Hope everyone is having a solid weekend!
Did some big adapting earlier in week and it paid off like crazy Friday.
" (In this market) It is not hard to find the right stuff, but it is hard to do the right thing" – @InvestorsLive This is Exaclty it…
— Edu Trades (@edu_trades) October 6, 2022
I had said this tweet in broadcast earlier in the week. I see everyone on same page “This market is hard” and they leave it at that. I’m not here suggesting the market is easy by any means — but I do want to challenge the idea that it’s too hard, not enough plays, not like it used to be etc. It’s on us. We can easily chalk that up as the reason and then give up adapting – sure … but
There are countless opportunities every day STILL – the problem is (for me) earlier in the week was the same things I talked about last Sunday where we need to be VERY proactive about things (ie: cover into flush first and rescale later IF it sets up – many times it doesn’t).
The trades are there – just on a way smaller time scale. What took 3-4 hours before takes 30-40 minutes now and if you don’t cover it all you minimize like crazy. We talked about the sideways action not making new lows by 11AM-12PM and meanwhile here I am keeping 50% + of my position on minimizing the trade. This doesn’t mean the “market is hard” this means I didn’t make the proper adjustments in this market despite knowing I should be locking it all in.
See the difference? Use the excuse the market is hard and end it there or take ownership that there are still more adjustments to be made and focus on how to improve in each scenario.
With all of that said it felt like we were hitting a point mid week where shorts were afraid to short and longs were still buying recklessly – felt like by weeks end (Friday) we’d have a lot of rug pulls finally at the expense of the reckless chasers and buyers again
Feels like today was borrowed time on these small caps squeezers.
Be cautious the "buy all dips" cycle may take a pause tomorrow.
Know when to press know when to fold like @OddStockTrader at @Traders4ACause poker night.
— Nathan Michaud (@InvestorsLive) October 6, 2022
Sure enough Friday they all came in – and ended the week with a bang BUT not without the proper adjustments first that I’ll take into next week. When the trade pans out the way you expect nothing wrong with locking it in and re-evaluating. There are so many times I re short as soon as I cover because of the information I got, easy cover, easy fills, rebounded and stuffed (stayed heavy) but just seeing that gave me the confidence/edge vs. ASSUMING they will stay heavy and keep fading. Earlier in the week after a big flush/crack we’d swipe right back up moments later – if you didn’t cover first you got chopped.
Things to Keep in Mind
- Liquidity Is Your Friend ie: TLRY
- AMD Unwinder
- Where have you seen it before? MRIN
- Adjusting mindset on a play
- Channel plays ADTX LUCY
- Timing of channel plays
- Liquidity Traps SNTI
Video Scan and Game Plan
Stocks to Watch
LUCY nice flush at the close – covered more AHs really nice channel given on Friday. We walked through this trade example all day Friday – you saw all the covers for me in the $3.05 range before the EOD 330PM clear out. I’d hope for morning shove and look for quiet unwind on this one Monday.
BHVN longer it hangs more forget about it – using $13-13.50 as a guide for risk – see it push/fail many times and looking to fade it back to the singles. Nothing to step in front, may take 2-3-4 re-checks and attempts to go before finally gives up but key is like NVIV etc once it does don’t underestimate the unwind.
AMD tried it on Friday once and sold it into ramp tried it again and it just faded – was hopeful for EOD trade to set up to size in but never got an opportunity to so took the loss on the starting position at EOD. Key here and in this market — SO EASY to add add add and try to get your average better and end up with 5-10x what you wanted and get buried pretty easily. Be cautious finding a bottom with any size – you must be on the right side!
Failed Follow Through:
SNTI morning rebound and looking to fade it quietly like KITT — I think it’ll be super illiquid since algo left the building.
TLRY morning shove is ideal +.10-.20 rip and then ideally unwinds back to where this move started.
GGE any good AM shove for a fade back where it started.
MAPS my choice with TLRY — all these names that went as sympathy came in like mad.
BEAT keeping on radar for the day it wants to crack – be cautious trying to force this trade — remember TH GOSS RYTM etc. you never know if this turns into one of those — so key is stay fresh don’t exhaust – set price alerts and if it flushes and starts to base like Friday move on. Edge = when it stays heavy.
ADTX nice one just like LUCY on Friday have some left short but covered 80% of it – same set up and same discussion in the Trader’s Lounge. Ideally morning shove and use that $3.75 as a guide from Friday discussion.
KITT quietly fade off and fill the gap in my opinion.
Continuation:
WVE nice break out look – no position.
TOP monitoring NOT For the long however I am hopeful we continue to have more upside this should look familiar to the walk up moves we’ve been monitoring. I had given one each week … IMTE LGHL and then JWEL last week. Doesn’t mean short at will just means when the stars line up and check all the boxes we’ve discussed many times — I will be ready.
ILAG monitoring as well similar move as IMTE LGHL JWEL – higher better and ideally brings the trade. It’s on continuation side because I want it higher but I will not go long.
PEGY hope most of you scored huge on this one – double from the idea re: MRIN – ish checked all the boxes and reminded me of it posted the similarities the night before and next day charts were carbon copy intraday. Crazy. I think it needs to consolidate for a few days. I bought the flush Friday when I wrote in room and sold into the $3.70-3.80s each time I said I did — hold very minimal left. Ideally see it consolidate and set up for a good trade by Tues or Wednesday.
AEHR nice break out look – no position.
Staying Familiar:
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