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Welcome to this week's Market Rapid Recap and this week we're going to be talking about earnings. It is April 23rd 2015 and there are a lot of earnings that have been happening in the market so that's what we're going to cover.
We’re going to to talk about the market, how it is a big picture and we'll just talk a little bit about earnings and also a few stocks. I'm going to try and shorten this Rapid Recap down.
Lately they've been about 30 minutes long but I’ll try to get it back down to about 15-20 minutes at the most just to keep things a little more condensed for you all so that way you save some time.
If we take it out to the weekly it's a little bit easier to see guys. Looking at this trend line right here we’re drawing our line across BOM stock takes it out heavy volume. I’m also looking at a couple different things if I look at this overall picture, take a look at this overall line of volume increasing each time so that's also something that I don't like to see so that creates a great short opportunity.
If we take it to the daily, notice this was the weekly. So this was in 2014, in the daily here’s the pattern right here every time 1, 2, and 3. First one 2.3 million shares, next one 2.5 million, next one 3.8 million so here was our move if you were looking at this chart right there, look at the volume here look at this heavy volume stock came back up to retest that level retested it and then sold off.
Next day same thing stock sold off move back up rejected it. This one was more volatile so again in just a few days you have you know 5 to 6 bucks of gain even if you're waiting for that safer clearance right there so even though it sold off after earnings about 43 to 53 dollar, really is a seven dollar gain, here five dollar gain depending on where you entered it.
Even if those three dollars it’s a clean run, the setup is clean so it looks good for lower prices for the time being especially if you take it out to the weekly just some key signs.
It is a shorter timeframe play because the stock has been powerful. Now the other thing I'm watching is that the projected move from this stock those of you that know the projected move A to B should equal C to D, the projected move it has been hit.
So when the projected move is hit something else happens digestion consolidation or a little sell off where we can get to somewhere around this region, nothing be wrong with the stock we can have a fifty percent retracement, 50 percent sell-off and then the stock can power higher. So what am i doing? I'm capitalizing on a potential move.
It could be a potential move where the stock only goes down this much, right here where the stock could actually just go down a small bit but in this small bit that’s 150 points. Relatively speaking that’s small for this stock. So where can it go? Healthy retracement for a stock like this or any stock 50 percent, draw the Fibonacci, 50 percent will bring us back right here.
Look at this level this is in the Fibonacci section, comes down to your right here. Let’s do the daily, daily will bring us back fifty percent right here 487. Look at that, how it hits that level really nicely take it out to the weekly look at that line right there, let me bring this down look at that from the lows here to the highs here fifty percent comes right there isn’t that beautiful?, great setup.
We have these two positions on short, I'll show you what I have long, we got CSX notice this descending trend line you might be wondering why did I get in it, what was I seeing? Well first off descending trend line is what we see. When you see the descending trend line then you’ll also take the stock out to the weekly.
Now we are in the weekly so take a look at this. Looking at the week lame you can see that the power move has been higher small retracement and again what can happen from there well now we can power higher. So you are waiting, you are waiting for that consolidation period.
Here it is, BOM move higher retracement power higher. Looking at earnings, earnings were, the 15th right around this volatile area so even after earnings that stock moved higher and there you sit patiently you don't chase but notice this volume.
Volume came in look good. Stock rejected those prices this was our descending trend line right there so looking at it on a thirty minute stock rejected it, wait for that confirmed break, right here is your entry point. Solid game for a dollar and fifty win right there.
You don't capture that entire run but it's a great setup, great trade heading in the trend line take half off. You know if you had a thousand shares BOM made a dollar thirty on that thousand shares. Very simple very clean-cut trend line, very good setup and look good for higher prices.
Ten thousand shares again you know dollar and thirty run, great setup and you can't go wrong with it. Then finally we got IBM those of you that have been following me for a while and have been following the critical charts you know that I watch this one closely, big blue IBM.
It’s typically where IBM goes, the market goes. As one trade’s large it's a point two million shares on a day-to-day basis, eight million, five millions on average so the trade is huge and we've been watching this one and I've been shorting this one a lot of times when it comes to this trend line level that is because of the overhead supply.
Now what's been happening after earnings, after earning sometimes things evolve and do something different. Also since we've been shorting this one when it comes up here it popped here then we sell off. Pop here couldn't even get high enough sold off, popped here again sell-off, popped here and again a sell-off.
Even if you got in at those points three or four times you would’ve made let's say three dollars there, six dollars there. Let's just say got in here six dollars there, so that’s twelve plus three that's 15 and then here again another ten dollars that's 25 so that’s twenty-five dollars that you would have made just from shorting the stock from this little move.
After a while shorting the stock time and time again you have to be cautious because we've digested first five months or so and the longer you digest the more that things build energy. As energy builds things could go to a different view, a different side. So when you see the earnings notice this, broke us out of that little our resistance line.
It didn't have enough juice to take a higher, sold back off tried to get higher again, didn't have enough juice and then the next day got in BOM stocks skyrocketed, so what happens here. So here it is so when you get into this trade you get into this trade right after that break 165.40, 165.60 right there on that break.
Stock didn't have the follow-through sold off. You got stopped out first day you got stopped out, next day got into the stock and stock coming back here stop again, you're risking a dollar to make potentially to 178, right? So that’s your potential, that's a conservative potential so we're looking for 178.
Taking it again getting closer view stock went above it you’re in it holding at that support and then the stock broke out. Broke out with heavier volume and then you let it sit and ride but on this trade you had one failed opportunity and with the failed opportunity sometimes that happens you get stopped out and try again but you got to remember that you risked one dollar here, one dollar to potentially make all the way to 178.
