Trading a Top-Heavy Market
There’s a divergence in the indices, making the market top-heavy. Sami says you can expect a rotation, but right now his view of the market is dependent on what exactly you’re looking at. In this video, Sami explains: – Why AMRS is not a typical play – The type of breakout in ARWR – What he’s watching before he plays FCX – How to find a bottom in a stock like PCG – His long term play idea for this week
Continue Reading -->iLove: Why Traders Are Chasing Apple Now
What’s the big takeaway in this week’s sentiment survey. Traders LOVE stocks… especially Apple (AAPL). Traders Still Love Stocks 79% of surveyed traders are bullish on stocks for the next 30 days, which is no surprise given how the market came off the lows last week. Futures are off the morning highs, so we’ll see if the optimism is misplaced. Traders Still Like Bitcoin Bitcoin is well off the November 9 high at $68,958, but traders are still generally bullish on Bitcoin,,with bullishness over 70% for 4 straight weeks. Apple Still a Fan Favorite Apple (AAPL) has been steadily firing higher since its earnings report, and will open at new record highs above $160 on Monday morning.Traders believe Apple is headed for a strong holiday season as it seems like the company will only be held back by its ability to fulfill orders. Tesla Sentiment Rises Again Bullish Tesla (TSLA) sentiment increased for the second straight week following that mega drop down to 35%.Still, it appears traders are basically deadlocked on this controversial name. Gold Falling Out of Favor Last week, traders liked gold more than Tesla, but that situation flip flopped, likely because of gold’s big dip on Friday, which you can see on the chart: Traders Turn On Oil Crude oil prices have slipped from the highs, so it’s no surprise that bullishness on oil has slipped. And as you can see, energy stocks have taken quite a beating as of late after a nice run off the summer lows: Energy is still the #1 sector of 2021… but who knows how long that will last?Make Your Voice HeardWant to make your voice heard in our weekly surveys? Click here to join our panel. We’ll also email you survey results early on Monday mornings. We’ll soon introduce a historical database so you can do your own analysis! Thanks for reading!
Continue Reading -->Options In Play – The Quick Consolidation
If you focus on momentum names, then the quick consolidation is something you are probably familiar with. It is the fast pause in the aggressive trend that allows you to reload.
Continue Reading -->Options In Play – RIVN Options Are Live
The short wait is over. Options debuted on RIVN today and now there is another high-profile EV player to add to the watchlist.
Continue Reading -->The Pattern Most Stocks Have
We got the drop that Sami was predicting last week, and now the market’s gone back up. Find out how to trade the current buy setup and why Sami says this week is an easy call. In this video, Sami explains: – Why he only included stocks over a million shares on his watchlist – Where the entry is triggered on a 1-2-3 setup – How the IWM affected many of the stocks on his watchlist – Why he prefers GEO over EAF – One of the biggest mistakes he’s made recently
Continue Reading -->Scott Redler’s Dog Bytes: Watching the BIG ETFs
SPX futures are +15, giving some upside-through to Friday when we cleared 4664. I want to trim into some strength so I can buy dips and keep managing the Portfolio Approach that has been great since 10/13.Now let’s dig into some of the big ETF’s I’m watching: QQQ woke up again Friday as it cleared the $392 area with lots of specific action. The QQQ’s will open above Friday’s high of $395.25. I’d trim some longs so I can buy dips and net money. The big IWM channel resolved higher. It cleared $230 to see a high of $244. And last week it held in nicely, giving us $236 to trade against. Dips are buyable as long as that holds. Today, see if it clears and holds $240. My call spread still looks good. Banks are trying to rebuild with a pretty big bull flag pattern. As long as XLF holds the $39.80 area, some might be long. Others are waiting for a strong close above $40.20. Cannabis has been great since the Friday Igniting bar. MSOS gave a way to add on the pullback into the $29 area and it’s at $33+ this morning. I will likely trim some MSOS and the calls CGC, TLRY, and VFF calls which I picked up weeks ago.Positions Disclosure as of 11/15/2021 at 8:11 a.m. ET
Continue Reading -->Tesla: Traders Are DEADLOCKED!
