Tug of war in the markets last week! Huge FOMC move followed by a complete capitulation, only to get soaked back up the next day.
There are still a lot of traders who are trying to figure out this market when they don’t need to. Just go with the flow, don’t change what is working. Trying to figure out swing trades on banks when you might as well flip a coin on whether they are going to gap up or down. Traders are still trying to become “investors” because the banks are “oversold,” etc. In my eyes, I think the play has been and continues to be — be a damn trader! Stop trying to be some sophisticated investor when you really don’t have a clue what’s going on. Neither do I. Difference is I’m not trying to change everything that’s been working to become some sorta “investor” in banks because they seem cheap.
We discussed over the last two weeks that, in my view, all of this stuff will take time. I suggested that if you’re buying the bounce, guess what? So is everyone else. And if they don’t bounce, what are they going to do? That’s right – work out all the dip buyers and take another leg lower. So that’s where we are at. That’s what happened. In the end, time fixes everything. The problem is most go in as a ‘swing trade, but the reality is they think it’s bottom, and that’s why they bought. Then, when it’s not bottom, they panic and sell a few days later. Why bother? Just keep doing what’s working. In my eyes, it’s all noise otherwise.
The good part about this market is, yet again – there is no shortage of range. You don’t need to be first in, you don’t need to find the top. You just need to wait for your spots, have patience, and try to get the meat of the move. Once things slow, I tend to size out or move on.
Giveaway Winners
Here are the t-shirt winners:
- RahulSingh
- alexromashyn4655
- bushbushssss
Video Topics
- Not Falling For First Flush
- Dip & Rip Candle
- Use Flush Low As Guide
Twitter Questions
Hey Nate, what's your take on the volume in the banking sector? Do you think it's going to stick around for a while, or is it likely to fade out?
— aslan-traderš¦š¤ (@lorenzo1344) March 24, 2023
How to spot potential pivot points in volatile trading? For instance $FRC and $PACW was traded widely on both end
— Johnny (@trk_johnny) March 24, 2023
Video Scan and Game Plan
Stocks to Watch
AI really nice mover on Thursday and again of Friday. Too much too soon on the move so had a nice fade back to red on Friday to take advantage of. I put a starter on a bit early but waited for failed follow through and $26 confirm for the scale which worked extremely well. I’d be looking for ideally a gap up push vs. Friday levels and unwind. If it just hangs around flat and starts to grind – stay away from add add add on short side. Clear soak spot in the $20s and seems like over $25 + has been exhaustion so just make sure entries are after set ups form not before (with any size).
RIOT and MARA (throw COIN in there too) have been really friendly traders. I am trading these as sorta the “daily driver” but the key here is not to get too biased. They are super liquid so you can take on size but when they look the WORST and your brain starts telling you “Hey it’s going lower don’t cover!” ignore that and cover LOL. Every time it looks super bearish it’s been a good cover UNLESS BTC is unwinding/trending down the edge is by trading these into strength/flushes and leave along in between.
ETNB monster opportunity Friday. Trade of the day for me off morning parabolic followed by pressure down to pricing level. We may have one more day of pressure before it starts to form a base. Looking to fade any fast moves and scale until trend slows.
Failed Follow Through:
BBIO hugeeeee rip at close, in my eyes probably a BS rumor given the timing into close on Friday. I shorted some into the rip around $18 and covered it. Thesis being what I posted on Twitter – they JUST raised at $17 so anything over it to me felt like an edge given the amount of paper just sold there.
SI morning shove is ideal, bummed I missed the long. I actually laughed about it at $1.08 pre market to myself like “holy shit” when did that happen? Flash forward an hour and we were up 50% and pushing. Gave a great fade off the $2-2.20 blow out my goal was $2.20-2.50 for fade back to $1.70s. Worked well. Participated small but at that point of the day on Friday I was a bit hands off since solid AM. Ideally we get $2 re-test and slow fade back down.
FRC every day blow outs have been great edge. Cautious over night, cautious long and cautious chasing weakness.
Continuation:
GBNH can raise $5.6M + they have 5.6 mil shares that can be converted as well but it’s not registered yet. It skipped up pretty quick exchanged a bunch of stock faded into low .8x’s before recovering again on air. I hope that most shorted and stayed over weekend I’d love to see a flush off open get soaked and maybe some circuits. These are the types everyone starts to hammer in thinking raise and then makes them pay. So, that’d be the goal let everyone get run over then fade it back.
ZVSA possible liquidity trap
VORB ideally gaps and gives a trade off like TRKA where it was near $1 pre market and then unwound through the day.
Staying Familiar:
Thanks for the video, Nate! Really like the explanation on wait for failed followed through to be confirmed. Can easily then size in without trying to guess the top. Best explanation was on AI for me, again thanks a lot!