No Trades Tuesday! Trade the Best & Leave the Rest

 

 

All right guys, so … Let’s break down our midday market recap here. Overall, today’s no trade Tuesday. I just happen to not take any trades. I didn’t see anything for me that looked good. Now, I know that Mike did really well on AAP, which was something that we were watching, or he was closely watching, pre-market. It was really a good set up, because the way it popped up here, right into this level, and then faded pretty much right out of the gate.

It popped up for a moment, and then it faded. He was watching for a retest potentially of the gap entry, which was 95, and then the gap was all the way down to … What is it? I gotta zoom in a little bit closer to really see, but … Pretty big gap there down into the 80’s.

Right out of the gates it popped up. It didn’t quite get all the way to the gap, the entry the gap filled, but it came up into 93, and then rolled over right here. When you’re watching the stock kind of consolidating right around this 20 moving average, all morning long and then it fades off that level. That’s a good place for an entry. Got short there, and you can see this thing just really faded fast. I mean, it dropped from 92 down to 87 in four minutes.

Nice five point drop there. Really solid. And then, consolidating, and then he added more back at the 20 moving average, sideways for a little bit, and now dropping down further. So, good, really good trades on that. Obviously, higher priced you know, a little outside my wheelhouse, not what I typically trade, but really good for Mike, and for those of you guys who traded that with him.

The ones I was watching this morning, ZYNE, was on watch for possible continuation, a bottom bounce, looking for a break in yesterdays high. We had this pre-market consolidation, this consolidation yesterday. I didn’t see a good opportunity on this one. I felt the risk was too high, as it broke to the bottom of that trend line right here. Didn’t feel good on that one. No trades there. HMNY was our leading gapper.

I said this morning, I was like, “This ones gonna be really risky. I really don’t trust it.” Look at what’s happened to this stock the last time it did a big gap. Right here. Gapped up and boom, all the way down. What happened today? Gapped up, and then boom, all the way down.

So, you know, I’m glad that I avoided this one. History doesn’t always repeat itself perfectly, but in this case, it was pretty similar to what happened last time, and so I just stayed away and that was the right move. It just wasn’t easy to trade. I didn’t have shares available to borrow, so no short bias on it. No ability to trade to the short side. And so, no trades on it at all. It does seem right now that we’re in a market where having a short bias works fairly well, if you have the shares available to borrow. And that of course is the challenge.

HMNY, no trades on that one, even though it was our leading gapper. And I’ll just say that … I said this pre-market, that if we go back on this one and look at the last day that it had that big gap up, I just want to show you how nice the pre-market chart looked on that day. Let’s see. We gotta go back a little way. Just scroll back here. Du du du du.

Okay, so this was the pre-market chart on that first day. It looked great. It was really clean. I mean, it was nice, easy consolidation, no big deal, just right above the nine moving average. The bell rings, and it pops up, and then it goes from 480 all the way down to 373. It just … The bottom falls out. It totally drops. And so, after seeing that, I have been very cautious about wanting to trade it at all.

That was our leading gapper, which I knew to avoid. Once the bell rang and we had, you know, 15 minutes of trading, I knew pretty quickly that this wasn’t going to be a great day for me, because I wasn’t seeing anything to trade. AYNE didn’t play out. HMNY was no good. CETX hit the high day MOMO scanner at 932, but this one just didn’t have any volume and I had no interest in it, so no trades on that one. FSI, 1.99. Very light volume. No trades on that one. So, you know keep looking at the scan. EXTR, a little higher on the price side. Didn’t feel super good on that one. Not a clean trade. And then CRDS, at 2.65, so …

When CRDS hit at 2.65, I thought, well I know this has bankruptcy news, because that came out the other day, and so that makes me nervous about trading. I look and I see there’s 65,00 shares of volume. I look at the level two and there’s like 15 cent spread. I thought, “Well, I can’t trade this yet. I’ll just watch it.” It goes from 265 to 270, 280, 290, 308, 311, 327, and then back down to 285. So just, squeezed up, and then rolls over.

