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T3 Live’s 2020 Trader Poll: Where Do YOU Think the Market’s Going?
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Continue Reading -->VIX Explosion Confirmed: Here’s What’s Next
On November 29, Jeff Cooper said the VIX would explode, and it did: And just yesterday, Jeff initiated a position in IWM December $162 puts. He just locked in a 29% gain on half the position — in 1 day! He also went long TZA which is up 5%. Click here to get his next trade! ******************** My December 3 date hit and the market broke (1 day early). I have been looking for a turn in the markets in early December because of 3 factors,. 1) 180 days/degrees from the Dec 3, 2018 pivot was the big June 3, 2019 low. That low (2729) perpetuated a 425 point jagged march to last Wednesday’s all-time high. Another 180 days/degrees from the June 3 low is December 3. 2) At the same time last in last Wednesday’s report we wrote: “The SPX struck a magic Gann level yesterday. This is 56 squared, which is 3136. Allow me to explain. You see, W.D. Gann was the first to recognize that panics often begin from around the 56th day from an important high or low. Two of the biggest examples are the 1929 crash which occurred around 56 days from high. Ditto the 1987 crash. The same has been true of blow-off tops culminating around 56 days from a pivot low.A good example is the final run into the October 11, 2007 top that started from an August 16 pivot low.” We went on to give several other examples. 3) Additionally, we flagged the remarkable synchronicity last Wednesday was the 56th calendar day from the October 3, 2019 low. In league with this time and price synergy, a VIX Volatility Explosion signal was on the table and we did a video walking through the setup. On Monday, the Volatility Index, the VIX, surged 21% intraday. On a closing basis. it was the largest single day percentage rise in over three months. Breadth closed with 788 advancers on the NYSE versus 2122 decliners. Monday morning’s report showed the setup of what can happen when an item, in this case the DJIA, is stretched above its 200 day moving average. One thing we know about price is that it is mean reverting. On Monday, that mean reversion hit with authority. Growth glamours hit an air pocket. My 4 Horsemen stumbled: MDB tanked 11 COUP shed 5 points OKTA sank 8 TTD plunged 36 points A daily SPX below shows the nasty Trap Door setup: 1) A high tick close on Wednesday 2) Up open overnight on the futes despite Trump signing bill in support of Hong Kong protestors 3) Small green on Monday’s open 4) Plug gets pulled to start the new month So where can the SPX go? While the DJIA closed below its 20 day moving average on Monday, signaling the minimum potential for a 1000 point/one month decline, the SPX tested its 20 day yesterday. That 3107 level where the 20 day resides is set to be snapped on a gap this morning. 90 degrees down from the 3154 high is 3098. 180 degrees down is 3042 — near the 50 day m.a. 270 degrees down is 2987 — near a 50% retrace of the rally. 360 degrees down is 2933 — near the 200 day m.a. With 2993 being 90 degrees square the October 3 low, the implication is that the path of least resistance is toward the 2933 to 3000 region, as long as we get sustained follow through below the 20 day moving average. Green arrow is October 3. Purple arrow is 993 for 2993 (in the outer rung) Notice the square out with the end of the year where the upthrust occurred in 2018. Just when the vast majority of market participants were convinced of a continued run up into year end, it looks like Mr. Market staged an ambush. Just when it looked like a mirror image of the decline from October 3, 2018 indicated an advance through year end, and that a repeat of 2018’s Christmas Massacre was off the table, unrealized gains are vulnerable. Yesterday is a good example of air pockets resulting from profit taking when buyers have their wallets on their hip on the first day down. Conclusion. Even in a bullish pullback, a 180 degree correction can play out. This is the 3042 region, which ties to the breakout point. Even in a bull market, the normal expectation is for the breakout point to be backtested. However, breakage below 3140ish suggests a larger top is in. Moreover, the action we are seeing this week is indicative that the back of the runaway move is broken, regardless of whether the recent runaway train turns into a sleigh ride from hell or not. Position in IWM puts, UVXY, UVXY calls
Continue Reading -->Is Today the Mother of All Fades?
