Options in Play – Earnings on the Radar Week of 12/13
This coming week will feature a lighter lineup of earnings but several of those names of heavy hitters. Expect more action in Retail and Tech.
Continue Reading -->Options in Play – The Tale of Two Strangles
WORK and RH were 2 stocks we targeted with strangles into their reports this week and they are having different reactions to the numbers. Neither move is ideal and that means we need to approach them differently.
Continue Reading -->Options in Play – Breaking My Rules for Bios
Typically, I like to wait until the day before or the day of the catalyst to open straddles/strangles but we have broken that rule on a few recent Bio trades. Part of it has to do with the lack of a firm date for data releases, but it also has to do with the overall environment (which is important).
Continue Reading -->Options in Play – Revisiting the Timing of Our Entrances
It never hurts to go over principle ideas every now and then. The timing of our entrances for swing trades and event/volatility trades are different, and it is an important point to discuss again.
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 -->Actionable Swing Trade Ideas for Dec 2-6 | Weekly Market Update
December 2 marks the first trading day for the month of December. Sami Abusaad looks at what stocks have been doing up until now and which ones should end the year on a high note. In this video, Sami explains: Why he doesn’t look to catch the top when a stock is grinding up Which of his swing trade ideas have already reached targets When a stock is at its most vulnerable Why he’s tightening up on CLDR Why he didn’t include CDLX on his list of swing trade ideas
Continue Reading -->Options in Play – Earnings on the Radar Week of 12/6
December is going to kick off with a bang for Software stocks. This coming week will be packed with big reports from a bunch of high profile names in the sector.
Continue Reading -->Options in Play – Earnings on the Radar Week of 12/6
December is going to kick off with a bang for Software stocks. This coming week will be packed with big reports from a bunch of high profile names in the sector.
Continue Reading -->50 Stock Trading Terms You Need to Know
Trading can seem daunting to anyone just starting out, and all the terminology you have to learn makes it worse. Learning some key terms can help a beginner trader start to understand the basics of trading, and prepare them for more in-depth trading education. Below is a list of 50 terms that all traders should know. This is an amazing way to start your trading education journey. This guide to trading lingo is especially helpful for T3 Live subscribers — it will prepare you to better follow our instructors and to start profiting quickly. Arbitrage Arbitrage is the practice of buying and selling an asset in two different venues simultaneously to profit off a difference in the price. There is typically no holding period because both transactions happen at the same time. Ask The ask price is the price a seller is willing to accept for their stock. An ask quote will include the price and the number of share available to be sold at that price. Bear Market A bear market is a market that has declined 20% from the highs. The phrase “bear market” sometimes also refers to an individual security or commodity that has declined by at least 20%. More on Bear Markets Bid In comparison to the ask price, the bid price is the amount a buyer is willing to pay for a stock. Blue Chip Stocks “Blue chip stocks” are big name companies that are well-established and with a large market value. The name comes from blue poker chips, which are the most valuable chips. Blue chip companies are usually valued at $10 billion or more and can be found in a major market index, like the S&P 500 or Nasdaq 100. Bull Market A bull market is the opposite of a bear market. In a bull market, stocks are 20% off the lows. More on Bull Markets Candlesticks A candlestick looks like the wax part of a candle, and marks the opening or closing price of the stock and will be either black or red (if the stock closed lower) or white or green (if the stock closed higher). The thinner parts of a candlestick on the top and bottom, which look like the wicks on a candle, mark the highest and lowest prices of the day. T3 Live Director of Education Sami Abusaad explains the candlestick chart in the Strategic Day Trader Ultimate Guide Common Stock Common stock is the type of stock that most people invest in; it represents a share of ownership in a corporation and affords the investor the right to vote on the company’s board of directors and policies. Common stock owners also have a claim on profits, although they are at the bottom of the priority ladder if the company goes bankrupt (creditors and preferred shareholders receive their shares first). Cover Covering is the closing (or reducing of a short position). When a short position is initiated, the trader is selling shares they don’t actually own. Covering is when some or all of those shares are bought back. Day Trade A trade is one where thee position is bought and sold within the span of a single trading day. Day traders capitalize on short-term market moves in order to make a profit. T3 Live’s Strategic Day Trader subscription will help you understand day trading and guide you into making the best trades. Dividend When a company makes a profit, they can distribute portions of their earnings to stockholder through dividends. Dividends may come in the form of cash, additional shares of stock, or other property. Not all stocks pay dividends. Earnings Report Each quarter, public companies publish an earnings report detailing their most recent performance. The report includes an update of the company’s profit and loss statement, assets, liabilities, equity and cash flows. Shareholders can learn more about the company’s financial health and change their investment accordingly. The value of the company’s stock will fluctuate wildly on the day the report is released. Equity There are multiple financial definitions for “equity,” although the most common refers to the amount of assets that shareholders can claim if the company liquidated or paid off their debts. This is also called stockholders’ equity. In comparison, owner’s equity refers to the money that remains when the company has repaid its creditors after liquidating its assets. In some cases, equity is simply used to refer to stocks, particularly common stocks. ETFs ETF stands for exchange-traded fund, a grouping of multiple securities that can be traded on major exchanges like a stock. ETFs are divided into shares, which give the shareholders proportional shares of the total assets, although they do not own the underlying assets (which are owned by the fund provider). ETFs are designed to track the value of an asset, although they trade at prices determined by the market. ETFs that track a stock index will pay out lump dividend payments to investors for the stocks that make up the index. Fill When an order is placed to buy or sell a stock, the fulfillment of that order is called a fill. There are multiple ways of filling an order, depending on which type it is. If a market order is placed, the investor is telling the broker to either buy or sell that stock at the best available current price. If a limit order is placed, the order will be filled once the stock reaches a specific price; if that price is not met during the predetermined period of time, the order will not be filled. A stop order, or stop-loss order, is a limit order that becomes a market order once the set price is achieved. The order will be filled at the next available market price. Forex Forex is simply a nickname for the foreign exchange market. The market includes multiple countries and exchanges currencies rather than assets. Forex is the largest exchange market in the world, with trading occurring 24 hours a day, 5 days a week.
Continue Reading -->One of My Favorite Buy Setups
The Strategic Day Trader Lesson Series is designed to give you a comprehensive start-to-finish understanding of technical analysis. It is suitable for both short- and long-term traders, from traders who can follow the market for the entire day to traders who can only dedicate as little as 30 minutes per day. In this video, Sami explains: When you should wait to play a bleed breakout Why a gap fill is his favorite location What he’s learned about stocks that gap to resistance Why you shouldn’t play a stock that is downtrending long How a W pattern is actually a failure pattern What narrow range bars indicate
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