Active Swing Trade Management: A $1500+ Profit in CBI
In this special video, Nightly Game Plan Moderator Sami Abusaad walks you through a winning trade in Chicago Bridge & Iron (CBI). Like many infrastructure stocks, CBI was flying high after the President election, but it’s since come back down to Earth. But on August 22, Sami spotted an opportunity for a swing long with one of his favorte strategies: the Exhaustion Gap Fade As of the close on Thursday, August 24, the trade had returned $1,550 for Sami. (click here for a breakdown of our P&L calculations) In the video below, Sami’s going to walk you through the trade from start to finish so you can understand: Why Sami starts with the daily chart, and then drops down to the hourly How Sami identified the entry at $10.15, and how he managed his stops to minimize risk Risk-reward calculations What to do when a stock hits a target Trailing a stop for ongoing risk management How this trade fit into the 4 stages of stock movement Click here to learn about Sami’s Nightly Game Plan
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:What the Fed is saying about inflation and interest rate policyWhat ECB President Mario Draghi could say at Jackson HoleApple’s Hollywood invasionAnd more! So check out these links right now and get up to speed: 1) Wall Street Banks Warn Downturn Is Coming (Bloomberg) HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle. Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop. Read the Story ==> 2) Euro powers ahead against sterling as hawkish Draghi shrugs off exchange rate worries (The Telegraph) Mario Draghi, the ECB’s president, said the eurozone economy is firing on all cylinders as super-easy monetary policy continues to flush the system with liquidity. “It is before our eyes,” he said. Read the Story ==> 3) Scott Redler on Cheddar TV: AAPL, TSLA, and More! (T3 Live) T3 Live Chief Strategic Officer Scott Redler appeared on Cheddar TV to discuss some key investing topics, including why long-term investors are actually helped by market declines, and his thoughts on the 8-year old bull market.Continued Reading ==> 4) Report: Carrier sources indicate Apple iPhone 8 event date set for September 12 (9 to 5 Mac) Mac4Ever is reporting that they know when the September Apple event will take place, where Apple will announce three new iPhones: the OLED iPhone 8 and the iterative ‘7s’ phones. The report says that the event will happen on September 12 citing carrier sources Continued Reading ==> 5) True price of an Uber ride in question as investors assess firm’s values (Reuters) What is the true cost of an Uber ride? That simple question is often lost among the many controversies facing the ride-services company as it tries to hire a new chief executive and resolve a bitter dispute with the old one, Travis Kalanick. Continue Reading ==> 6) The 7 Deadly Sins of Trading, and How You Can Cure Them (T3 Live) Greed can eat you alive… even if you have all the money in the world. It’s one of the 7 deadly sins you’ve heard about from religious texts or pop culture. And as you’re about to learn, they all apply to trading, and they all have cures if you understand them. Continue Reading ==> 7) WPP faces worst year in a decade as advertisers cut spending (The Guardian) Sir Martin Sorrell’s WPP is facing its worst year in a decade as the world’s largest advertising group was forced to slash growth forecasts for the second time after sales went into reverse in the first half. The company cut its full-year growth forecast for revenues and net sales to between zero and 1% after reporting a marked deterioration in the second quarter that missed City expectations by some distance. Continue Reading ==> 8) 50 million could watch Mayweather-McGregor in the US alone (CNBC) Conor McGregor’s improbable challenge of Floyd Mayweather Jr. could be seen by a staggering 50 million people in the United States as fans and the curious gather in small and large parties. The fight Saturday night threatens the pay-per-view revenue record set by Mayweather and Manny Pacquiao two years ago and could dwarf it in viewership as people use the event as a reason to have friends and family over for a little escapism and controlled violence. Continue Reading ==> 9) IRS Uses Chainalysis to Track Down Bitcoin Tax Cheats (The CoinTelegraph) The IRS is actively seeking out tax evaders using Bitcoin, employing tools like Chainalysis to unmask them. Many people believe that Bitcoin is anonymous, but it is in fact pseudonymous. All transactions linked to a particular address are visible on the Blockchain, which is public and transparent. However, it is not possible to link a particular wallet address to the real world identity of a person/company without any additional information. Continue Reading ==> 10) Ray Dalio – How to Find Financial Success (YouTube) Ray Dalio, founder of mega hedge fund Bridgewater Associates, is one of the richest men in the worth, with a net worth of $17 billion. But while most hedge fund masterminds keep a low profile, Dalio is quite outspoken and happy to share his views on the world. In this video, Dalio identifies the 5 steps to financial success, and gives you his unique take on the American and European economies:
