What's up everyone? All right? So back in the Sal here on Monday morning, but unfortunately a second red day in a row down 3,200 bucks. So right now we're definitely seeing a shift in momentum. whereas last week and the week before and week before that we were seeing this kind of exuberance. these big big moves that were not logical, but that were fun and so we were able to profit from them and do really well.

And the thing that's interesting is when we're in the market, the type of market where we're seeing these exaggerated moves, we know that it's a reflection of the emotion. traders are feeling that fear of missing out in the greed, wanting to get a piece of this next big opportunity. And so what often happens is instead of stocks slowly rising up, they just start going from, you know, $2 to $6 They just go straight to the moon as traders scramble to get a piece of the action. But what then starts to happen is the more often those stocks come right back down.

Short sellers become faster about taking short positions as those stocks are squeezing up, Recognizing the eight of the last nine came up and they went all the way back down. And so when that shift happens, as we've seen in the last couple days, stocks that start to pop up get slammed right back down. So yesterday or Friday and today the stocks I was training I jumped in at the same places that I was getting in two weeks ago in a week ago and the same setups that we're working. really, really well.

But now the emotion has changed a little bit. Now you're seeing more of the the FOMO on the short side where short sellers see this as an opportunity they don't want to miss. and so before waiting for really good confirmation, they're just getting in short And so that puts a ceiling on some of these moves. And the sooner we start to see those ceilings, the more difficult it becomes to just jump into these stocks alongside.

And so what we now have to do is switch gears and wait for the first pullback. So instead of just giving in to that exuberance and trying to ride the momentum, we have to wait for the stock to pop up and then pullback sustain that level and then get in for the next move up. And that's where those early short sellers will get squeezed out because the stock will continue higher and they get stopped out high of day which would be their max loss. So for us right now, in order to have a stock pop-up pullback and go higher, it needs a valid catalyst.

It needs some type of news and so all these stocks are popping up and then dropping down a little bit and don't have any headline, they're just going to continue to drift lower and they're not going to hold up. So right now we do have to pivot a little bit switch gears. The momentum can change very quickly. to read.

days in a row is definitely a red flag for me to slow down, but things will improve and right now it's just a matter of sitting and waiting for those good pull backs so we can buy them up and ride the second wave up. Alright, so anyways, we'll break down all of today's trades in today's midday market recap. All right. So we're gonna break down the trades from today second red day in a row.

Certainly not when I was hoping for here on Monday I was really just hoping to get to UM You know, good size, decent little scallops out of the gates and start to rebuild a little bit of confidence. build up my cushion a little bit after the red day on Friday but that is not what happened today. A second red day in a row down 3,200 bucks I think this year I had three red days in a row in February which I would I think currently be kind of my high record for number of consecutive red days. It's not a record that anyone's trying to to set for themselves, but I think that's kind of where I'm at now for my 2018 and you know, like I said, a little bit of a disappointing day.

It's not what I was expecting, but one of the things I was just talking about in my midday recap intro video is the ebb and the flow of the market and the fact that we have these these shifts Where let's just say, look last week, for instance, what were some of the stocks we traded cally? look at this Doc Hallie this stock on what was it last Thursday or something like that I mean it squeezed from four dollars and 60 cents up to six. twenty. Two days before that, it squeezed from five dollars all the way up to Eight dollars and Seventy Seven cents. That's what we call exuberance.

That is a stock. this just trainers are piling into it. They don't want to miss the opportunity and so when it starts to squeeze, they're jumping in. Now here's the thing.

this stock did not hold up very well. You know it hit a high of 877 and an hour later it was back down in 533. And so just as long traders saw this as a little bit of an opportunity here to get in at five and sell it in eight short sellers saw a very clear opportunity on this to short it at eight and cover it back down at, you know, five, five, seventy five thirty. So there were clear opportunities on both sides and this is in contrast to stocks that squeezed up, pull back and then go higher.

So last week we saw a couple of other stocks. good look at DXR as an example this was back on. What day was this at some point last week see, this one squeezed up pretty dramatically from 10 to 12, but it kept going. It went from 12 to 14, from 14 to 16, from 16 to 18 all the way up to 20, pull back and then up to 24, 20 or 21 dollars.

So this is an example of a stock where a short seller may not see as clear of an opportunity because the thing just kept going up. And so that's what creates the exuberance for long biased traders. When stocks do this type of thing, we just as long traders want to get a piece of the action and the next stock that starts to open up, we're gonna be really quick at jumping in. And not surprisingly, the next stock that opens up.

Short sellers are gonna be a little cautious about shorting because you know LDX are yesterday. went from $8 $20 I don't want to get squeezed out so maybe I better be a little more careful. You look at it on an extreme level of LF I n back in November from $20 or from 16 up to 26 and then the next day from $35 up to a hundred and forty two dollars a share. That definitely puts the thing of the fear into short sellers eyes.

So these are stocks that can spark really strong waves of momentum where the next stock that starts to open up. Traders are superfast at, you know, just jumping into it and trying to ride the momentum. So here's the thing at a certain point, jumping into the next stock that starts to leave the station, the next train that leaves the station stops working when they don't have true catalysts and they don't have really good daily setups. and what starts to happen is you get these false brakes where stocks start to pop up and then they get quickly reversed and they drop back down.

