How to Find the Line of Support
The market is starting the week all out bullish, and should continue to be bullish barring a break of the line of support. Sami will tell you where he thinks the lows of the market are for the week and where it could be heading. In this video, Sami explains: – His best trade from last week (and which name is looking the same) – Why it’s not too late to get in ANAB – How you can find an entry on a stock you like – Which name has a classic 1-2-3 pattern – Why he’d like to get in on HPQ
Continue Reading -->Scott Redler’s Dog Bytes: The Metaverse Begins
SPX futures are +20, giving upside follow-through to Friday’s strong close. It’s been above the 8 day for 14 sessions, giving us a great Bullish active sequence to manage. I’ll stay with it as long as it continues using my tier system. And I’ll look to take advantage of opportunities that present themselves.Now let’s dig into some of the individual names I’m watching. FB got a positive reaction to the Metaverse pivot. The symbol changes to $MVRS on December 1. It is still broken, but some caught a Red Dog Reversal long as it reclaimed the $309 pivot to see a high of $325.50. It’s hard to chase this open, but it might try and fill that gap above this week. TSLA was a huge winner for me and helped get me back to highs of the year. There have been multiple strategies since clearing the $805 area in early October. On Friday it cleared its flag pattern above $1094. I’m long and will trim some. I also have some calls sold higher, and I may add to those carefully.MSFT has had impressive action both pre and post-earnings. Keep managing the trade. It hit $331.05 Friday. I’d look to trim, not add this morning. It’s a little extended. That doesn’t mean it’s an easy short.GOOGL has been best in breed. Some active longs might be in vs. $2893. The recent all-time high pivot is $2973. See if it clears that for extra cash flow.AAPL absorbed the post-earnings weakness well Friday, giving us a cash flow opportunity. It’s flattish this morning. I might need some time. Let’s see if the $148.50 area holds.Positions Disclosure as of 12/1/2021 at 8:11 a.m. ET
Continue Reading -->T3 Sentiment Survey: Why Is Tesla Loved LESS?
Welcome to the result of our weekly sentiment survey! As a reminder, our survey measures traders’ opinions on 6 different instruments:The S&P 500BitcoinApple (AAPL)Tesla (TSLA)GoldOilWe use a 30-day time horizon to get a sense of traders’ near-term expectations for the market. This week, you’ll want to see what’s happening with Tesla (TSLA)! Scroll down to see the details… Trader Still Love Stocks The stock market’s been remarkably stable despite concerns about the Fed, interest rates, earnings season, and the global supply chain crunch. Yes, we had a scare in early October, but it didn’t last:As you can see, bullishness increased from last week, which is no surprise given the market’s strength. We went from October scare to a parabolic move straight up. The Bitcoin Love Is Back Bitcoin bullishness stabilized last week, following the October 21 Flash Crash on Binance.us. Traders Grow More Cautious After Apple Earnings Apple (AAPL) stock got roughed up on Friday after the company’s disappointing earnings report, so it’s no surprise bullishness slipped a bit from last week. Traders Love Tesla LESS Despite Record Highs Tesla (TSLA) has been RIPPING since earnings, as you can see on the chart:And the stock is actually up another $40 to $1154 on Monday morning as we write this. Yet, bullishness on Tesla is slipping. It seems like many traders believe Tesla has gone too far, too fast – which is quite common for high-octane momentum stocks. We have to wonder if this means Tesla has even MORE room to run. Because if there are doubters, that may mean the crowd is not yet “all in” on the stock. And interestingly, according to Yahoo! Finance, the average price target on Tesla is just $779. That’s $375 BELOW the current stock price. Gold Still Gets No love Gold is still the least-liked asset in our survey, and that’s no surprise. Previous metals have been some of the worst performers in 2021. Just take a look at a year-to-date chart of GLD:Here are the major metals ETFs performance year-to-date:GLD: -6.6%GDX: -12.0%SLV: -10.1%Meanwhile, the SPY is up 22.8% and QQQ is up 23.1%. Ripping Oil Stocks Keeping Traders Bullish Traders remain bullish on energy, and that’s no surprise. Crude oil is up +73% year-to-date. Plus, XLE is up +51.6% with OIH right behind at +36.5%. That makes them the top 2 performing major sector ETFs of 2021. Make Sure Your Voice HeardWant to make your voice heard in our weekly surveys? Click here to join our panel. 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 – Boxing Big Moves
When stocks have huge after-hours or premarket moves, it can be stressful to hold options that may have moved in the money while waiting for the market to open. Boxing can help lock in trades or reduce risk, and they are great when stocks are gapping.
Continue Reading -->Options In Play – Follow The Leader Tape
It’s not unusual to see a few stocks stand out over a several-week or several-month time frame. And often as those stocks run, they bring other names along in their wake.
Continue Reading -->Expecting a Drop in the Market
Some of the tech stocks were hit, causing relative weakness in the market. But the buy setup on the weekly QQQ and SPY charts worked, and Sami’s expecting a drop to come, although the size of the drop is yet to be seen. In this video, Sami explains: – Why he wants to get out of half of his SHIB position soon – Which reliable name is looking good to trade again – What signaled a good buy opportunity in AVIR – Where he thinks ELAN is heading – Why it’s not too late to get in on EPIX
Continue Reading -->Scott Redler’s Dog Bytes: What About Tesla?
