected. Keep in mind all of these plays have been continuation plays. There is very little in the way of gap and go type plays. 

Most gappers are selling off at the open. Look for strong daily setups into momentum. The best chance of success is follow through shown in daily setups. 

Keep therapeutic names on watch again, they are not yet exhausted. 


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:

A nice slow start to 2018 in the books for me.

Several swing positions are showing promise and the overall market continues with is incredible strength. Great opportunity is being presented in multiple areas of the market. 

Use this time to exercise patience. Remember that gains happen over time. Do your best to remember that growth of any kind takes time. Believe me, I understand it is hard to see everyone making huge gains. Especially if you personally are experiencing losses.  We have all been there, if someone says they haven't they are straight up lying to your face. 

Remember this journy we are on is about growth, and if you are currently in a losing cycle, it is okay and in all honesty it is a perfect representation as to where you are on this journey. It is ok to take smart managed losses. It is ok to feel like this is challenging. but it is NOT ok to gamble or hope for the best. Continue to trade with managed risk. There is a reason trading capital is called RISK capital, you must be prepared to lose before you can win!

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.