Continue Reading -->How Sami Abusaad Spotted a Major Bottom in ENDP
In this special video, Sami Abusaad, Director of our Nightly Game Plan program walks you through a trade in fast-moving biotech stock Endo International (ENDP). ENDP dropped about 50% in 3 weeks, providing Sami with an opportunity to go long with his proprietary Climactic Buy Setup. This swing trade returned a profit of over $1,570 in under 3 days, giving you an important lesson: when everyone’s trying to get out, it may be time to get in. (click here for an explanation of how we calculate profits and losses) But that’s easier said than done. So Sami’s going to walk you through the trade step by step so you can understand exactly how he spotted a near-term bottom in this stock. Watch the video below and you’ll learn: How Sami used volume to spot capitulation Parameters for risk-reward and trade management Fear, greed, and how they helped Sami trigger the trade Why Sami went long at $7.93 How his targets of $8.75 and $9.50 were selected Here’s the video: Click here to learn more about Sami’s Nightly Game Plan.
Continue Reading -->Did Mr. Market Just Throw Another Sentiment Boomerang?
Last Friday, sentiment got pretty awful in the wake of North Korea’s threats of an attack on Guam. And then early this week, it went full-on psycho bullish after North Korea blinked and backed off. That was good for me since I’m speculating on a big decline in the VIX… and then it wasn’t so good. With traders fearing that President Trump will have trouble instituting pro-growth policies like tax and regulatory reforms, the VIX spiked as high as 15.77 on Wednesday, up 40% from Tuesday’s 11.25 low. So my nicely profitable trade is now a loser! Let’s take a fresh look at our 4 sentiment measures to see which way the crowd is leaning heading into the weekend. (click here for a primer on the sentiment indicators below) 1) VIX Spread – Bearish The VIX is at 14.82 this morning, well above the July 26 all-time low at 8.84, and also above trend for this year. The 3-month spread is at +0.2, which means the VIX curve is flat. Traders are pricing in quite a bit of short-term volatility, so once again, this reading is bearish. (click here for a primer on the VIX spread) 2) CNN Fear & Greed Index – Bearish The Fear & Greed Index is at 19. The F&G Index operates on a 1-100 scale, and a reading of 19 qualifies as extremely fearful. 3) AAII Sentiment – Neutral The latest AAII Sentiment Survey shows that 34.2% of individual investors are bullish. This 34.2% reading isn’t terribly far off the 38.5% long-term average, and indicates that individual investors are basically neutral. I thought this would be lower, but the number is what it is. 4) CBOE Equity Put-Call – Bearish The CBOE Equity-Put Call ratio was at 0.78 Thursday, which is well above the long-term average of 0.66. The 3-day moving average is 0.69, which is slight above the long-term average. The 10-day moving average is 0.74, which is fairly high. These numbers indicate that traders are very bearish. Conclusion Out of 4 sentiment indicators, we have: 0 bullish 1 neutral 3 bearish The data indicate that sentiment boomeranged in a big way. Traders were pricing in the end of the world last Friday. Then they got happy on Monday and early Tuesday. And now they’re depressed again. You could say volatility is becoming more volatile. And I think this is a great thing because the market’s actually giving some real back and forth action. That means more opportunities for active traders, and action that’s actually interesting to watch. I don’t know about you, but I found June through late July to be agonizing to watch. Maybe the sudden spike in volatiilty means there’s trouble down the road… but at least we’ll be awake for it. Now I’m still speculating on a decline in the VIX. To be more specific, I am: -Long VXX puts -Short VXX call spreads Will the trade go profitable again? The ideal situation is a repeat of last Friday to Monday, when sentiment boomeranged from extreme fear to extreme greed in the blink of an eye. I guess I’m about to find out if that’s just wishful thinking…
Continue Reading -->What You Don’t Know About Prop Trading… but Should
