Hey everyone meet kevin here in this video we're going to talk about the small cap rotation, how all of a sudden everything's going green and whoa whoa whoa. It seems like oh, my gosh, the rotation's here hold on a second i'm going to show you a strategy that i think is very very important to make sure we're not playing mr dead cat bounce over here and to make sure that we can potentially take advantage Of as many attendees on the upside, while limiting our risk to the downside on some plays we're going to talk about that and this madness going on in the stock market. This delayed santa claus rally coming today with most stocks green. Today, i'm going to talk about that in just a moment, right after i mentioned this, video is brought to you by moomoo, linked down below in the description for more information, but more on them later.

Okay, folks, take a look at this right here. Oh, my goodness, i want to go shopping and, as you know, i always send every single buy, sell alert like i did this morning, just like i did yesterday and the day before to everyone in the stocks and psychology of money group linked down below take advantage Of the new year's coupon code by the way get that tax deduction right before the end of the year, we're making this a 48-hour sale. It is going to expire at the end of the day on the first but you're better off. Taking advantage of that today or tomorrow, so that way you could write it off, which means you're getting 41 percent off, plus a tax write-off.

You know that's like getting a lot of percentage off so check that out down below, but folks look at some of this rotation here. We've got shift technologies up nine percent uh neo up eight point: four: six percent, as sofi is up eight percent arcimoto's up. Seven percent the high short interest companies are rotating up now. Yesterday in our closing live stream, we noticed something really interesting and what i noticed in our closing live stream yesterday was actually something that helped me diamond hand and people always wondering like kevin.

You know why why watch the market all the time why you always got your eyes on the market? Why are you always trying to figure out exactly what everything is and that's going on? Well? It's because the trend i noticed yesterday made me not want to sell my small caps. Why? Because i noticed that shorts on most of the small cap companies were either flat in the last few days or rotating down the only place. The shorts were actually increasing. Their bets was against kathy wood, but that's a separate issue.

I think that's more just because people are mad at kathy that she has the limelight, even though she's having a not that great year and it's easy for everybody to beat up on her, which i really admire kathy. So, that's aside from the point, though, what's more important is that shorts were flat or rotating down, which, in my opinion, is an indication that the market is starting to indicate, maybe we're starting to approach some kind of bottom for smaller cap stocks or stocks that have Substantially oversold and been highly shorted remember the the four stocks that i mentioned, particularly that could move under very high short interest in excess of 28 percent, are shift technology lemonade, a corsair and tattooed chef like them, or not, they're likely to move because they've got a Substantial amount of short interest and there's going to be a lot of short covering once the market is convinced that the pain of december is over because december has been a nasty bloody month. Look at sofi technologies. We've been bouncing around that 1470 support line literally all month, and since you might not believe me there, you go there's your 1470 support line.

We have been bouncing around this since the 3rd of december. It's been painful now. What is what we want to pay attention to to strategize in this market? Well, what i'm going to do is i'm going to pull up shift technology and i'm going to show you something that i think is really really important to make sure that you maximize your profit, but also potentially minimize your risk on these. So, let's talk strategy for this, but first a quick message from our sponsor moomoo moomoo is an app that helps you trade, like a pro it does this by offering powerful analytic tools, commission, free trades and reliable order, execution, moomoo's, technical analysis tools are really easy to Use and super helpful, especially to retail investors like you and me many sites charge for the information that moomoo offers totally for free.

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Okay. So, let's talk strategy now that we talked moomoo, let's talk strategy, so take a look at this folks shift technology. It's up ten percent, but look what i did here folks. I drew a couple very important lines.

The first line that i drew is a bottom. I just drew this. I threw the bottom at roughly three dollars on shift, but i also threw an upper bound and the upper bound is really the intraday wick highs of the stock over the past rally days that it's had because we've had these exciting 10 percent movements before but anytime. We've had these movements before they've been dead cat bounces we've come right back down, we've had little fake outs of green days little fake out rally over here.

It's been painful. Now i don't own any shift technologies right now, but here's my strategy for this, because i do think that shift is substantially oversold, just like many of the other small caps. My strategy, right now on a day where it's up uh 9.7 or what are we at 9.74 right now, is to wait and i'm going to show you exactly what i'm waiting for. What i'm waiting for is a breakout or hitting this line and then breaking past.

This upper line here, because this upper line right here is drawn at 3.64, now yeah. That does mean you potentially gave up this 20 difference here, but that also implies that you were perfect and able to get it at the bottom of three dollars and four cents which, if you're buying at any point thinking you were getting the bottom price. The odds are you were wrong. You were not paying the bottom price, you were either buying it when it turned green again, in which case you're not looking at it 20 that you missed out on right.