And that's kind of what we saw on Kali on Wednesday or Thursday of last week where you know, yes it popped up, but it's not holding those levels at all and that starts to become a little bit of a target for short sellers and of course long traders. Some of them start to get burned because they're buying a little bit too high and and they're getting they're rolling over. So that's kind of the beginning of the shift and today we almost I would say today and Friday we really saw the the peak of the shift. So on Friday BGI this is a stock that I traded right out of the gate I Got in at 260 and look what happened I mean not more than a minute later it was back down at a dollar 60 it got totally rejected.

Cdna on Friday I jumped into this at $8 and seconds later it was back down at $7 So these are very quick rejections and they are not continuing on the second leg higher. they're not continuing to move up. The exuberance is sort of starting to wear out and traders are now feeling more fearful about buying because jeez, well, what if this happens? And so today Oh Jen It hit the scanner I jumped in at at $2.95 which is the same type of entry I would have taken last week and a minute later it was back at down at a dollar 89. So boom, a 2000 dollar loss And then we had a couple others hit the scanners that I didn't take tik, it hit the scanner.

It popped up to $3.95 and was back down at two dollars and 30 cents. Five minutes later, big rejection, Another one SGL Be it pops up to a high of a dollar 84 and then drops back down. You know, right back down to a dollar 40. And so the more we see these types of rejections, obviously, there's barely even an opportunity to make money.

On the long side, these are the type of stocks that the short sellers are going to jump on. and in a sense, they're gonna see a stock hit the high damo scanner and they're gonna prepare their order to short it because they're thinking okay, look what happened here here and here. this thing I'm just gonna short it how it and that will work until it doesn't it'll work until you have one of these the taps of dollar 90. It then pulls back just for a little second, a little bull flag, and then it keeps going higher and it goes up to 2, 10 to 20 to 30 to 40.

It squeezes out those early short sellers. It gets halted on a circuit breaker to 50. Resumes at 280 goes up to 290. Three dollars more traders jump in.

Next thing you know, it's at 310. Halted again, Resumes higher: 340 350, 360. You know, tapping for dollars and then maybe rolling over, pulling back. And if there's a good catalyst by the end of the day, it'll have to hit six or seven or eight dollars and that will start the next round of momentum.

Day two: Maybe it's gapping up and goes up to 10 or 12 dollars. That's the same type of thing we've seen, and so right now we kind of have to wait for that set up and you know we can't We can't predict when it'll happen. We don't know it could happen tomorrow. It could happen in this afternoon or might not happen for another week, but when that happens, that will most likely trigger the next round of momentum.

our. kDa Another really great example. This stock definitely helped fuel the massive momentum that we've seen in the last couple weeks. So for me, the way I trade these and I trade this both as I'm trading the actual stock and over the course of a day.

So as I'm trading these actual stocks I look at them and I say okay, you know I'm gonna keep buying it for a move higher I'll keep buying the pullbacks to try to scalp for the next leg up and I just continue to do that until I have a loss and then once I have that first loss I usually say all right this point I think I'm gonna go easy and maybe just be done with it and maybe I go in for a second one. maybe I have another winner, another winner, and then another loss And at that point I'm like, okay, this is no longer as easy as it was before. Well, I do that on the same level on a daily level. last Monday I made $9,000 Wednesday I made 15,000 Thursday I made 4,000 All right.

So some really big days and then on Friday I lost 11 grand a pretty big red day and here on Monday I'm down 3,200 bucks. So now I'm starting to say okay, I pushed it as long as I could I was aggressive for as long as I could and now I'm seeing that the tide is changing and I need to be able to step out of the way now. I can continue to step up to the plate and continue to get slammed back down, but that's not smart for my account Today I gave it a chance on two other stocks. Same reaction basically as Friday and so now it's time for me to pivot for me to adjust for me to seek shelter from the storm, be a little bit more conservative until we see that next stock pop up and hold its levels.

Holding the levels is so important because it's what shows us that there either is a hidden buyer that is absorbing all of the short sellers. So yeah, some people are shorting it thinking it's gonna go down, but it's holding right up there. someone else wants to buy it. Usually that's because there really is a strong catalyst.

or for whatever reason, there's someone that's really you know, bullish on the stock. and then it starts to move up and more buyers come in. And that's what creates a second leg. So that second leg up that second, basically the first pullback and the second move up.

That's what's so important for us to see right now. and we certainly didn't see it on Tik. Obviously, we didn't see it on Oh Jenny we didn't see it on S GLB We really haven't seen it on anything today, and that is just kind of where we're at right now, so we need to be a little bit more cautious. And if that means sitting on my hands for three or four days and only trading with 2,000 shares until I start to see the follow-through that's fine.

It's better to trade with 2,000 shares and to trade with 10,000 12,000 and keep losing 15 20 cents. So under my trading here, my warnings: I'm gonna put this down too I'm gonna put it at five thousand and one share. Now you might say, Well, jeez, Rust, you're down. You know, fifteen thousand dollars in the last two days? you're not gonna be able to make that back with five thousand shares.

