Here’s a breakdown of what we did today, and what’s likely to happen tomorrow! (April 01, 2020)
SP-500 GSX MSFT SP-500 CCL APT SPY APT LAKE APT LAKE PTON TDOC RCL CCL RDM NCLH SPY QQQ
This market has changed ( INDEXSP: .INX ), you can see that, it is in the process of continuing to change. We are still working, I have talked about this a lot lately, about the fact that stocks don’t trade in V’s, they trade in a series of V’s also known as W’s. That is something you really have to understand because if you don’t then you think that every single sell-off is going to be like this one back here in 2018; a big old massive V down and then a run up.
We actually did get a little bit of, it felt like it at the time, a little bit of a pullback just for a day or two and then boom, off to the races again. So it is like this V pattern, this is typically not what happens with these types of sell-offs. And those who are really aggressive are finding that out the hard way. The market goes up and you and you’ve got the FOMO, fear of missing out, and missing out, missing out, and then finally you pile in and that turns out to be the right thing to do for the guy on the other side of your trade and this is the thing that always happens.
The question is, we’ll move this part of the W out, the question is, is this part of the W, the pullback, we’ll move this up to here, is this part of the W going to be like this? Maybe one more day. It’s April Fool’s Day, what the heck did you expect? After we get a big move up into the end of the quarter, all the big Ponzi schemes known as pension funds rebalance; you are going to get some kind of a correction.
So is the second part of the W here, we’ve got this, that and then a pullback and we are looking at the right side of the W, is it going to be here and then run up? Ultimately, this level is going to be breached. Ultimately, we go higher, we just don’t know whether that is going to happen anytime on this chart or whether we have to move it way over and look for here. But sometime in here we are going to have a move higher.
The question is, is it going to be here or is this out of play and we are going to get a move down here? Maybe a double bottom, that would be ideal, I would love that. And I would absolutely be a buyer of that double bottom, so will everybody else. It is a very wide spread theory but that is going to happen. But we also don’t know whether we are going to get this type of move; a move down lower that ultimately gives this our buy point.
This is the kind of stuff that we don’t know. And, frankly, here’s the other thing, I personally, I don’t want to disparage anybodies intellect, I really don’t, and I know sometimes I do. What a lot of people don’t realize is that I do it to myself all the time. Nobody knows what’s happening. This is not the typical thing, and I need you to listen to me because I am really serious, if you think you know, you don’t.
If you are reading somebody’s article, they don’t know. If they say they do, they don’t. Oh, we’re going to have 2 million deaths, you don’t know that. Oh, we are only going to have 50 thousand deaths, or oh, 120 thousand deaths. Really? You don’t know that. Nobody knows that. Do you know who the real idiots are? Those that claim to know and those that listen to them actually believe them.
The smart guys, that Dr. Fauci came out the other day and admitted it, not that he was trying to hide it but he said, we go on these models. And the models are always revising; we are always revising the models as new data comes in. Welcome to my world, that’s what we do.
This is a process; this is a type of thing, where models only work so well. They only work as well as the data is reliable. And when the data is always changing you literally have a compromise in the reliability of data. That’s just common sense, that’s a math equation, 1+1=2, 1-1=0, you just don’t know.
The reason I am saying this is because in the typical fashion, like in the housing crisis way back when, a week, a month, a month and a half, two months; at some point the extent of the damage is known. It doesn’t mean that it is all behind you but you can say, okay, based on what we see and all of these houses that are underwater and blah, blah, blah, we’re seeing the Fed coming in, this is probably it, and then the market starts climbing and the Fed says we are going to do whatever we need to do.
This is different because it’s a bug. The bug doesn’t speak English it doesn’t even speak Chinese. We don’t know so much about it and so the market is reflecting this. The reason I am saying this, I am kind of pounding the table on it, I am pretty passionate about it, because my business is your success. That is the best way I can say it, the best way I can describe it. And I mean it, that’s my business, it is your trading success. If you are not successful then I suck at what I am doing and I mean that.
So when I look at this, for somebody to think, based on what’s happening now, that we’re just going to miss this move, that is just madness. The reason I am going into this is to tell you that this stuff here, this is dead. It is dead for the foreseeable future it’s dead. I don’t think this is dead, I think we are going to get more downside.
But here’s the point: You are have to do one of two things, either stay out of the market and just wait for your train to come in; one stock that is getting really, really close is GSX ( NYSE: GSX ). I have been looking at this for a while. I actually bought it a couple of times and got shaken out. I will admit it, I was just trying to make something happen. And I am not in it now but I am watching this. And it just feels like it is only a matter of time when this thing is going to start running.