Last week, traders were squared up against Tesla (TSLA).This week, we’re deadlocked.Normally, we begin the weekly T3 Sentiment Report with the SPX, but our Tesla data has been so interesting that we’re leading with it again. Tesla Sentiment COLLAPSES! Sentiment on Tesla improved quite a bit week-over-week. So instead of outright bearish, traders are now split 50-50 over Tesla.The stock is down about $200 off the highs and was down last week, so it’s interesting that bullish sentiment improved from that 35% number. Meanwhile, now CEO Elon Musk is trolling Bernie Sanders on Twitter, which seems to be exciting the peanut gallery. The big question now is “will dip buyers jump in Tesla now?” We’ll see. Trader Grow More Optimistic on Stocks The market was up Thursday and Friday, and SPX futures are up fractionally on Monday morning. So it’s no surprise SPX bullishness pushed up to 77%. Traders Still Like Bitcoin Bitcoin bullishness has improved quite a bit since the October 21 Flash Crash on Binance.us. And we’re not surprised – Bitcoin has been in a nice uptrend, and has been up for 3 straight days, as you can see on the chart: Traders Still Like Apple Apple’s (AAPL) last earnings report was less than stellar, but traders don’t care. Apple bullishness has been rising, based on the perception that the company’s biggest problem is its inability to get enough supply. Apple literally has too many customers and not enough stuff to sell ’em. Gold Feels the Love For the second week in a row, traders like gold more than Tesla, according to our survey data. While gold and other precious metals have been lousy performers year-to-date, they have been surging as of late, as you can see in this chart of GLD: Why the surge? Inflation just hit a 30-year high at 6.2%, and many investors and traders view gold as a hedge against inflation. Oil Bulls Back Off Crude oil prices have slipped off the highs, so it’s no surprise that oil sentiment has more or less flattened out in recent weeks. Oil is falling Monday morning, so we’ll see if that weighs on energy sector sentiment.Make Your Voice HeardWant to make your voice heard in our weekly surveys? Click here to join our panel. We’ll also email you survey results early on Monday mornings. Within the next few weeks, we’ll introduce a historical database so you can do your own analysis! Thanks for reading!
Continue Reading -->Options In Play – The GOLD Rush
A hot CPI number this week was a big positive for GLD, but whether or not there is more room to run depends on the next couple of weeks.
Continue Reading -->Options In Play – Home On The Range
Ranges hold until they don’t, so we try to respect them on QQQ and SPY. With indices pulling back, it is important to make sure you are focusing on quality levels for longs.
Continue Reading -->Trading Tesla: 7 Lessons from an Epic Bear Smash
Every once in a while, a stock comes along that defines the times. In 2019-2020, that stock was electric carmaker Tesla (TSLA). Tesla’s stock price went from under $40 to nearly $200 in 8 months, and dominated the news headlines along the way. Tesla was getting more attention than just any stock out there, aside from maybe Apple (AAPL).Some traders made fortunes. Others had their hearts broken. Two big things were happening:Bears ignored powerfully bullish technical signals Bulls pushed things beyond what seemed reasonable.And by studying this one stretch of Tesla’s price action, you can learn a lot about momentum, risk management, permabears, and the power of a cult of personality.I’ve distilled Tesla’s big run into 7 important lessons, which you’ll start learning right now.Scott Redler’s Positions as of 11/9/2021 at 3:34 p.m. ET.1. Understand That Some Stocks Are Just Plain DifferentSome stocks have such a powerful story that investors will routinely ignore short-term bumps in the road.Amazon (AMZN) is a great example. It’s missed on earnings plenty of times and had its fair share of bad news, but people have believed in the long-term story so much that every dip gets bought. Very few companies command that type of respect, so Amazon is basically in its own category.The long-term chart says it all:Tesla is also just plain different from the crowd in that it routinely goes from “left for dead” to “can’t be stopped.”Call it… the Elon Musk