ROKU Walk Through
On January 22, the following alert was sent to subscribers, before the open; W.D. Gann said the 50% retrace alone was a powerful trading concept. ROKU shows a 50% retrace of the last swing. Additionally, it is in the double down inside position or what I call a ‘crouch’. We are long from last week awaiting the potential turn up. ROKU should react one way or the other today: as the 58 high is straight across and opposite January 20-21 on my Square of 9 Wheel. The combo of pattern combined with a time/price square-out presents an interesting setup on this 1st 50% pullback in a hot new issue. This was followed up on, shortly after the open, with the following: Before the open, we sent a note on a long ROKU setup. Let’s look at this morning’s action. ROKU opened down but quickly turned up triggering an Opening Range Breakout (ORB). Notably, the down open did not violate the ‘crouch’ position. The down open followed by a breakout over the first half-hour’s range is what I call a Catapult ORB. In other words, ROKU pulled back the rubber band to kick off the week and found bids underscoring the viability of the setup. We will complete our pilot long position here at the market maintaining our stop. Good Luck, Jeff With the strength seen in ROKU, we sold half our position at 43 giving us a 2.16 gain. We are trailing the balance at 41. *UPDATE* Yesterday ROKU responded to a turning point mapped out ahead of time. As the Square of 9 below shows ROKU’s 58 all-time high is 180 degrees straight across and opposite January 22. (click here to enlarge) At the same time ROKU showed a 50% retrace of the last swing… offering an idealized long set up in tandem with a flush out of the 50 day line. A 10 min ROKU maps the action. A Boomerang buy signal was triggered following an undercut of Friday’s flat when price knifed back through the flat. An Opening Range Breakout confirmed the idea that ROKU had found bids and was poised for a ramp higher. The little opening decline set the trap door as buyers were waiting. Subscribers initiated a pilot position last week at 40.66 and completed it yesterday morning at 41.02 for an average cost of 40.84. We sold half the ROKU position yesterday at 43 and the balance on this morning’s spike.
Continue Reading -->Sentiment Report: 100% Happy Traders
Sentiment has been incredibly bullish since early December 2017. It’s common for the market to top out when sentiment gets to extreme levels, but there’s no guarantee. And indeed, the bulls have been getting rewarded at every turn since the market just won’t break down. So let’s dig into our sentiment indicators to see if traders are still feeling happy. (click here for a primer on the sentiment indicators below) 1) VIX Spread – Bullish Two weeks ago, the VIX made several intraday lows around 9, indicating that traders expect almost no volatility. The VIX has ticked up around 12. Now, on the surface, that may imply that traders are slightly more cautious. However, the curve of the VIX futures term structure is very, very flat. This again means that traders expect near-zero volatiltiy for the next few months. But that’s no surprise since we haven’t had a 3% pullback in about a decade! (okay, it’s not a decade, but it has been more than a year) So it’s no surprise that traders expect more of the same. (click here for a primer on the VIX spread) 2) CNN Fear & Greed Index – Bullish The Fear & Greed Index is at 72, down slightly from 77 last week. This index operates on a 0-100 scale, and a reading of 72 means traders are moderately greedy (or bullish). So no real change here. 3) AAII Sentiment – Bullish The American Association of Individual Investors just released their latest weekly sentiment survey. 54.1% of survey respondents were bullish, which is well above the long-term average of 38.3%, and a bounce from last week’s 48.7% reading. Two weeks ago, we had a momental reading of 59.8%, which was the highest level since December 2010. 4) CBOE Equity Put-Call – Bullish The CBOE Equity-Put Call ratio’s latest reading is 0.56. This is well below the 0.654 long-term average. The 10-day moving average is 0.549, which is extremely low on a historical basis. And the 3-day moving average, which I use to measure very short-term bullishness, is just 0.51. So it’s the same old story: traders are buying up call options like they’re hotcakes, and they’re not buying many puts. Of course, that’s worked out beautifully for bulls because the market just won’t break down! Conclusion Out of 4 sentiment indicators, we have: 4 bullish (flat from last week) 0 neutral 0 bearish On October 6, I made the following melodramatic declaration: Let’s not mince words: the bulls are clearly insane. They think they’re destined to ride into the sunset on a magic carpet made of cold hard cash. I can see both sides of the coin here. The bulls may be insane… but they may also be right. Timing market turns based on sentiment indicators is awfully tricky. And remember, the trend can go on a lot longer than may seem reasonable. And I’ll repeat what I’ve been saying for the last 2 weeks: Well, the trend has gone on a lot longer than seemed reasonable! Again, I can’t remember seeing sentiment this positive for this long. And I have to imagine the bears are going nuts, just getting grinded out a penny at a time. Remember, picking a top based on sentiment is extremely tricky business… so tread carefully.