The potential reward from 165 to 178 is at 12 let's just say 10 dollar move. So if you had a thousand shares, ten thousand dollars pretty simple run right there, risk to reward so you're risking one dollar to potentially make ten. So you could have been wrong ten times and if the run worked out there you go you would’ve been ahead.
Those are basically the positions that I have, that's the way I’m trading at the moment. I don't like to trade fifty different stocks it just ruins your focus and your mentality you know as new opportunities arise they may rotate some positions but you know we got Yahoo who short right now working out fine you just sit and hold it.
We got CSX to the long, we got IBM to the long and we got CMG to the short. You know going to watch how things come into play with Amazon at this level let me just delete all the drawings here for Amazon.
I'm going to look at Amazon right here on this level to potentially go long if more volume picks up as you can see right there and that is only if it clears that level if it doesn't clear that level then it's a potential to actually short the stock if it rejects that level because that's a very key level.
You can see it rejected it played around within that region for 1.4 months so it consolidated right here. So there's a lot of energy there so if it doesn't break through they can't take them higher, it’ll break them down lower so we will short it if it rejects it and gets to that level but for the moment no need for me to trade it because the potential to make just four to five dollars on the trade or that stock and sell off to 340 it's just not worth it.
We’ll look at Google as well; we'll see how this one trades. This one I like to give a little bit of time to digest because it's a little more volatile, again we're looking at a couple different things here on Google specifically here this line right there to see how that gets into that, how it clears in to that and we’ll see how that plays but again no position on Google, no trades on Google.
Facebook you know this one took it lower, if it breaks below this eighty dollar level. Let’s right here 80.51 heavy volume if it continues to accelerate it could be a good potential short opportunity. Again something to watch for the stock has had a huge run but the volume take a look at this volume contraction right here descending.
So if we start seeing a pickup in bearish volume to the upside like this we start seeing an increase of bearish volume it could be a good opportunity to short that stock at least for a smaller time frame, for potentially right here for something like this, for one point eight months so holding the stock for one month to two months and that could give you 13-point run, sixteen-point run in the stock, 16-point run is a great run.
There’s nothing wrong with that especially with the highly liquid stock. Highly liquid stocks I love trading them. 73 million shares I mean you can get in and out at these very easily. Same with like a CSX 15 million shares traded so it's very easy you can put on 5,000 to 10,000 shares and you know nobody really sees a thing.
That's what the big boys like; I like those stocks as well just because it's easier rather than trading smaller companies that are a couple dollars that barely trade anything that barely trade any liquidity. Let me show you what one of those looks like.
Let’s just put up the US common stocks you can look at TC 2000 the US common stocks it'll show you will do volume store and you can see some stocks that don't trade a lot of volume. So here are some stocks that don't trade a ton of volume you can see the two dollar they barely trade anything, just look how choppy their charts is.
A stock that trades 400 shares, a thousand shares you know just look at these charts. I mean where do you trade this one, It’s up at twenty six dollars it’s down at eighteen dollars. I mean how do you trade these things, I don't know so it's really a manipulation game for these kinds of things and that's why I avoid them but when you look at a big stocks big companies it's all about crowd behavior and most people they do with the crowd is.
Most people they follow the crowd, a human psychology we’re talking to somebody about a restaurant and you know most people that go to a restaurant they will order the same thing time and time again if they go to that same restaurant or within a few couple different things they're scared to try new things and that's just the way it goes.
The same thing with stocks most people get scared at different price points, they get uncomfortable out of other price points they like certain stocks they get out of other stocks that they don't like those stocks.
I have tried to keep this one under 15 minutes, it’s just very tough I’m going to try and do better next week so we’ll see how that pans out.
There you go regarding earnings. I hope you got a little bit out of this video. Don't trade earnings it’s just can really burn you. I really don't recommend it again here's a little earning sheet for you if you're still looking at some other things.
as far as the oil stocks like the Exxon Mobil that we had before, I got out at most of those positions they were acting weak. So for those of you that are watching those like the Schlumberger I got out of a couple those positions to tackle on the new positions. So the Exxon Mobil's, Schlumberger these things are they're not moving.
Normally I'd like to see couple of days follow through and the volume started to die down so those are those are gone. Still got Tesla, Tesla was popping but I didn't trade it, I did other positions but we have earnings coming up so some volatility that may come.
That's basically the Rapid Recap. Thanks again for joining me. Right now we're still working on a book or two here for shorting just like the money-making stock charts for our swing trading to the upside. We're also doing this similar book for shorting the market and then maybe we’ll do a penny stock one as well.
I’m not a huge advocate of penny stocks but maybe some people would like to just learn about penny stocks in terms of how they move and just look at some charts. So I just love studying charts the way they move the markets, the way. The charts are basically a reflection of the market.
They are reflection of what has happened and gives you future predictor of what's possible because of the energy and that's what charts do, it's a reflection they don't have emotions, they don’t judge it just reflects what has happened.
We need to make the most use what we can out of those charts. So right now I like creating these books and will be probably doing a book since summer time is lighter on trading, the trading volume and so we’ll focus on doing a book or two, to a couple of books and then maybe towards the end of the year.
I’m still trying to plan out this options course it's going to be huge from already the notes that I have on it, I don't know right now I'm guessing it'll be 25 DVD's, 20 DVD's, 30 DVD's.
I don't even know how big, it's going to be pretty, we’ll probably break it down into a few courses but I'd love to get it done this year it's just takes an enormous amount of planning, enormous amount of concepts to get in to and I try to make it as in-depth as possible.
That's kind of what's on the agenda. I hope you guys are planning out a couple of things for the summer maybe take a vacation and go take a little time to rest, to break you know and just enjoy life a little bit you know go out spend some time with the family, do some things, you know visit a few new cities, visit a few new countries.
Just make the most of it. I wish you the best have a great week and I'll see you next week.