But for the most part the other stocks, I was trading the snot out of Microsoft ( NASDAQ: MSFT ) both directions today, actually. And this has been a great trade for me. But as we moved further along the x-axis, the time axis here, my duration got shorter and shorter to where today I was literally day trading it.
And the only reason I was day trading Microsoft ( NASDAQ: MSFT ) is because I had been following it, and listen to me, this is important, I had been following this stock so very closely the last week or so, kind of watching it all day long and adding my position. Maybe taking some off the table, maybe selling some calls, selling some puts. I had really been watching it a lot and so I really got the sense that I got the feel for the stock.
That is always problematic when you start thinking you know more than you actually do, but I know that. And so I didn’t think I knew more than I actually did. I just felt, like I had a feel for Microsoft ( NASDAQ: MSFT ) so I just kind of fixated on it a little bit. And as long as it was paying me off I kept trading it. Well, that trade is over.
What I have been doing more and more, like an increasing amount of this is day trading, 59-Minuter Trader stuff, that’s what I have been doing and it has been paying off well even on a stock that I have said I just kind of want to hang onto this stock for a while. Then the price action would be as such to where I would say, no, this is more like a day trade.
We will go through a couple of these in this video but I will just say, generally speaking, I am looking at this ( INDEXSP: .INX ), gun to my head, I would say buy the open tomorrow. And do you know why? Because my suspicion is ( NYSEARCA: SPY ) this will gap down and then maybe it will run up a bit to the upside. But this is, make no mistake about it, this is a bearish wedge right here and right here.
Now, you guys, the members that fall into the risk management type traders. If you are 25 percent in at 243.00, so you are still up, we looked at this after this first big day, the first big move I said, “Put 25 percent to work just to get in.” Because you are managing this risk, you are managing the risk of missing out on this kind of move. I didn’t think it was going to happen but I don’t know, you never know.
So you are managing your risk on this kind of move; you are in 25 percent, now you are waiting. Okay, now we know why the waiting is. The aggressive ones I told you I got tired of people bitch at me, frankly, honestly, and I said, “Okay, on 3/26 just go all in. You are all in now you get to have some fun and we will see what the market brings. Things aren’t really working out that well, you are down $7.00 but that is not going to break the bank, it shouldn’t break the bank.
Here’s what we do next: For the risk managers that are 25 percent in, that means you have 75 percent in cash; that’s a good deal. You are in the catbird seat so, hopefully, what we get is a pullback. I don’t know if it will end here or if it will end here, but we get a pullback and that is great. But what we need then is, we need some kind of a reversal, from wherever it is, that takes us up like this. A big open bar closes up at the high of the day or close to it on big massive volume. That will be our time to either put, depending on how things work out, either put another 25 percent in or actually put in 50 percent so that you are 75 percent long in your cash position, from your cash position at that time. I am not talking about your wealth I am talking about your cash you took out to wait for a better buying opportunity.
This is kind of what we are looking for, this type of thing. But, seriously, think about it, we don’t know, we have no idea when the extent of the damage, whatever you want to call it, we have no idea when that is going to be known. The market will ultimately know it but what the market is telling you right now is, like in shrugging emoji here, nobody knows. So you are going to have to wait. You are just going to have to be patient.
But in the meantime, you can trade smaller, which is what we are doing. And I will give you the heads up on this because I talked to my brother Gary just a little while ago. And this is a time when a lot of people have extra time on their hands but a lot of people don’t have a lot of money to spend; because some of the extra time you have on your hands is, you lost your job or your spouse or your partner lost their job, something or other. So there are definitely some challenges that we are all facing. But what we are going to do is, on the 59-Minute Trader program, we will be sending out an offer tomorrow for you to get the 59-Minute Trader at a much reduced cost. And if you are interested on capitalizing on the market that we are in today that thing will pay for itself very quickly. We have never gotten one negative comment on that curriculum and we have sold thousands of them. We literally have not gotten one negative comment so I highly recommend that you consider it. This is a time to be bumping up your knowledge.
So with that said, let’s look at some of the things that I looked at today. What we have here today is APT ( ASX: APT ). If you look at this chart, we’ve got a daily chart, a 15-minute chart, a 5-minute chart, and then a 1-minute chart. I want to show you what we did today.