In this special extended webinar, Amber Capra breaks down everything you need to know about the exciting world of prop trading. Click the monitor to watch the replay: Amber covers the world of prop trading from A to Z, including:How to determine whether prop trading is right for youProp vs. retail trainingWhy you need training, community, and ongoing coaching to succeedHow you can qualify for 100% tuition reimbursement in our prop programThe different licensing requirements for US and non-US tradersDetails about different trading platforms, including Fusion and LightspeedHow profit splits workHow much capital you need to get started as a prop traderRisk management techniquesWhy you need a ‘Forced Discipline’ risk management programPart-time prop tradingTips for avoiding pitfalls that can hurt your trading careerHave a question about prop trading? Call 1-888-998-3548 or email us at info@t3live.com Learn About Our Omega Prop Program
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:What the Fed is saying about inflation and interest rate policyWhat ECB President Mario Draghi could say at Jackson HoleApple’s Hollywood invasionAnd more! So check out these links right now and get up to speed: 1) Fed Sees Balance-Sheet Move Soon as Inflation Debate Heats Up (Bloomberg)Federal Reserve officials engaged in a detailed debate about inflation while keeping the door open for a September announcement on the timing of balance-sheet reductions, according to minutes from their policy meeting in July. Read the Story ==> 2) ECB’s Draghi will not deliver fresh policy steer at Jackson Hole: sources (Reuters) European Central Bank President Mario Draghi will not deliver a new policy message at the U.S. Federal Reserve’s Jackson Hole conference, two sources familiar with the situation said, tempering expectations for the bank to start charting the course out of stimulus. Read the Story ==> 3) Scott Redler Ultimate Access Interview (T3 Live) Welcome to your FREE preview of T3 Live’s Redler All-Access newsletter. Redler All-Access gives you a complete trading plan from T3 Live Chief Strategic Officer and frequent CNBC guest Scott Redler. Continued Reading ==> 4) Apple is bringing a billion-dollar checkbook to Hollywood, and wants to buy 10 TV shows (Recode) Apple is officially open for business in Hollywood. The company is telling content makers it wants to spend $1 billion on its own stuff over the next year. That’s music to studios’ ears, and a tune they have been expecting for some time — especially after Apple hired two top Sony TV executives in June. Continued Reading ==> 5) Amazon Shares Fall After Trump Says It Hurts Retailers (Bloomberg) U.S. President Donald Trump once again unloaded on Amazon.com Inc., tweeting that the company is hurting other retailers and implying that it’s killing industry jobs across the U.S. Amazon is causing “great damage to tax paying retailers,” Trump said in a Twitter post Wednesday, causing shares in the online retailer to fall as much as 1.2 percent in early trading. Continue Reading ==> 6) 7 Ways to be Just Another Failed Trader (T3 Live) Do you want to fail as a trader? Do you want to miss your next mortgage payment? Or pull your daughter out of private school because you can’t make tuition next month? Well you’re in luck! Because we’ve got 7 surefire tips for failing as a trader! Continue Reading ==> 7) Which Came First, The Taco or the Egg? (AdvertisingAge) Taco Bell is getting “naked” again, dropping its usual taco shell for a Naked Egg Taco, where a fried egg is the shell. Folks eager to try it early can do so by reserving — yes reserving — on Open Table. Chick-fil-A, meanwhile, is replacing its breakfast burrito with an updated version and offering a breakfast bowl with either sliced chicken nuggets or sausage. Continue Reading ==> 8) The Maloof brothers made what is believed to be the biggest bet yet on Mayweather-McGregor fight (Business Insider) Gavin and Joe Maloof are so confident Floyd Mayweather Jr. will beat Conor McGregor that they bet $880,000 on it. And if the Maloof brothers are big winners along with Mayweather on Aug. 26, they are giving the proceeds of their whopping wager to charity. Continue Reading ==> 9) What You Should Know About the Pro-Vegan Netflix Film ‘What the Health’ (Time) The recent pro-vegan Netflix documentary, What the Health, is under fire from nutrition experts. The film, which is co-directed by Kip Andersen and Keegan Kuhn—the creators of another Netflix documentary, Cowspiracy—and co-produced by actor Joaquin Phoenix, is being criticized by some health professionals for exaggerating weak data and misrepresenting science to promote a diet that avoids all animal foods. Continue Reading ==> 10) Life Advice from 100-Year Olds (YouTube) Want some real perspective on life? Listen to a 100-year old, because they’ve seen, heard, and experienced more than 99% of the population.