factor. Not many CEOs can get away with smoking pot with Joe Rogan. And that’s not the only trouble Tesla’s survived: there was the infamous ‘funding secured’ tweet, which attracted the attention of the SEC:Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018 What sets Tesla apart is its unique power to be forgiven for its misdeeds.There are core believers that are ready to juice the stock up at any given moment.These folks are 100% convinced in Tesla’s ability to succeed in electric cars, solar power, energy storage, and whatever Elon Musk comes up with next.And there are shorts that believe the company is just one step away from failure.So Tesla is a cornered animal.You can’t turn your back on it.Because every time Tesla seems like it’s on the verge of disaster, or that the stock’s just gone too far too fast, Elon Musk pulls a rabbit out of the hat.And just when it seems like it’s blue skies ahead, it stumbles. Tesla is a truly unpredictable stock — especially for a large cap.You never know what’s coming next.2. Price Action RulesIf you follow me on Twitter, you know that I follow the 8 & 21 day moving averages very, very closely. They’re my short-term momentum monitor. When stocks are trending above the 8 & 21 day exponential moving averages, I don’t fight them. The #1 reason traders lose on shorts is because they look at a chart and say “that’s gone too far. It has to go down.” But stocks like Tesla go too far all the time. It’s in their very nature. If a stock goes from $20 to $40 in the blink of an eye, you can’t count out $50. And if it gets to $50, you can’t count out $60, etc.Now, before you turn the page, look at the chart below. It is naked aside from two moving averages. What do you see? I see a lot of opportunities. Let’s break it down step by step.A) The Earnings Gap Holds On October 24, 2019, Tesla had a big pro earnings gap that woke it up. That was the moment we knew it was coming alive. And then it didn’t fill a single penny of the gap. That’s a sign of strength you can’t ignore, and should have been a wakeup call for the shorts.B) Cybertruck ConsolidationIn mid-Nov. to mid-December, Tesla had a healthy consolidation, with the 8 & 21 day refusing to break. As we’ll discuss later in more detail, this was during the Cybertruck launch drama, which was a pivotal time for the stock.C) Major Breakout LevelYou saw before how quick the short-term move was, but it’s also helpful to view things on a longer time frame because when historic levels get broken, they attract a lot of traders’ attention.And in this case, we’re talking about the Major Breakout Level at $76, which was a prior high for the stock.Turns out, what came next was even more explosive than I could have imagined!D) Accelerating Above the 8 DayThis was one of the most powerful moves I’ve ever seen. It was straight out of 1999.From December 5, 2019 to February 11, 2020, Tesla did not test the 21 day a single time.There was a quick test of the 8 day on February 6, but it was quickly reclaimed.E) The Parabolic MoveDo we really need to explain this? Tesla went absolutely wild, hitting $193.80.So what am I saying? Price action rules. Period!This trend demanded respect! And speaking of respect…3. Respect Stocks That Refuse to DieLet’s talk about the Cybertruck, which Elon Musk unveiled on November 21, 2019:Here are some headlines from the event:But how did the chart react to the Cybertruck launch, which included Elon Musk accidentally breaking a window? Let’s move in for a closer look: Tesla gapped down after the Cybertruck announcement.And then, on November 26, Elon Musk tweeted that preorders hit 250,000, which basically nullified all of the criticism.By refusing to break the 8 & 21 day, Tesla was telling you it wasn’t going down without a fight.And then when the Cybertruck announcement gap was filled with the 8 & 21 day being reclaimed, that was a sign sentiment was turning very positive.The lesson: if a stock refuses to die, show it some respect. 4. Be Careful When Hot Stocks Extend From the 8 DayI did very well with Tesla from the long side, especially with the call options and call spreads I bought in November.But I also sold call options to give me short exposure 4 separate times when it got super-extended from the 8
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