Is Friday’s big move just a big old fade? Jeff Cooper answers this hard question: In this video, you’ll learn: The importance of the 3-day chart Why the 3-day chart is so helpful for determining the trend 2 things that could signal a reversal The importance of anniversaries with 2002 and 2007 Why the market may be at an important inflection point
Continue Reading -->Scott Redler: How NIO Became the Chosen One
In my 2019 Market Outlook Report, I named electric car maker Nio (NIO) — a.k.a. the Tesla (TSLA) of China — one of my top plays for 2019. When it comes to making trading calls, it’s easy to have 20/20 hindsight, so let’s go back to what I said word for word on page 39 of the report:Now, we almost did get that break of $6 right after I published the report. Nio touched a low of $6 on the dot on January 2 — kissing the danger zone down to the penny!But then it took off and finally broke over the 8/21/50 day in ate January, even getting to the $8 level from the 2019 Report:Let’s fast forward a little bit now. It closed strong last Friday, and on Saturday morning, I Tweeted that “it seems like $9.50++ happens in time.”Then on Monday when the stock gapped up on the 60 Minutes Show about China’s electric car industry:That morning, I told Redler All-Access readers “I trimmed some above $9.30” to lock in a nice gain. On Tuesday, there was just a tiny retracement toward Monday’s low before the stock shot up again to hit a new all-time high at $10.64 — passing that $9.50 mark with authority. Wow!Yesterday at 11:52, when NIO was around $10.54, I tweeted on our Private feed that I was smaller in it, but would stay with some to track it:Then this morning, I told Redler All-Access readers “I trimmed some NIO above $10 and I’ll buy dips selectively.” And here’s the chart I posted to the Redler All-Access Private Twitter, saying “now it needs some time to consolidate” though “I do not think yesterday’s high will be the 2019 high.” I’ll be tracking NIO closely to see when I can add to it for that all-time high push (if it happens, of course) You can follow along as I share my plans to handle NIO in Redler All-Access — plus dozens of other hot names. Many people think I only trade big cap tech… but check out my disclosure to see what I’ve been working with lately: Positions Disclosure: As of 2/27/2019 at 10:25 a.m. ET, Scott J. Redler was long GERN, ZYNE, CRBP, CGC, BAC, BAC, NIO, GS, PBI calls, TLRY calls; wasshort SPY
Continue Reading -->Scott Redler’s Apple Pie: When Low Expectations Get Surpassed
One of the big market stories earlier in the year was Apple’s (AAPL) big guide down on January 2. That led to a big mystery – whether expectations were low enough ahead of the January 29 earnings print. I took calls into the report because I thought the stock could clear $159 if it was just in-line. With calls, I had defined risk. I don’t take stock into earnings because of the open-ended risk.AAPL was deemed ‘good enough’ and the stock gapped up big on 1/30. The 1/30 low of $160.23 became the spot to trade against for new longs. That level needed to hold to keep the move intact.AAPL then held higher and formed a bull flag over $169, which was another opportunity to add:With the big up move, I’ve been trimming stock and I turned my calls into a spread. This is when we manage the trade with a Tier system. Looking forward, there’s a chance the stock can work to $183ish in time. But as always, we’ll take it day by day in Redler All-Access, as we’re doing with dozens of names each day. (sign-up info below)Positions Disclosure: as of 2/5/19 at 10:14 a.m. ET, Scott J. Redler was long NIO, CRBP, FB, TWTR, NBEV, IQ, BAC, ETSY, TWTR calls, SPY puts, AAPL calls; is short SPY, AAPL calls
Continue Reading -->Scott Redler: Anatomy of the Great Post-Christmas Rally
The big rally off the 12/26/2018 low at 2346 wasn’t easy to predict. But, understanding some basic trading concepts could have helped you catch some of the move. And they help you understand why I held multiple longs through this period (with some short hedges here and there for protection). Or at least, traders could have stood aside instead of stubbornly shorting. So let’s break down the movie step-by-step. On 12/26, the SPX broke below the 12/24 low at 2351. It hit 2346 and reclaimed 2351 for a Red Dog Reversal. The index then closed at the highs of the day.But one day’s never enough. On 12/27, the SPX held the 50% retracement, which confirmed the Red Dog Reversal.Then on Friday 1/4, the index broke above the 8 day with authority when Powell got ‘flexible.’The next trading day was 1/7, a Monday. We had another up day, showing more commitment to the move.The index then held above the 8/21 day before breaking over a bull flag. That led to a nice rally to the 2670 high.So what’s next? On Friday, I told CNBC the following: “At this point, if you haven’t bought the market this year, it’s not the most prudent thing to do to chase it today. At the same time, being short is frustrating.” And today’s down day (1/22) is the first time in a while that a shallow dip hasn’t been bought. I’ve already taken down risk. Now, the key level to watch is Friday’s 2647 low. A close below that could mean a test of 2590-2625. Positions Disclosure: as of 1/22/2019 at 12:14 p.m. ET, Scott J. Redler was long CRBP, TWTR, SPY puts, AMRN calls; was short SPY