SPX futures are +5 and we see if 4524 holds to keep upper momentum. The trade is very specific right now. SNAP, INTC and IBM put pressure on tech. We’ll see how FB’s earnings report after the close goes. Over in tech, as long as QQQ holds the $372 area, it’s hard to get too bearish.Now let’s dig into some of the individual names I’m watching. TSLA is now a top 3 P&L winner for me this year. It gave a beautiful long setup from $807 and another nice reentry post-earnings. It went green and cleared $877 and then $900 Friday. There’s nice upside follow-through this morning on a Morgan Stanley upgrade and Hertz news. I’d trim and trail. AMZN got hit Friday with most of tech as the $3400 pivot broke. I do have a call spread on for earnings Thursday. The only way it works is if a split gets announced, which might be far-fetched. There is a huge channel here with very choppy action, so be careful. FB was having problems even before the SNAP earnings miss which showed advertisers are not spending. It will be important to see if all the negativity is priced in. $317.37 was a recent point of reference. It reports today. They are also planning on changing their name so we will see they announce that.Positions Disclosure as of 10/25/2021 at 8:08 a.m. ET
Continue Reading -->T3 Sentiment Survey: Traders Love Oil, Sour on Bitcoin
Welcome to the results of the second ever T3 Trader Sentiment Survey!As a reminder, our survey measures traders’ opinions on 6 different instruments:The S&P 500BitcoinApple (AAPL)Tesla (TSLA)GoldOilWe use a 30-day time horizon to get a sense of traders’ near-term expectations for the market. This week, we’ve made a shift to simplify our data presentation. In our survey, we ask traders where each asset will go in the next 30 days, with the option to answer up, down, or not sure. We’ve eliminated the “not sure” answers to focus on traders with real opinions about each one. So the numbers below use the Up/Down entries only to determine the percentage of Up vs. Down.Trader Are Slightly Less Bullish on Stocks It seems that traders are becoming slightly more cautious as we had through earnings season. There’s been a lot of concerns about inflation, energy prices, the debt ceiling, and supply chain disruptions, which may be souring the mood a bit. However, there are still 2.4 bulls for every bear, so it’s hard to call the crowd even remotely negative.Traders Feel the Bitcoin Volatility Bitcoin had a wild week, including an 87% flash crash on Bitfinex. Bitcoin went from nearly $67,000 last Wednesday to under $60,000 on Sunday, so needless to say, some traders got stung. So there’s no surprise Bitcoin bullishness fell to 57% from 70%.Traders More Caution on Apple Into Earnings Apple (AAPL) sentiment fell to 67% from 74%, despite the very well-received Macbook Pro event on Monday. Traders are more focused on supply chain concerns. Apple has seemed to mostly evade these issues, but industry analysts believe the company could get caught up. Stay tuned — we’ll know a lot more with the company’s earnings on Thursday.Tesla All-Time Highs Don’t Impress Traders Much Tesla (TSLA) reported blowout earnings last Wednesday and is actually indicated to open at record highs this morning. However, you wouldn’t know it by looking out our survey, as bullish sentiment decreased slightly. It’s likely that some traders believed profit taking would set in.Rising Inflation Puts Gold in Spotlight Gold was the least liked asset in last week’s survey, but bullish sentiment increased for this week. Why? Inflation. Many traders believe (perhaps wrongly) that gold is an effective hedge against inflation, and so they expect gold to outperform.Screaming Oil Prices Have Traders BullishCrude oil prices have been ripping, with prices rising over $85 this morning. So it’s not surprise to see more oil bulls. Energy is the #1 sector in 2021, with XLE up 53% YTD and OIH up 44%. And based on our survey results, traders are more bullish on oil than any of our other 5 assets.Make Sure Your Voice HeardWant to make your voice heard in our weekly surveys? Click here to join our panel. Within the next few weeks, we’ll introduce a historical database so you can do your own analysis! Thanks for reading!
