Derrick Talks to The Simcast
Derrick recently visited the team at The Simcast to talk about his strategies and mentorship style. He also gives listeners an inside look at what it’s like to start at a prop desk, plus how his background prepared him to become a trader. Check out a recording of the conversation below! Derrick and John will discuss: How the COVID-19 pandemic changed his trading career His first foray into trading as a kid What happened when he graduated college in the middle of the 2008/2009 crisis How he transitioned from sales trading to prop trading The trading lessons he’s learned from kickboxing
Continue Reading -->Meet Derrick Oldensmith
Derrick Oldensmith is a pro trader and head of T3 Trading Group’s trading desk. And in this in-depth interview on the TIB podcast, you can get to know him. Listen in and learn: What working at 7-11 taught Derrick about money and life How he became interested in the stock market Why he left his sales trader job to join T3 What Derrick loves about trading The lessons he learned from the 2008 financial crisis The hard realization he made when he joined T3 Why making money is a pure numbers game Why money management rules are critical to success This is a fascinating look at the ups and downs of professional trading, so jump in and listen. P.S. Give the video a like and comment to help support the TIB podcast!
Continue Reading -->The Selloff Shock
The market had a selloff last week, which not even Sami saw coming initially. What finally tipped him off? And how should you play the market this week based on your sentiment? In this video, Sami explains: – What he thinks will happen in QQQ – How CSCO is faring 22 years after the top of the tech bubble – Which name has carried over from last week – How market activity would affect his ideas for the week – The open position that still looks good to short
Continue Reading -->Traders Turn on Bitcoin
What’s the big takeaway in this week’s sentiment survey? Traders have turned in Bitcoin! So let’s jump in and see what’s going on. SPX Bulls Keep Backing Off January tends to be a good month for stocks, but traders have become much much less bullish over the past two weeks, thanks to the selloff. Bitcoin Sentiment Collapses Just 37% of traders are bullish on Bitcoin — the lowest level we have ever seen since we launched this survey in mid-October. Given how hard Bitcoin has been dropping, this is no surprise – though this week-over-week drop is staggering. Apple Bears Come Out to Play Apple (AAPL) has been caught up in the growth stock meltdown, and bullishness fell for the second week in a row. Tesla Bulls Disappear Tesla (TSLA) bullishness dropped big from last week as a result of the growth stock meltdown. Gold Bullishness Slips Gold sentiment tends to be all over the place from week to week. And this week, there was a slight drop from 72% to 66%. Oil Sentiment Flattish Oil prices have been on the rise since early December, and that’s certainly had a big impact on oil sentiment.
Continue Reading -->Scott Redler’s Dog Bytes: Are F.A.A.N.G. Stocks Worth It?
SPX did a false breakout around the 4730-4740 area and now it looks below 4660 with the futures -30. Powell gets confirmed Tuesday, CPI is Wednesday, and banks start reporting earnings on Friday. Most active traders are in a Tactical Approach because it’s hard to find special names to sit in as swing longs.F.A.N.G. stocks have very specific tactical action. AAPL lost momentum as it broke the $179 pivot to get me out. It looks below $171. See if it stays below that, or reclaims it to relieve pressure. $167.45 is key support below. MSFT was sold to start 2022 as it broke the 8/21 day. It has been for sale since. $310.09 is Friday’s low. See if it holds or stays below that. The next spot is $305.50ish. FB is trying to re-build, but it’s still very tricky. It needs to hold the $322 area. See if it stays below or reclaims Friday’s low of $328.88. AMZN’s false move around $3414 in AMZN led to more weakness and it hit a low of $3238. It’s a tough name as it works lower. $3175 is the next support spot, but it looks like $2881 can happen over time if tech remains for sale. It’s hard to press short or buy. $3238 is key – does it stay below or reclaim that? GOOGL lost special status as it broke the $2875 pivot area to see $2715 Friday. Watch that pivot today, but looks like the 200 day down near $2600 is in the cards.Positions Disclosure as of 1/3/2022 at 9:17 a.m. ET
Continue Reading -->$3 Trillion Market Cap for Apple – Do Traders Care?
What’s the big takeaway in this week’s sentiment survey? Traders are a little less excited about Apple (AAPL)… right when the company reached the $3 trillion market cap. SPX Bulls Back Off January tends to be a good month for stocks, but bullish sentiment backed off a bit from last week. Bitcoin Sentiment Edges Lower Bitcoin continues to trend lower after the September to November explosion, so it’s no surprise to see sentiment edging down. Apple Bulls Settle Down Apple (AAPL) sentiment was also down from last week, though that’s too bad. the stock is ripping to kick of 2021, becoming the first company to hit a $3 trillion market cap. Tesla Still Liked Tesla (TSLA) sentiment is basically flat with last week, and that’s good – the stock is screaming higher after the company reported strong Q4 shipment numbers. Gold Bullishness Jumps Gold sentiment tends to be all over the place from week to week. And this week, there was a big jump from 56% to 72%. Oil Sentiment Flattish Oil prices have rallied well off the December lows, but traders are not particularly excited about oil.