And that's true. I probably wouldn't be able to make it back with five thousand shares. However, the instinct to try to make it all back in one trade is very dangerous. That's what can get you into a really big hole and I certainly don't want that to happen.

So let's look at my stats here for a second. So these are my trader view stats for well this is two thousand I Guess this is a pretty long period of time, but let's look at. let's go to detailed and then we're gonna look back down here. This is the equity curve.

Alright, so you'll see here. You've got the move up and then a little bit of draw down. A little bit of draw down and you don't just bounce right back up. You slowly regain confidence and then this right.

here is a window where the market was choppy for probably like two weeks, Two and a half weeks, and then it opened up again. Right here in the middle of that, we had a couple days of choppiness right here. about a week of chop and then it opened up again. Here we had like a month of chop which was the month of February and then started to open up again in March.

I'm up $30,000 in the month of March so you can have longer periods of sideways consolidation as I've experienced. This is like a six month period where I was making money like $5,000 a month, but I wasn't having really really big wins. So you can have periods like that which are not uncommon, but then what you want to do is avoid giving up profit. It's better during this period to trade with small size and just sort of be churning, making enough to cover your bills and to get by, but not taking big risks because you know it's not the right market environment to take big risk and then once start things start opening up here.

This is a place where we start to see the market open up and so that's when I was like okay, I'm recognizing that things are opening up. It's time for me to put the pedal to the metal and get aggressive and Boom! That's how you have a couple big days little chopped, little chop things opening up again. I'm getting aggressive again, aggressive again and now through here things were slow and then as we started to open up, I started to get aggressive and right now it's just kind of looking like this is just sort of a little bit of a smaller wave up than the ones that we had back here in November and December in 5 min. January So a little bit of a smaller move up here in March A little bit of a pullback and it might be a little bit of a grind here.

You know, for a couple of weeks we'll see I mean it's really, it's not seasonal. You know some people will look at this and be like, well, that was the month of February and so next February is gonna be the same way. It's really not like that. it's not seasonal.

it's cyclical. So we we see waves and cycles, but they're not tied strictly to the seasons. They're really connected more to how long ago did we have a stock that pulled a Lfi N and went from you know, a dollar to 144 dollars a share? And yeah, Nate we will see some sector rotation in that sense. We'll see the shipping stocks that they were really strong at one point, but then they've kind of been out of play for a while.

We've seen Biotech so they'll be really strong at some point and then they start to slow down a little bit and you know it's it's the ebb and flow. But anyways, my other trade today was on T.o.p s it into this thinking that we were gonna get a breakout over 250. You can see right here. we had this consolidation but ended up being a false breakout.

250 was the high a day. couldn't break that level and so just came back down. So false breakout here. False breakout here.

You can see it on the 5-minute false breakout so no love and I should have maybe been a little more conservative on that one. but I thought that if it opened up ahead potential and yeah I guess I was I was wrong. So anyways today is my 54 let's see 54th trading day of 2018 down $3,200 so a little bit of a bigger loss and I was hoping for I've been good this month about keeping lost as small up until Friday and again today. but again to make $14,000 in a day last Wednesday our to make $9,000 in a day like last Monday you have to take a little bit more risk.

you got to step up to the plate and I certainly did that. but I just you know eventually you will, you will strike out. So a couple misses there Friday and today but I'm just gonna pivot adjust a little bit. We're getting ready to leave this week for our Inner Circle seminar, so I'll be trading from the seminar on Thursday Well, I guess just Thursday Friday is a market holiday so be a little bit of a short week this week, but we'll see if we can try to finish this week in good shape.

I Would like to set the personal goal for myself that I'd finished the week green because then I'll be green every week of this month, which is a nice goal to set. even though I lost 11,000 on Friday I still made 20,000 last week and being down 3,200 today with three days left in the week I still got I've still got time to to redeem myself so you know hopefully I'll be able to, but at the same time, there's no reason to get bent out of shape if I can't because I know potentially two weeks from now I could have a 3040 thousand dollar a week, right? Once things start to open up again and I can be aggressive, we can have some really great weeks. Nick The reason I didn't take the bull flag on tops was because I just didn't trust it after the choppiness in the one-minute pattern. So oftentimes if a stock is really choppy on the 1 minute timeframe, I'll just kind of feel like it's not worth trying to trade the 5 minute.

so on that one you had three doji candles in a row and I just thought it. it wasn't wasn't likely to give us a good move. so I got to add my moving average here again. For some reason, my 9 EMA got dropped off my chart.

Alright, so there we go. Love to make it a little bit thicker. so yeah, anyways, that's about it for me today. I'm not gonna push my luck I'll be just kind of done for the day and back at it first thing tomorrow morning.

Alright, so see you guys in the chat room tomorrow morning I Hope you guys have a good afternoon and get a little bit of rest. Study a little bit and we'll see you in the morning if you're still watching. You must have really enjoyed that video. So why not subscribe and get email alerts anytime? I Upload new content.

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