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
Continue Reading -->Options In Play – The Impact Of Earnings
Earnings reports are typically huge catalysts for stocks. But for some, earnings are not the major driver of action and are not worth playing.
Continue Reading -->Options In Play – Day Trading News
Breaking intra-headlines can create nice opportunities for short-term options trades. I love to play headlines, and I follow a process for buying/selling.
Continue Reading -->Scott Redler’s Dog Bytes: Did Cannabis Stocks Bottom?
SPX hit a high of 4718 on Friday. It’s a bit extended and might need a few days to catch its breath. Listen up for whether Powell gets the nod because that can move the market a bit. I’d think the market would like Powell instead of Brainard. We’ll see if 4681 holds, or if they shake the tree down towards the 8 day.Now let’s dig into some of the individual names I’m watching. TSLA was great to us from $800 all the way to $1200+ with lots of setups for cash flow. I’m short some calls from Friday so I don’t mind this down open. Elon tweeted about the possibility of him selling 10% of his stock. This morning it was as low as $1130 and it’s off that. I’ll wait for some price discovery before I trade it. The 8 day is $1152. The cannabis sector has been battered and bruised all year. Most are selling for tax losses and PM’s trying to get them off the books and MSOS has been very broken. Maybe Friday’s news changes all of that. It did go 10% on Friday so take care chasing today. But I’d think $33.80 can happen. $30ish is Resistance #1. I started to position for the January effect, so this move can help my options. I grabbed some GRWG as US Cannabis names woke up Friday. I did trim some and I’ll hold some in case this starts a new active sequence.Positions Disclosure as of 11/8/2021 at 8:11 a.m. ET
Continue Reading -->Options In Play – Earnings On The Radar Week Of 11/12/21
We are through the heart of earnings season but there are still big names left on the calendar. Expect another busy week for Tech, with a few recent momentum stocks due to report.
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