Continue Reading -->What Is the Best Month for Stocks?
What Is the Best Month for Stocks?April is the best month of the year for the stock market, based on S&P 500 data since 1980. The S&P 500 rises 2.0% in April on average, higher than any month. The S&P 500 has also been up in 31 of the 42 last Aprils, or 74% of the time. That is the highest percentage of all months. Wilshire 5000 data also supports this notion. S&P 500 Returns By Month Since 1980 Month of the YearAverage SPX Return % Positive MonthsJanuary 1.0% 60% February 0.2% 62% March 0.8% 62% April 2.0% 74% May 0.9% 69% June 0.3% 62% July 1.0% 52% August 0.2% 60% September -0.7% 48% October 1.2% 64% November 1.8% 71% December 1.3% 73% Data Source: Investing.com April also has another unique distinction – the smallest maximum loss. In April 2002, the S&P 500 fell -6.1%, so the worst April was better than the worst of all other months. And What Is the Worst Month for Stocks?September is the worst month for stocks, with a -0.7% average decline since 1980. That makes September the only month of the year that is negative on average. The S&P 500 has risen in just 20 of the last 42 Septembers, so it was up only 48% of the time. Again, that is the worst performance among all months.Those are the simple answers. Now let’s complicate things.The Challenge With Monthly Return DataAnalyzing monthly stock market returns may seem like a simple Excel exercise. However, it is fraught with challenges, like deciding how far to go back, especially since index composition changes so much over time. There’s also the question of whether this data is even valuable. A monthly return is simply the percentage change between one month’s closing price and the next. Are you making buys and sells exactly on the close of each month, with no activity in between?There are plenty of other more important factors affecting your returns, including:Whether you are long or shortYour mix of asset classes like stocks, bonds, crypto currencies, and other assetsThe individual stocks, ETFs, and cryptos you ownThe overall market environmentYour holding timeWhen you choose to buy or sellTaxes and trading commissionsNonetheless, let’s take a deep dive and see what we can learn from average monthly stock market return data.The Best and Worst Months for the Nasdaq Composite, Wilshire 5000, and Russell 2000.The biggest problem when asking “what is the best month for stocks?” is that you need to ask a second question: “which stocks are you talking about?”So to determine whether April is really the best month for stocks, we looked at three other major indices: the Wilshire 5000, Nasdaq Composite, and Russell 2000.Next, let’s look at the Wilshire 5000, the broadest index of US companies.The Wilshire’s, best month is April with an average return of +1.9%, and it’s worst month is September.The Nasdaq’s the best month is actually January with an average +2.3% return, though the worst month is September, just like the S&P and Wilshire.For the Russell 2000, the best month is December, with an average return of +2.6%. And the worst is August with an average return of -0.3%.You can see all the numbers in this table. The best months are outlined in green with the worst months in red. Average Monthly Returns By Index Month of the YearSPX Wilshire 5000 Nasdaq Composite Russell 2000January 1.0% 1.2% 2.3% 0.7% February 0.2% 0.4% 0.6% 1.2% March 0.8% 0.6% 0.4% 0.8% April 2.0% 1.9% 1.9% 1.7% May 0.9% 1.0% 1.4% 1.2% June 0.3% 0.4% 1.0% 0.7% July 1.0% 0.8% 0.7% -0.2% August 0.2% 0.3% 0.6% -0.3% September -0.7% -0.7% -0.6% -0.1% October 1.2% 1.0% 1.2% 0.2% November 1.8% 1.8% 2.2% 2.1% December 1.3% 1.4% 1.6% 2.6% Data Sources: Investing.com, Yahoo Finance! Please Note: our Russell 2000 data only goes back to 1988, while our S&P 500, Wilshire 5000, and Nasdaq numbers go back to 1980. Still, we believe this is more than enough data to support the idea that April is the best month for stocks. Is November the Best Month for Stocks?Many investors argue that November is the best month for stocks. But the Wilshire 5000 is the broadest measure of the US market, and it points to April as being the strongest month. But arguing over “best” may be silly because the data suggests that different types of stocks do better at different times of year. And we’re not talking about huge differences anyway.Why Not Focus on the Median?If we go by median monthly returns, November actually becomes the best month for stocks. But average returns make more sense because investing returns are heavily impacted by statistical outliers, which would be excluded when using the median.Now let’s go through some of the more interesting individual findings.October Stock Market Returns – The Weird Thing We NoticedThe S&P 500 was positive in 27 of the last 42 Octobers, with