Continue Reading -->Scott Redler: Reality Bites Apple, and What Could Happen Next
Yesterday after the close, Apple (APPL) gave a sales warning to give traders a big scare on the second day of trading in the New Year. The headlines are what you might expect:But how much of a surprise is this really? Dozens of analysts have been cutting numbers, suppliers have been warning of weak demand, and of course, the stock’s way off the $233.47 October high. Now, I’ve been called an Apple (AAPL) permabull for years, but this is what I said in my 2019 Market Outlook Report:This was the first time in years I didn’t list Apple as a buy right off the bat. As I wrote, “there’s still serious news risk with Apple, especially given that the trade war with China is unresolved.” And the trade war did just take a major toll on Apple earnings, and the stock is deep in the hole. As I write this, Apple is around $144, so it’s in a much more interesting spot, and it’s time for some fresh analysis. It’s below the $146.59 December low. To relieve pressure — and get ‘the elevator’ going back up, it has to reclaim that level. If it stays below $146.59, next support is in the $140.40 area. Here’s my updated chart for this morning:Now we’ll see if it can make a low in the first 5-15-30-60 minutes to try to fill some of the gap. Or, does it grind down all day? Pay close attention to which scenario plays out. Since we’re on the topic of tech, let’s check out a QQQ chart too.I’m watching $150-$150.88 today. If that holds, it shows that traders aren’t extrapolating Apple to the rest of tech. If it fails… then watch out! For more of my analysis for 2019 and my top picks (including my short ideas for this year), click right here to check out the 2019 Market Outlook Report.Positions Disclosure: As of January 3, 2019 at 9:32 a.m.. ET, Scott J. Redler is long GE, FB, SPY, TWTR, IWM, BAC
Continue Reading -->How to Save 50% on Our Black Friday Sale
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Continue Reading -->Scott Redler: Multiple Scenario Analysis Ahead of the Mid-Terms
We’re ahead of the biggest political event since the 2018 Presidential election. It seems like a Democrat House and Republican Senate would be equities friendly. And as long as we hold the SPX 2700 area, I’ll be positioned for it to clear 2756 for a move back towards 2816-2840. But if that rally happens, don’t rush to buy into bull hype too quickly. Seasonality and buybacks may be on the bulls’ side, but there’s a bigger pattern to worry about. (more on this below) If the Democrats take the House and Senate, volatility probably spikes. A close of below 2700 would probably mean a retest of 2603. As you can see on the micro chart below, an inverse head & shoulders may be setting up. The election results may dictate if the pattern resolves up, or if the right shoulder gets broken for that 2603 retest.Now let’s look at a more intermediate-term chart. If 2603 gets lost, traders will start worrying about a trip to 2560 – 2580, and a rougher road to end 2018 and start 2019. Now let’s take a look at the big macro chart. This is why I said we can’t too easily buy into a giant year-end rally. A rally from here could complete the right shoulder into 2800-2840, making 2600ish the neckline. If this pattern triggers to the downside and the neckline breaks, the measured move points to 2300 — which could be a 2019 storyPositions Disclosure: As of November 6, 2018 at 10:33 a.m. ET, Scott J. Redler is long FB, AAPL, SPY, IWM
Continue Reading -->Scott Redler: Using Multiple Scenarios to Find a Path Forward
We came in facing some ugly headlines this morning:At times like this, I try to avoid marrying an opinion. I let the price action guide me, because price is how we get paid. I came in today focused on SPX 2710 (the October low prior to today), telling CNBC’s Patty Domm “it could be bullish if it breaks below and then reclaims it and has a strong finish. Early this morning, I showed in a chart how holding above 2710 could mean the market puts in a 2X/W bottom:And I laid out three equivalent scenarios in SPY to Redler All-Access readers before the open: A) $270.36 is the 10/11 low. We hold above it and try and rally.B) We get and stay below $270.36 to probe to the downside with another leg lower. $268.49 is below, then $265.15.C) We get below $270.36 and then reclaim it for a Red Dog Reversal-type bounce attempt. Then, I’m free to react to the scenario that plays out, instead of locking myself into an opinion beforehand. Now let’s go to the chart to see what actually happened:As you can see on the chart, the SPX plunged at the open and made a new October low of 2691.43. But then it rebounded back above 2710 to 2746. (as of the afternoon)SPY broke below $270.36 and reclaimed it, and it’s now over $274. Let this be a lesson: don’t get locked into an opinion to the point where you can’t react to what’s happening. Keep multiple possible scenarios on your radar so you can grab opportunities as they come. Positions Disclosure: As of October 23, 2018 at 2:46 p.m. ET, Scott J. Redler is long SPY, CRBP, TWTR calls, FB calls, CAT calls, GWPH Calls
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