Continue Reading -->How to Profitably Trade a Strong Gap | Black Room Lessons | Ifan Wei
In today’s Black Room lesson, Ifan Wei shows you how to capitalize on extreme price action. Ifan performs a trade review of SSRM and gives you a clear strategy for a bullish stock with a bullish gap. Join Sami and Ifan in the Black Room Just $7 for Your First 30 Days Watch today’s lessons then join the Black Room for 30 daysSami Abusaad Black Room
Continue Reading -->Trader’s Digest: The 10 Stories We’re Reading Right Now
Wonder what traders are talking about today?We’re here with the top 10 stories we’re sharing with colleagues today, covering topics like:Why Scott Redler Said the Energy Trade Has ChangedWhat Could Kill the Bitcoin BoomWhen to Short Sell Strong StocksAnd more!So check out these links right now and get up to speed: 1) Scott Redler: The Energy Trade Has Changed (T3 Live)On his 2018 Market Outlook Report, Scott said oil could hit $62 to $65 this year, and named the Vaneck Vectors Oil Service ETF (OIH) as one of his top picks.With oil hitting Scott’s target range, the trade has changed. Here’s why. Watch the Video -> 2) What Could Kill the Bitcoin Boom (Bloomberg)If you bought a Bitcoin in early 2017, when one cost less than $900, you could have a profit of more than 1,200 percent now. But you almost certainly didn’t do that. Read the Article -> 3) Goldman shares fall after bank reports ‘shocking’ 50% drop in bond trading revenue (CNBC)Goldman Sachs on Wednesday reported fourth-quarter earnings of $5.68 a share that topped Wall Street estimates, but shares edged lower in premarket trading. Read the Article -> 4) Follow the Money (Of Dollars and Data)The problem with being good at sports betting is that most bookmakers learn who you are and refuse to take your bets. Why? Good sports bettors will cut into a bookmaker’s profit, especially when placing larger bets. Read the Article -> 5) When to Short Sell Strong Stocks (T3 Live)In today’s video, Rob shows you which stocks to short sell in a bullish market and the exact price to place your trade. Read the Article -> 6) Hudson River Trading to buy rival HFT firm Sun Trading (Reuters)Hudson River Trading LLC has agreed to buy Sun Trading parent Sun Holdings LLC, it said on Tuesday, the latest takeover in a shrinking high frequency trading industry beset by low market volatility and rising costs. Read the Article -> 7) Is This the Market’s Final Fling? (T3 Live)You have to trap the majority in order to set up the slingshot to the upside or the waterfall to the downside — the bigger the misdirection move, the bigger the move in the opposite direction. Read the Article -> 8) Celgene Needs a Boost, But Juno Isn’t It (Bloomberg)Cell therapies are complicated and expensive, and rivals have a head start. Listen to the Podcast -> 9) Electricity from all forms of renewables will be consistently cheaper than fossil fuels by 2020 (Quartz)“Turning to renewables for new power generation is not simply an environmentally conscious decision, it is now overwhelmingly a smart economic one,” said Adnan Amin, who has the numbers to back it up. Read the Article -> 10) How to Move Forward Instead of Staying Stuck (Tedx Talks)Don’t get stock in the past. Start moving forward today.