an average return of +1.6%.The two worst months for the S&P 500 since 1980 were:-21.8% in October 1987, when we had the Black Monday crash-16.9% in October 2008 during the housing meltdownExcluding these months, the S&P 500 has been up on average of 2.2% each October. So outside of generational disasters, October is generally an outstanding month. S&P 500 October Returns Since 1980 All OctobersOctobers Minus the 2 Outliers+1.6% +2.2% Data Source: Investing.com And that brings us to another point regarding monthly returns. There is a great deal of chance involved, and one or two generational outliers can dramatically impact the numbers. Does One Month Mean Anything for the Next?The stock market on average returns +0.84% per month.After an up month, the market returns an average of +0.86%.And after a down month, the market is up an average of +0.82%.So one month doesn’t seem to mean much for the next, with one exception that we found:What About the January Effect?December may have a small impact on January.After positive Decembers in the S&P 500, January has been up 74% of the time with an average return of +1.2%.That’s a slight increase from the overall January average
Continue Reading -->Riding the Rollercoaster into 2022
Sami was bearish around 2 weeks ago when the market looked like it could break the weekly trend. But now, after last week’s bullish move, it’s starting to look a little lower again, although it could be moving back up soon. In this video, Sami explains: – What he likes so much about CYH – His wish for INVZ – The two setups that can be found in PIRS – What SGRY reminds him of – Where he’s placing a target on TRHC
Continue Reading -->Scott Redler’s Dog Bytes: Trading F.A.A.N.G in 2022
The first level to hold is SPX 4786 then we’ll see if there is strength to clear 4808. Be on alert because 2021 winners may get sold now that taxes are pushed off until 2023. And beaten down names can get a lift because tax loss selling is over. Support for the week is 4765ish. F.A.N.G. stocks have very specific tactical action. I’m still looking to trade them to net money. AAPL can be a good stock for clues on tech. I’m still long from before my trip. We’ll see if it can get and stay above $179.23 or of profit takers come in. $177.26 is the 8 day and pivot support from last week to adjust around. MSFT was a strong leader last year. We’ll see if the gap up holds or fades. Key active support pivot is $335.85. To get better, it needs to get and stay above $339.36. FB gave us a move from $335 ish to $350+ and then came in pretty hard. I still have half my call spread on. I’ll give it some time. We’ll see if opening strength holds, or if they sell it. Watch $336.27 as key support for the day. GOOGL was choppy last year but made a few all-time highs to help lead. It closed on the lows Friday and it is up today. We’ll see how it reacts in the first 5-15-30 minutes for clues. $2897 is Friday’s low to watch. AMZN lagged for most of last year in a big tricky range with limited opportunities. I positioned into two call spreads because it might wake up. Today, it’s up $18. See if new flows have power to keep it up, or if it goes red. If that happens, see how it handles the $3331 pivot low from Friday.Positions Disclosure as of 1/3/2022 at 9:17 a.m. ET
Continue Reading -->Do Traders Believe in Miracles? YES!
What’s the big takeaway in this week’s sentiment survey? Traders are more bullish pretty much across the board. In this week’s survey, bullishness grew on all of the assets we track aside from gold. Now let’s dig in: SPX Bullishness Shoots Higher Last week, there were worries the Santa Claus rally would not come through, thanks to the rise of the Omicron Covid-19 variant. But, bullish sentiment skyrocketed to 76% this week after the S&P 500 rose Tuesday through Thursday of last week. Bitcoin Sentiment Up Bitcoin bullishness was hovering around the 55% mark for weeks but is up to 67% this week. Apple iLove Is Back Last week, just 49% of traders were bullish on Apple (AAPL), an all-time low in our survey. However, with Apple shooting up through the end of last week, bullishness jumped to 74%. People Like Tesla Again Tesla (TSLA) was down in the dumps thanks to Elon Musk’s stock sales… but it appears the stock’s rebound is pleasing traders, with bullishness rising to 75% this week. Gold Bullishness Drops Once again, traders failed to stay attracted to gold, with bullishness dropping to 56% this week from a record high of 78% last week. Oil Bullishness Slips Oil prices were up last week, which boosted oil bullishness modestly over last week.Save 25% With Our Customer Appreciation SaleReady to make more money trading WHILE saving big money on our services? Click here to learn how!
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