That's all fomo crap anyway. You can't think like that, or you were getting a worse price, so my strategy for for not just shift, but many of the companies is wait for a breakout to where we finally start breaking out above the prior intraday rallies that we've had now an easy example Of this, in my opinion, is going over to visa look at visa stock and look at that breakout they had, and this is the kind of confirmation you want to look for. So you see the bottom right here and how we've had these little prior mini rallies. Here - and this is in november, we really officially broke out around here december 6th, even though we had some other soft days as soon as we broke this down trend and actually closed above right here on this candlestick as soon as we closed above this high right.

Here that intraday candle wick high, we started really actually trending up again, in fact, that's exactly where we had our ema 20-day reversal or or inflection point back to the upside, and so this is more of the swing that i want to get, though i think, on A lot of these small caps, because this is visa - the the reversal - is going to be a lot more substantial than this and potentially a lot steeper if we do go into a rally mode. So my strategy is going to be the following: i'm looking at a break of shift technology above about 3.67, if we break above 3.67, so let's say we get a nice candlestick above 367., it looks like we're in rally mode. We don't have a lot of negative catalysts other than you know: random, miscellaneous fear for things like uh, oh inflation reports coming out or the fed talking at the end of the month. Whatever at this point, it's like really are things going to be that different from from what we had last month, probably not we're not expecting rates to get bumped until march anyway, because we're still in the midst of the taper.

But anyway, we get a bump and a break over here. What i'll probably do is at the same time as i set my buy i'll set a stop loss. So basically that means when you make your buy, you can also set yourself uh. Well, we could go in here.

We could set a cell, we could set us a trailing stop limit. So after you buy the shares, you could set a trailing stop limit. Let's say you bought 100 shares and you bought them at 3.67 cents. Well, let's set a trailing stop for 25 cents and then now, if we go from three dollars and 65 cents, where let's say we buy it or just to make math easy, let's say we buy it at 375 right here, because we got a little breakout.

You buy it at 375., you set a quarter, trailing stop now. If, for whatever reason it drops back down to 350, it automatically triggers a market order and you sell a new gtfo, make that obviously a good to cancel instead of a day, and you know only a day in force, so uh, unfortunately, with trailing stops. Some brokerages actually require you continue to reset these, so there's a little bit of maintenance that can be involved in this, which is a little bit of a pain now. The reason i'm going to use the trailing stop at first is because i believe, if we break out what we're going to have is probably this momentum for a few days where we go green, green, green, probably a few first few days, i'll go trailing stop until, Let's say we get to like four dollars and fifty cents or five dollars at that point, i probably won't have any trailing stops continue because i'll have plenty of of profit in there.

I just want to minimize my loss in the event that we go back down to three dollars, so, for example, i enter at 375. I set its 25 cent, trailing stop i'm out of there at 350. If we end up going back down to three dollars that floor, that we have drawn here or worse right, i'm trailing stopping out of the uh, the small caps basically, but if we get a breakout, i also don't want to break out to like four dollars and Fifty cents for five dollars and then just have a brief moment where it goes down 25 cents or inch hour or whatever it goes under 25. It falls 25 cents with a trailing and then gets stopped out at 450 because i want to ride it back to you, know 650 right, so uh, probably not going to use a trailing stop long, probably just won't have any limits.

I mean i could have a limit, but usually i don't like keeping limits or open because they're kind of harder to track a recommendation i have is anytime. You have shorter term trades that you need to like get in and out of especially shorter term call options. Keep a little sticky note on your computer screen or something like that: keep track of your short term trades and things that you're trying to get out of uh or or that. Well, you know you don't want to continue to lose money on if you're diamond handing it obviously doesn't matter so much so anyway.

That's just an example with shift, but i'm going to do the same thing with sofi, except what i'm looking for at sofi is probably a break above closer to like 17.. That's going to give me a little bit more confidence that we got past and we actually break through with a real rally on something like sofi on lemonade. Lemonade's been an interesting one, because we don't actually have a solid floor here. In fact, the lowest point we had was 3920.

We really broke that 40 floor, which is a much more solid floor, so maybe we could call it a forty dollar floor and if we do call it a forty dollar floor would drop that right over here uh. I would say we're probably looking at wanting to break out to at least fifty dollars before considering a re-entry over here. I know we're at 40 uh 42 right now, so there's there's quite a bit of profit to be had between there and 50 about another 20 off of already being up 7 today. So i might consider dropping that down uh to like 47.50, but the only way i would go into lemonade is if, at the same time i was breaking on shift technologies which you can see now is i mean we might be heading there today.

It's up 10.2 percent, so anyway uh i would. I would use multiple of these as a test. So if i get so phi over 17, i get shift technology over 375. I get lemonade over uh 47 and i start breaking some of these pain thresholds.