During that move there was a point where the ask was 311, and the bid was 275, which is a crazy big spread. I mean, 36 center or whatever. That’s a really big spread. We don’t usually see spreads that big, so … That was very unusual to see such a big spread. It made me feel like I’m not gonna be able to take this trade. I’m not gonna be able to trust it.

It ends up consolidating here around three, would some traders have bought it here for the break of three? Some would have. I said, “I just don’t trust it. I’m not feeling this one. I’m gonna steer clear.” That was the right move. This is just faded off that level.

I was looking at this, knowing that the 200 moving average was probably gonna be an issue at 350. We have two candles now that are looking very similar. That squeeze up out of nowhere, and then coming back down, and you know, and eventually just selling off. No trades on that one. The only opportunity on this one would have been, to jump in, fear of missing out. And then, you know, I guess in this case, it would have worked, depending on your entry, but … It’s not a good trade.

Next one was on the scanner, that popped up was, XPLR. XPLR pops up and I’m like, “This looks very similar.” All of a sudden it squeezes up from 280 to 325, and then down, and then back up to 332, all the way up to 338, and now it’s back at 285.

So, just out of nowhere it squeezes up and then it just sort of fades back down. Again, no shares available to borrow. No shorts on these ones. I just sort of watched from the side lines as it popped up, felt like I never had a good opportunity. This was never something that, you know, I’d be able to trade, and so, no trades on it. Just sat on the sidelines, and that was the right move.

I’m a little disappointed that we didn’t see good follow through today, that we didn’t see better opportunities, but it’s just, right now, what we’re going through. It’s August trading, and small caps are kind of just dead. I think that [John 00:08:02] mentioned he traded … I think he said he traded AAP maybe, and Coach, so he traded a couple of the higher priced stocks.

He trades the same strategy on small caps as I do, but he’s venturing into some of the larger caps, basically just to try to, you know, just to try to make some extra money, because if you just sit and wait on small caps, you might have weeks where you’re not having good trades or good opportunities.

And Ralph, to answer your question, I don’t have shares available to borrow, because I’m trading small caps. The small caps are the ones that are harder to borrow. The larger, higher price stocks usually have better borrows. This is one of these months where I’m kind of, I guess, paying my dues a little bit for having such a great spring, but yeah. Today’s no trades, and August so far, has been …

I mean, as of right now it’s actually my worst month of the year. Although, we still have two and a half weeks left, so I’m hoping to recover a little bit, before the end of the month, but … It’s definitely, you know, it’s weighing on me. There’s a lot of pressure that I put on myself to trade well, and so, when I’m having a bad couple weeks, or bad couple months, or whatever, bad month, or I’m not seeing good follow through, I definitely start to get a little frustrated as probably anyone would.

The important thing to remind ourselves is, that patience is key. Yesterday the loss that I took was, kind of, you know … It was a tech issue, where I lost my connection to the internet, took a 4,000 dollar loss. Not a lot I could have done to prevent that, I don’t think.

It’s just the luck of the draw, but for sure, it is not the best timing for that, because I’m already not having a very good month. Puts me down a little over five grand on the month. I was break even, or just slightly red before yesterday. I was really hoping that I’d be able to power in this week, next week, and the last week of the month, in these three weeks, get myself back up into the green, but I’m just in a grind right now.

What’s very interesting is that last summer, in three months, I made 96,000 dollars, in June, July, and August. This summer, that’s just not the case. Last 2016, in January, February, and March, I made 23,000 dollars. 23,000 dollars in January, February, and March. January, February, and March of this year, I made 139,000 dollars. It just goes to show that it’s not seasonal, there’s no rhyme, there’s no reason. At times, it’s just the ebb and flow of the market. We have hot streaks, and then we have cold streaks, and for small cap traders right now, we’re definitely going through a real lull in the market.