Continue Reading -->Sentiment Report: Pure Joy
Sentiment has been incredibly bullish since December 2017. It’s common for the market to top out when sentiment gets to extreme levels, but there’s never a guarantee. And indeed, the bulls have been rewarded with what feels like a nonstop string of record highs. So let’s dig into our sentiment indicators to see if the mood’s changed at all this week. (click here for a primer on the sentiment indicators below) 1) VIX Spread – Bullish Last week, the VIX made several intraday lows around 9, indicating that traders expect almost no volatility. The VIX has ticked up just a bit and is hovering around 10. The 3 month spread is at 2.9, which indicates that traders are fairly bullish. But what’s really interesting is that the curve of the futures term structure is very, very flat. This again means that traders expect near-zero volatiltiy. But that’s no shocker since we’re coming off a year without a single 3% pullback. No surprise that traders expect more of the same. (click here for a primer on the VIX spread) 2) CNN Fear & Greed Index – Bullish The Fear & Greed Index is at 77, up slightly from 74 last week. This index operates on a 0-100 scale, and a reading of 77 means traders are moderately greedy (or bullish). Last week, I was surprised Fear & Greed wasn’t higher, but it’s rebounding quickly.I’m very surprised at this — I thought it would be higher. 3) AAII Sentiment – Bullish Now this is where things get nutty. The AAII Sentiment Survey shows that 48.7% of survey respondents are bullish, which is well above the long-term average of 38.3%.That was the highest level since November 13, 2014. However, it’s down from last week’s rather extreme 59.8% reading. That was the highest level since December 23, 2010! So it looks like Wednesday’s little intraday dip knocked a bit of froth out of the market. 4) CBOE Equity Put-Call – Bullish The CBOE Equity-Put Call ratio’s latest reading is 0.5. This is way, way below the 0.654 long-term average. The 10-day moving average is 0.563, which is also extremely low on a historical basis. And the 3-day moving average, which I use to measure very short-term bullishness, is 0.583. So the trend of traders buying tons and tons of call options relative to puts. Of course, that’s worked out great for buyers because the market just won’t break down. Conclusion Out of 4 sentiment indicators, we have: 4 bullish (flat from last week 0 neutral 0 bearish On October 6, I made the following melodramatic declaration: Let’s not mince words: the bulls are clearly insane. They think they’re destined to ride into the sunset on a magic carpet made of cold hard cash. I can see both sides of the coin here. The bulls may be insane… but they may also be right. Timing market turns based on sentiment indicators is awfully tricky. And remember, the trend can go on a lot longer than may seem reasonable. And I’ll repeat what I said in last week’s sentiment report: Well, the trend has gone on a lot longer than seemed reasonable! I can’t remember seeing sentiment this positive for this long. Of course, timing trades and determining your portfolio strategy off sentiment indicators is largely a fool’s game, so use this data as only one part of your process.