Continue Reading -->US Dollar Update: Nailed It…Again…
In this video update we revisit the US Dollar Index (UUP) as it has been under heavy pressure. Just recently it tested the key $24 level which was the 2016 low and a level we said would get tested based on a simple and objective method. In this video you will: Hear the analysis that got us to this point See how you could have made money off the bottom Find out where this is headed next
Continue Reading -->Sami Abusaad’s Trade of the Week: BUFF
In this special video, T3 Live Black Room Moderator Sami Abusaad walks you through a trade in fast-moving momentum name Blue Buffalo Pet Products (BUFF). On August 9, BUFF exploded higher on earnings, which opened the door for Sami to step in and take a day trade using a proprietary 60-minute Buy Setup. This trade returned $2,288 in profit in 90 minutes, or about half of his total trading profit for the day — pretty nice! In the video below, Sami’s going to walk you through the trade from start to finish so you can understand: Why a pro gap opened the door for the trade How Sami identified where buying interest could come in The entry off the 15-minute chart The power of simple bar-by-bar trade management The moving averages Sami used to place his 2 targets Here’s the video: Click here to learn about the Black Room
Continue Reading -->Is the Big VIX Move Over?
Fear is here, courtesy of North Korea. Just a couple weeks after the VIX hit an all-time low, volatility is exploding as traders start to price in a potential conflict with North Korea. This morning, the plot thickened after China said it won’t help North Korea if it launches missles at the US. However, it would not stand for the US attacking first. Way back in July, I used options to make a leveraged bet on the VIX, and the huge spike in the VIX put the trade in the green. I took off part of the position yesterday just before the equity market close, and will likely close out the rest this morning. At the end of this piece, I’ll outline why I may soon speculate on a VIX collapse. That makes now a great time to go through our 4 sentiment indicators to see if the crowd also sees sunshine ahead for equities. (click here for a primer on the 4 sentiment indicators below) 1) VIX Spread – Bearish The VIX is at 16.57, which means it’s nearly doubled the July 26 all-time low at 8.84. The 3-month spread is at -1.05, which means the curve is inverted and short-term fear is very, very high. (click here for a primer on the VIX spread) 2) CNN Fear & Greed Index – Bearish The Fear & Greed Index is at 31. The F&G Index operates on a 1-100 scale, and a reading of 31 qualifies as Fearful. 3) AAII Sentiment – Neutral The latest AAII Sentiment Survey shows that 33.7% of individual investors are bullish. This 33.7% reading isn’t terribly far off the 38.5% long-term average, and indicates that individual investors are basically neutral. 4) CBOE Equity Put-Call – Bearish The CBOE Equity-Put Call ratio was at 0.88 Thursday, which is well above the long-term average of 0.66. The 3-day moving average is 0.79, which is also well above the long-term average. These numbers indicate that traders are very bearish. Conclusion But of 4 sentiment indicators, we have: 0 bullish (down from 2 last week) 1 neutral (flat) 3 bearish (up from 1 last week In July, the crowd was absolutely nutty. But as we’ve seen many times this year, at the first sign of trouble, fear is getting priced in awfully quickly. The action is quite reminiscent of the April 13 volatility spike when the US dropped a 22,000 bomb on ISIS forces in Afghanistan. North Korea and Syria were also in the news. On that day, the CBOE equity put-call jumped to a whopping 0.96 with a 3-day moving average at 0.81. And as of yesterday, the CBOE equity put-call jumped to 0.88 with a 3-day moving average of 0.77.That dip was very short liveed, and the SPX soon spiked 60 points. This chart shows the SPX vs. the VIX (VIX is the purple line, with the April volatility spike highlighted: So I’m looking to close out the rest of my VIX position, and actually speculate on a VIX decline, likely through VXX put options. (UPDATE