Your two options are to just sort of trade through it with smaller size, the best you can, and know that on the other side we will have good opportunities. It just is a matter of time. Or, you venture into other strategies, where you start to trade higher price stocks, or you start to swing trade into stuff like that.

That of course is the nice thing about having, you know, Mike, and myself, and Jeff all in the chat room with different strategies, but for me, since I’ve concentrated so much on one strategy for the last, you know, three, four years, or whatever it’s been, I’m not as … I’m not feeling as comfortable branching out of it.

Although, I did look at a couple of trades that I thought would be good, swing trades. I did hold one of ’em, and it ended up being a small loss. The other one … I got stopped out of with profits, so … 600 bucks. That one still looks fine, but I’m kind of looking for some swing trades, just to get, you know, get myself in the game a little bit, and try to generate some returns, even if they’re slower, you know, over the course of a couple of days. If that right now is the best I can do, that’s fine with me. But again, I have to find good quality setups.

One of the challenges is that the market for higher price stocks feels incredibly overpriced. Everything is so, so extended. It feels difficult to find, you know, really good trade opportunities on the higher priced stocks. And then, the lower priced stocks, well … You know we’re not seeing as much volatility, so even there it’s a little bit challenging. A couple of the ones that I was watching … of course I had TEVA on watch. I’ve been watching that for a few days, but feels like it’s just not ready to bounce. ENDP. This one is kind of interesting here, but similar. These ones just aren’t really bouncing. They’re kind of just consolidating at the lows, even GEMP is sort of consolidating at the lows.

In contrast to what we saw in ZYNE, which was on this day, where it squeezed up, like 35%. That was a fantastic bounce. Those other two, or three TEVA, GEMP, and [inaudible 00:13:37], are all sort of flat lining at the lows, so … I don’t know. Those ones aren’t quite ready, so, whatever. Not a lot of risk on them, particularly, but not bouncing either.

I’ll keep these scanners running, and see what I can find for some decent swing trade ideas. Whether or not I take them, is another question, but see what I can find. And for the most part, yeah, I’ve been looking at stocks that are either really extend for the downside, looking for a bounce back up, or you know, trying to find the good bull flag setup, but I haven’t seen a really good bull flag set up here in a few days.

The last one I saw, was last week, watching Facebook off the moving average here at 168, 169, which was good. But again, this is such an expensive stock. With my account having 55,00 dollars in it, I can’t really justify swing trading, more than probably 200 shares. I mean, even that’s a very big position. And with 200 shares, I mean, what’s the most I’m gonna make, like two points? 400 bucks? It’s really not even worth it. The options are maybe a better way to do it, but …

In any case, this is kind of where we’re at right now. Definitely going through a little bit of a grind, and hoping that we start to see some better opportunities, and more volatility on the other side of the summer, as we get into, you know, back to school and into the fall. We’ll see if that is the case. In the meantime, it’s really nice to see Mike doing so well, in keeping you guys trading the large caps, with some really good trade ideas.

Okay, so, that’s about it for today. Again, it’s a no trade Tuesday, but I’ll be back tomorrow. Hopefully we’ll see something solid that can jump on. Right now, I’m okay with reducing my daily goal from a thousand dollars, down to like 500. Reducing my share size a little bit, and just … if I can just get into the grind of daily consistent gains, that would be fine. I was doing a really good job with that in the first three weeks of July.

I mean, pretty consistently, a thousand dollars a day, 19,000 dollars a day. 1900 hundred dollars a day, and stuff like that. Hopefully we can get back into that grind here, of steady gains, and not just flat lining. All right? That’s the game plan for tomorrow, and kind of rest of the week, rest of the month. And yeah, hopefully we’ll see something good. Tomorrow morning when we’re looking at the gap scanners. All right, so that’s it. I’ll catch up with you guys a little bit later.

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Oh hey. I didn’t see you there. I was just working on the dream board for my next home run trade. Hopefully it comes soon. Until then, make sure you subscribe to get email alerts, anytime I go live, or upload new videos. Until then, happy surfing.