Continue Reading -->Relative Strength Trades | Black Room Lessons-Ifan Wei
In today’s Black Room video Lesson Ifan Wei walks you through how to identify relative strength and relative weakness. And then Ifan shows you how to apply the strategy to find winning trades.Join Sami and Ifan in the Black Room Just $7 for Your First 30 Days Watch today’s lessons then join the Black Room for 30 daysSami Abusaad Black Room
Continue Reading -->Trader’s Digest: The 10 Stories We’re Reading Right Now
Wonder what traders are talking about today?We’re here with the top 10 stories we’re sharing with colleagues today, covering topics like:How Mark Melnick Created a BitCoin-Powered Kodak MomentEthereum’s Megamove to Kick off 2018China’s Possible Exit of the US Treasury GameAnd more!So check out these links right now and get up to speed: 1) Mark Melnick’s Bitcoin-Powered Kodak Moment (T3 Live)In this 9-minute video, Mark Melnick walks you through the SIX different stages of a massively profitable trade in Kodak (KODK). Watch the Video -> 2) Ethereum hits a fresh record high and is up over 13,000% in a year (CNBC)Ethereum hit another all-time high Wednesday with the cryptocurrency now up more than 60 percent in a week.The digital currency hit a record high of $1,417.38 before paring some of those gains, according to CoinDesk, a website that tracks the prices of the digital currency. Read the Article -> 3) China Weighs Slowing or Halting Purchases of U.S. Treasuries (Bloomberg)China added to bond investors’ jitters on Wednesday as traders braced for what they feared could be the end of a three-decade bull market. Read the Article -> 4) Oil prices hit fresh highs, but worries grow of overheated market (Reuters)Crude oil prices hit new multi-year highs on Wednesday as OPEC-led production cuts and healthy demand helped to balance the market, but analysts warned of possible overheating. Read the Article -> 5) All the Mania in the World (T3 Live)If we wish to avert failure in speculation we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. Read the Article -> 6) Forget North Korea, this is the biggest political risk facing stocks in 2018 (MarketWatch)With the global economy enjoying steady growth, one of the biggest risks to Wall Street in 2018 is seen as coming from the political arena, although the primary catalyst for selling may not be the most visible threat. Read the Article -> 7) Scott Redler: 10 Trading Rules I’ll Teach My Son (T3 Live)If my son wanted to be a trader, I’d drag him into the garage, lock the door, and not let him out until he understands these 10 trading rules. Read the Article -> 8) Interview with Joseph Fahmy, Managing Director of Zor Capital (Technical Analysis Radio)In this podcast interview, JC Parets of All Star Charts sits down with Joseh Fahmy for an in-depth discussion of the US stock market. Listen to the Podcast -> 9) The secret lives of students who mine cryptocurrency in their dorm rooms (Quartz)Mark was a sophomore at MIT in Cambridge, Massachusetts, when he began mining cryptocurrencies more or less by accident. Read the Article -> 10) One More Reason to Get a Good Night’s Sleep (Ted)Want to be better at everything you do? Get some sleep.
Continue Reading -->Sentiment Report: The Lunatic Fringe
Sentiment was very bullish in December 2017. But the bullishness us turning into straight-up lunacy. Don’t believe me? Just check out the numbers! (click here for a primer on the sentiment indicators below) 1) VIX Spread – Bullish The VIX has been making intraday lows around 9 for the past 3 days, indicating that traders expect almost no volatility. The 3 month spread is at 3.6, which indicates traders are fairly bullish. But what’s really interesting is that the curve of the futures term structure is is very flat. It’s almost shocking how little volatility is being priced in for the next few months. We’re coming off a year without a single 3% pullback, so I guess traders see more of the same. (click here for a primer on the VIX spread) 2) CNN Fear & Greed Index – Bullish The Fear & Greed Index is at 74, up from 62 last week., which is down just a bit from last week. This index operates on a 0-100 scale, and a reading of 74 means traders are moderately bullish. Last week, I was surprised Fear & Greed wasn’t higher, but it’s rebounding quickly.I’m very surprised at this — I thought it would be higher. 3) AAII Sentiment – Bullish Now this is where things get nutty. Last week, the AAII Sentiment Survey showed that 52.6% of individual investors were bullish. That was the highest level since November 13, 2014. This week, it hit 59.8%. We haven’t seen individual investors this bullish since December 23, 2010! Let’s keep in mind that the AAII sentiment number was depressed for most of 2017, averaging just 35.1%, which was under the 38.5% long-term average. For years, the permabears have been saying that retail investors are “all in.” Well, the permabears are finally correct! 4) CBOE Equity Put-Call – Bullish The CBOE Equity-Put Call ratio’s latest reading is 0.5. This is way, way below the 0.654 long-term average. The 10-day moving average is 0.556, also is extremely low on a historical basis. And the 3-day moving average, which I use to measure very short-term bullishness, is 0.503. We haven’t seen a 3-day moving average this low since December 9, 2016. Traders are buying tons and tons of call options. Of course, that’s worked out great because the market just won’t break down. Conclusion Out of 4 sentiment indicators, we have: 4 bullish (up from 3 last week 0 neutral (down from 1 last week) 0 bearish (flat from last we) On October 6, I made the following melodramatic declaration: Let’s not mince words: the bulls are clearly insane. They think they’re destined to ride into the sunset on a magic carpet made of cold hard cash. I can see both sides of the coin here. The bulls may be insane… but they may also be right. Timing market turns based on sentiment indicators is awfully tricky. And remember, the trend can go on a lot longer than may seem reasonable. Well, the trend has gone on a lot longer than seemed reasonable! I can’t remember seeing sentiment this universally bullish. It feels like it’s been a decade since we’ve had a pullback, and it feels like no one expects one. That doesn’t mean the market HAS to fall… but let’s stay on guard, okay?