So I am teaching a class, we open it up at 9 AM, Eastern Time, before the market opened, half and hour, just so we could go through things. And so then the market opens up and I am looking for stocks to trade. I have never looked at this stock before, my bad. I never looked at this stock; by the way ii is up 42 percent, hello. Somebody asked pretty early in the day, how early, I will tell you how early, because I bought it at 10:05 in the morning. Members are asking different questions like, what are we looking at, etcetera, etcetera? And somebody goes, look at APT ( NYSEAMERICAN: APT ), this is really important because you are going to wind up making some money on this type of thing.
So this is what the daily chart looks like. The first thing I am thinking is, infrastructure, building materials, this is what the intraday chart looked like. So right here, this is when I first looked at it, right here. The stock had already run up and a member goes, so what is up with this? This is what it looked like, this is where it was at 10:05, it started here, you can see it had already reversed. I looked at this and I am going, what the heck is going on with this? I don’t get it, I don’t know this Alpha Pro Tech ( NYSEAMERICAN: APT ) thing, whatever.
So I pull up the website and this is what I see: I am looking at this, N95, it looks pretty good to me. I am like all in, I said, all right, now I know why this stock is moving. We tracked it along the VWAP, which is the volume weighted average price. Members stayed long this stock all day long. It broke out again and then ultimately runs clear up to close, basically, right at the high. And even as the market trades in after hours trading this thing is still going. It would not surprise me if it opens up at $20.00 tomorrow. Seriously, it could happen.
The point is, this is the kind of trade that we made. You can look at this and say well that was a heck of a pullback, and it was if you count 7 or 8 percent from top to bottom as a pullback. But some people are even trading around in this thing. But look at what happened, watch these little lines here, these Bollinger Bands. Now these puppies are getting pretty tight, like within 6 percent, 5 percent of each other. They are getting really tight; we’re in the afternoon so we are through the morning rotation and now we get a breakout, boom, on volume, that’s it, that’s the time to load up again. And then sure enough, the stock just keeps going up.
What I am saying is, these are the kinds of trades that we are making in these day trading sessions. And these are the kind of trades that you should be making. Other trades that we looked at, this is a stock ( NASDAQ: LAKE ), I still have a small position in this stock it is up 13 percent today. This is in the same industry, basically, these are the stocks that are coming up; the ones that feed off of the uncertainty of whether people are going to get this thing or not. And so if you look at LAKE ( NASDAQ: LAKE ), you look at APT ( NYSEAMERICAN: APT ), they’re basically the same kind of pattern. So wouldn’t you expect them to be trading the same way? They have all ready rinsed out all of the weak hands here and now we are starting to get a Phase 2 rally. This is the day trading stuff that you can be doing.
Peloton ( NASDAQ: PTON ), this looked like it was going for a while. I bought that and then sold it, not my deal. Teladoc ( NYSE: TDOC ), this stock is really sloppy. This is a very volatile stock. You guys probably know what this is, you don’t go into the doctor’s office because you access them online but it’s pretty volatile. The uptrend is there but it is not one that you can really buy.
The cruise lines ( NYSE: RCL ), the low of the day was 25.60 it closed at 25.77. This was one that I actually shorted. Actually, it wasn’t Royal ( NYSE: RCL ) it was Carnival ( NYSE: CCL ). I actually shorted in the afternoon when it started falling out of bed here and then closed like right into the close I covered my short. And the reason is when a stock is down 33 percent, even if it is a cruise line the next day is probably going to be a good trade. I don’t have any reason to hold it over.
These are stocks that we are looking at, that I am looking at, and so our members are going to look at. Members, get in the forum in the morning and I will walk you through this stuff. CCL ( NYSE: CCL ), RCL ( NYSE: RCL ), these can be good trades tomorrow. I don’t even know whether they are going to be longs or shorts. Here’s my bet: My bet is they are actually going to be longs. Yes, it’s true, for a trade, everything is for a trade. These are the things that we are looking at ( NYSE: NCLH ), other than that, seriously, you should be waiting for your ship to come in here ( NYSEARCA: SPY ), pardon the cruise line joke, whatever.
You should be waiting on the sidelines with plenty of cash for the market to kind of give you some kind of signal ( NASDAQ: QQQ ) that there is a better bottom in. And the way you are going to get that is, a big move down and then a reversal on high volume, this is not that. And so if you are saying is this the bottom? Don’t be afraid to miss out, you are not missing out on anything. We have got a lot of supply overhead. You are not going to miss out on the big rally back to new highs, not even President Trump is talking that anymore. There’s that whole thing about, tomorrow I think we are going to recover, we’re going to go higher blah, blah, blah. Nobody is talking about that anymore. Ultimately, it is going to happen but it is not going to start tomorrow, I promise you that.
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