Then that could be an indicator to me that okay uh it's time to go in and then set those trailing stops and simply trade. This i'd be willing to go and margin on this only for a trade uh, and that's because i would set a trailing stop and i would be getting out of it, no matter what, if we dropped uh and it looked like, we were heading back because you Have to be careful, you could have a dead cat bounce and that's why look? We've got this 26 dollar floor on draftkings over here. Where do i? Where do? I think, we're going to get that official breakout? Probably not that confirmation, until we get to 34., see that same kind of channel but again we're at 38 right now. So i wouldn't.

I don't like i'm sorry we're at 28 right now, uh 34, going from 28 to 34. That's 20 right! So i don't necessarily want to say you want to wait all the way until this potentially on draftkings, just for example, you might draw that to like 31, but again i would only make that move if i thought all of the other ones like shift and lemonade, And the other smalls were also breaking. Let's do one more. Let's do a pinterest for giggles over here 34 buck approximate floor.

I probably don't want to touch pins until somewhere around ideally like 41.. Now this one's closer see 41 divided by where we are now. I'm not so worried about that 10 there, because i don't need to pick up that 10, because it's entirely possible that tomorrow we're just red again and we go back down to the floors. So i don't want to get too excited on a green day to hop in here until i have that confirmation that you know, okay, the pain is over we're going into that january effect rally.

So i want to wait if i get breaks on all of these think lemonade shift technologies, pinterest draftkings, maybe even corsair - that's another one or tattooed chef right, although corsair is moving a lot slower here. Uh we do have an upper line here at corsair about 2270 tattooed chef. We get breaks on all of these. A tattoo chef probably has to break 17 right.

If we get breaks on all of these, i think it could be a sign that we could see a substantial rally in uh in small caps, and i don't think the rally would be even remotely close to over, because if we get that kind of movement and All of a sudden people look at the charts and then they see a lot of this that inflection point. You know how this market works. Folks, as soon as people see stuff, that's green and you see that inflection point uh. Then people start piling in and then you can get that exponential growth and you can get some some doubles right.

That's what you're looking for like a shift technology come on, like i buy that at 375., let's go where's, my double. I think we can get to 750, get a double and then get the heck out of there. You know people might front run it at right around seven, but i'm down to play a trade on these uh. But again i don't want to get caught up in the dead cat bounce and that's why i want to wait for confirmation on multiple of these smaller caps before i make a move.

If i make a move i'll be going into margin to make that move, but i'm going to do it with the trailing stop so that way i get the heck out of there now 25 cents on 375. Just so you have a percentage-wise 375. That is about 6.6 percent, so some people like to set 10 trailing stops i'll, probably be there at like six or seven percent uh for trailing stuff. Just so you could apply that to different stocks.

If you want to obviously not financial advice, if you want all the alerts for when, if when, if i make any of these moves, uh do consider getting that tax write-off use the link down below use that coupon code new years. It expires on january 1st, at the end of the day, we're just trying to motivate folks to take advantage of potentially an end of the year tax write-off consider checking out those programs. If you look at the price of the programs, you take off the coupon code and you take off a tax deduction. It ain't bad now check with your cpa to make sure that you can write this off, but do check out the programs keep in mind.

The wealth course will be going up the most substantially uh in january, and that's because right now it is in pre-sale and there's no content in the wealth course. That's the path to wealth course. That's different from stocks in psychology money, but of course you could bundle these okay folks, so uh. These are some strategies i would say the same is going to be true.

If we look at something like a palantir except for pound here, i'm probably looking for a break at right around the 1950 or 20 dollar level, but palutear, i think, has a pretty well defined floor right at about 18, maybe 1790. For so for those of you wondering about a palantir floor, i'm going to go with about 1790 here as a potential floor and then i'm going to put a little lid uh. I probably want to be right around 20 bucks. I think that's a psychological threshold.

That's not really that good in terms of lining up with the wicks over here psychologically, the 20 dollars makes a lot of sense. It hits a lot of bottoms over here, so i'm gon na go with 20 and i'm going to be looking for those breaks and that that could be a great indication, a good tell for uh some movements on recovery. So i'm happy we've got green, but you always want to be prepared folks. This literally has been the market of convictionless rallies where we run and then we fall keep in mind.

Folks tomorrow is also the last day of the year. It is a full trading day, which means we could. We could very well see some leftover loss taking tomorrow and we see some leftover laws taking tomorrow. We could see some red after the screen, so i don't want to get overly excited yet on some of these smaller cap companies, another smaller cap company, just for reference for those of you who make it to the end of these videos.

Little bonus do watch erj. Folks, i think erj is a much better deal than the eve spack. Okay, compare market caps you'll see why i might make a separate video on them. I might not no guarantees okay folks.

Thank you so much for watching this video good luck out there. I love you and we'll see you soon. Bye.