Continue Reading -->How Charts Become Money | Black Room Lessons | Sami Abusaad
This is what a $5,000 looks likeHow chart reading turns into bankable money.
Continue Reading -->Trader’s Digest: The 10 Stories We’re Reading Right Now
Wonder what traders are talking about today?We’re here with the top 10 stories we’re sharing with colleagues today, covering topics like:How to take control of your trading in 2018What Bitcoin needs to really grow in the futureA stock’s big gap up to all-time highs, and how to trade itAnd more!So check out these links right now and get up to speed: 1) Scott Redler’s Reality Check: How to Take Control Of Your Trading in 2018Every day is a new day. And every year is a new year. You can always start over. That’s the beauty of trading. But if you want to make a fresh start, you need a reality check. Read the Article -> 2) Why Bitcoin Needs Fiat (Coindesk)Imagine a parallel universe in which the U.S. economy could only grow at $50 every 10 minutes generating a mere $2.6 million of output per annum. Read the Article -> 3) Manufacturing in the U.S. Just Accelerated to Its Best Year Since 2004 (Bloomberg)U.S. manufacturing expanded in December at the fastest pace in three months, as gains in orders and production capped the strongest year for factories since 2004, the Institute for Supply Management said Wednesday. Read the Article -> 4) Oil hits 2-1/2-highs on Iran tensions, upbeat economic data (Reuters)Oil prices rose nearly 2 percent on Wednesday to the highest in 2-1/2 years, with buying spurred on by a sixth day of unrest in OPEC member Iran and strong economic data from the United States and Germany. Read the Article -> 5) Ifan Wei’s BAX Trade Review (T3 Live)In the latest video from the Black Room team, Ifan revews BAX after its gap to new all-time highs. Watch the Video -> 6) A record amount was spent on S&P 500 dividends over 2017, and 2018 could break that record (MarketWatch)Dividend yields in the U.S. stock market may be slight compared with other major markets, but that’s not for a lack of trying on the part of major companies. Read the Article -> 7) Why 2018 Is a Transition Year for Gold (T3 Live)Gold saw one of the sharpest rallies of the year in December. And yet few are paying attention. Read the Article -> 8) AMD shares surge on report of an Intel chip security flaw (CNBC)The British tech website Register reported Tuesday that some Intel processors have a “fundamental design flaw” that will spur a significant security update of Linux and Microsoft Windows operating systems to work around it. Read the Article -> 9) The 99 Best Things That Happened in 2017 (Quartz)If you’re feeling despair about the fate of humanity in the 21st century, you might want to reconsider. In 2017, it felt like the global media picked up all of the problems, and none of the solutions. To fix that, here are 99 of the best stories from this year that you probably missed. Read the Article -> 10) How to Apply Stoic Philosophy to Your Life (Tim Ferriss)Best-selling author explains the unique value of stoic philosophy, and how you can apply it to your life.
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