Continue Reading -->DWAC: 8 Things You Need to Know About This Meme Stock Monster
What was the biggest story in the stock market this week? Tesla’s (TSLA) big earnings beat? Intel’s (INTC) giant miss? Evergrande defaulting on debt payments? inflation? The broken global supply chain? NO. The biggest story in the market was… DWAC. Yes… Digital World Acquisition (DWAC), which became the biggest meme stock on planet Earth. Here’s what you need to know:Trump + SPAC + #wallstreetbets = BOOMThe #memestock boom began in early 2021 when traders on Reddit and other social platforms started piling into a small number of story-based stocks like AMC (AMC) and GameStop (GME). Look at this long-term monthly chart of GameStop:In December 2007 before the housing crash, GameStop hit a then record high of $63.77. The video game retail business was BOOMING thanks to the emergence of Halo, Call of Duty, and Guitar Hero. (ain’t that a blast from the past? But thanks to #wallstreetbets and the meme stock boom, GameStop hit $483 in early 2021 — while the business was clearly in decline. The meme stock universe is always hungry for hot, crazy, fast-moving stocks, especially when there’s some kind of populist or antiestablishment theme. These people do not want to hear about fundamentals and market caps and enterprise value and earnings. These traders want to strap themselves to a rocket and make fast cash, especially when there’s a chance to go against the Wall Street establishment. Now let’s tie in DWAC. On Wednesday night, former President Donald Trump announced he formed a new company called Trump Media & Technology Group (TMTG) which would merge with the SPAC Digital World Acquisition Company, which trades under the ticker DWAC. And just like that, a meme stock was born. What made DWAC a meme stock? 3 things: 1) DWAC/TMTG’s business model, the centerpiece of which is a platform called “Truth Social,” was mocked. Mostly for claiming Truth Social would compete with Facebook (FB) and Netflix (NFLX). DWAC also has an unconventional leadership team, including CEO Patrick Orlando, who operates another SPAC called Yunhong International (ZGYH)… which operates out of Wuhan, China of all places. Remember, the #wallstreetbets community reflexively supports what Wall Street hates. 2) DWAC is a SPAC, which #memestock fans love because they can run so fast. 3) President Trump brought a real story and maximum emotion to the equation. Regardless of how you feel about President Trump, we can all agree on two things: he is a magnet for attention, and he still has a lot of fans that automatically like what his critics attack. This created an absolutely EXPLOSIVE meme stock situation. So let’s look at what happened.DWAC Had Perhaps the Most Shocking Stock Explosion in HistoryWe can’t reliable claim this the single biggest explosion in a stock ever, but it’s got to be pretty darn close. Let’s look at DWAC’s daily trading volume last week.DayVolume Closing Price High Low Monday 10/18 1,100 $9.97 $9.95 $9.95 Tuesday 10/19 49,900 $10.01 $10.01 $9.95 Wednesday 10/20 697,900 $9.96 $10.04 $9.95 Thursday 10/21 498,782,500 $45.50 $52.0 $12.62Friday 10/22 131,612,900 $94.20 $175.00 $67.96DWAC’s volume Monday was 1,100 shares. And on Thursday, it was 498,782,500. That means the volume increased by 453,437% in 4 days! But you want to know what’s really interesting? Check this out…There May Have Been Some Funny Business Going on…The DWAC-Trump announcement hit Wednesday after the close. Reuters covered it in a story at 10:08 p.m. that night. Yet… volume on DWAC had mysteriously picked up in the days ahead of the release. DWAC’s volume went from 1,100 Monday to 49,900 Tuesday to 697,900 Wednesday before the news came out. How does an unknown SPAC see a nearly 700-fold increase in volume from Monday to Wednesday? Did somebody know something? Yet…There Was PLENTY of Time to Get in DWACBut even with potential funny business going on, there was plenty of time to get In DWAC. The story was buzzing on social media during the premarket Thursday. Here’s a 15 minute chart showing the early action:As you can see, volume started coming in around the $10 to $12 range between 7 am and the open. By that time, the DWAC story was all over Reddit, Twitter, StockTwits, Facebook, and Discord. It was also a heavy topic of discussion in T3’s own Virtual Trading Floor® rooms, where our room moderators called out ideas in DWAC and ancillary plays like Phunware (PHUN). (we’ll get to PHUN later in this story…) So you didn’t have to be Johnny on the spot. Heck, even if you waited until after the open, you could have easily gotten in under $15… and rode it to a close of $65.50.DWAC Was Halted Multiple Times, Causing Traders TREMENDOUS StressAccording to the SEC, “a U.S. stock exchange that lists a stock is required to issue a trading “pause” in a stock if the stock price moves up or down by 10% or more in a five-minute period. And since DWAC was moving so fast, it was halted multiple times on Thursday and Friday. This was tremendously stressful for traders, who were forced to wait 15 minutes or more to see what happened next. The stock would open and you could be up or down 20% in the blink of an eye… only to see it be halted again. Bid-ask spreads were also very wide, and with the stock jumping around so quickly, it was difficult to place limit orders with any semblance of precision. Many traders just entered market orders and hoped for the best. Some Traders Won Big… Others Got Left Holding the Bag…As you can see in this 15 minute chart, the DWAC boom started in the $10-$12 range Thursday morning. It went up all day Thursday…. then continued skyrocketing overnight. Now, here’s what’s REALLY crazy. On Friday morning, DWAC opened at $118.80 and hit $131.90 almost instantly. Then it was halted for 30 minutes… and reopened at $175 on the dot, which was the high of the day. Presumably, traders expected a GameStop like move and were taking a “whatever it takes” attitude towards getting in…. or out. One trader we spoke with said “I sold about 80% of my DWAC at $157 and then started panicking because they kept halting it and I wanted out. I eventually just put in a market order and sold the rest
Continue Reading -->Options In Play – Leaders Vs Laggards
We like to play options on leaders and laggards, but when to focus on which depends on how the market is acting.
Continue Reading -->