at 9:45 a.m. ET: I am now short VXX call spreads, and long VXX puts) To make a very long story short, the term structure of VIX futures puts a downward force on VXX over the long run. Shorting volatility has been the best trade of 2017. But the recent volatility spike likely had traders being forced to do 3 things: 1) Close outright short volatility bets on VIX/VXX puts cover shorts 2) Buy SPX/SPY/QQQ puts and VIX/VXX calls to hedge their short volatility exposure And now we’re looking at an inverted VIX curve and traders likely overpaying for VIX options. Meanwhile, China’s posture indicates that they want no part of a North Korea offensive. Saying they won’t tolerate a US aggression allows them to save face, and seems like a happy medium. If the fear gets ratcheted down, I suspect the VIX will be back in the 10-12 range in fairly short order. I’ll provide an update if I actually make a trade.
Continue Reading -->T3’s Take 3: Nuclear Summer
1) Fear Returns Traders were on edge again today on fears of a conflict with North Korea. Japan and South Korea warned that they would not tolerate aggressions from North Korea, including a missile launch at Guam. News reports indicate that Japan moved a PAC-3 Patriot missile system to Tokyo to shoot down North Korean missiles. Sentiment has been rapidly declining. The CBOE equity put-call ratio hit 0.83 yesterday, which is the highest reading since April 13, 2017. And what happened on April 13, 2017? The US military dropped that giant 22,000 bomb on ISIS forces on Afghanistan, which coincided with escalating tensions with North Korea. And a week prior, the US attacked Syria. As of yesterday’s close, the 3-day moving average for the equity put-call is now 0.76, which indicates negative short-term sentiment. And tomorrow morning, it should be much, much higher, since traders often buy lots of put options when the market drops quickly. Stocks immediately sold off at the open, and volatility expectations went into overdrive. the VIX rose as high as 16.17. putting it 82% above the July 26 record low at 8.84. That put my long VIX options trade nicely in the green. I used the pop to exit a big part of my position. I’ll look to get out of the rest tomorrow, and depending upon what I see tomorrow, I may end up getting short the VIX heading into the weekend. 2) Ugly Action The market did nothing in June, but judging by today’s big move in the VIX, August may be another story altogether. The SPX fell as low as 2444.91 this morning before bouncing, and then driving lower into the close to at 2438.21, down -1.5%. We saw relative weakness in key areas of the market like large-cap technology, biotechnology, and small caps. Traders watch these groups to judge the market composure. High-yield, regional banks, and materials ETF’s also took big hits. This implies that traders are fearful of the overnight news flow. Meanwhile, “risk off” instruments like US Treasuries, silver, gold, and utilities stocks performed well, with the Vaneck Vectors Gold Miners ETF (GDX) rising 1.6%. In early June, my colleague Jeff Cooper delivered compelling analysis on gold, saying the folowing: The breakout above $1280 is confirmed by trade over $1295, which issues significantly higher projections which we will detail before the weekend. At the same time, a close in gold above $1285 and especially $1295 on the important Friday weekly closing basis validates the idea of a new leg higher. Gold is now flirting with $1295, so keep an eye on it. If Jeff is correct, we could see a major rally. 3) Scott Redler’s Take: 75% Chance of Stormy Weather This afternoon, Scott Redler appeared on CNBC’s Futures Now Show to discuss the market’s recent breakdown. He estimated that there was a 75% chance that we’d see more trouble ahead. In terms of specific market levels to watch, Scott said it was important to see how the SPX and QQQ handled their respective 50 day moving averages at 2455 and $141.35. Both levels were lost today, so it’s clear that the bears have scored their first real victory in quite some time. Click here to watch Scott’s segment
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