OK, I know what you're thinking. Wow, that Waxie dude is Da Man!
And, well, I don't blame you. I am da man fo sure. Having said that, in this business I can only be da man on a day to day da man basis! Why? 'Cause one of my first lessons teaching people about the market and trading was that I could go 50 and 0 and be hailed the greatest thin' since Gunga Din, but if I lose on trade 51...I SUCK! I am the worst and someone, somewhere will write really REALLY nasty things about me! I will say, though, at least for today that I am the absolute freakin' ruler of the world! The nearly 200 clients who came to the TOP 5 Stock and Options class last night are certainly riding high in the saddle, dude and dudess'! We are SMOKIN'! It's a tad late for anyone else to get in the game, so I'll post a few of the big winners here now; COIN (up over 20% intraday), ORCL calls up 3% so far, but higher after hours, AA calls up about 20% from the open, RIMM calls and stock = ROCKING obviously (we sold 1/2 at the high of day today!), MON, well, MON total beast obviously, the list is just doing fantastic, even on a basically flat day.
The market right now should trend higher unless bad news knocks it down. it's unlikely it'll go in a straight line, but I see no real compelling reason for us to get a massive selloff again here near term, baring news (always that damn hedge!). News does RULE, as you all know by now!
I think staying away from banks and brokers this second is a good idea. If we continue to rally they will go along for the ride more than likely, but those groups are much more likely to catch a real beating news wise than anything else.
I'm going to give you guys a little hint. When the market is like this you need to look for LAGGARDS. It's one of the things I think I do better than most traders. It works both ways, meaning we can short laggards (stocks that have been strongest) when we smell blood in the streets coming as well. COIN is a perfect example. Yesterday it was up (I liked it SUnday night, so its up like 30% in two days), but our entry was super duper delicious. Why COIN? Well, Ag stocks figured to get a nice bounce after last weeks selloff, even on Friday when the tape was rocking higher. Once I saw that those stocks were primed to bounce, COIN is automatically on my radar screen. My laggard meter is on hyper alert and it's time to look for stocks that are a little smaller that can move in a big % manner. COIN fit the bill perfectly.
I think I may have another one for tomorrow, an under $10 stock that looks primed to get a nice big move potentially.
Sector rotation works like this as well. The hottest stocks all bounce, like the solars (check out FSLR and you'll see what I mean since that's the leader in that sector clearly) and in that group you look for laggards (did ya see our SOLF move today! Wowsa!). Then you look for lagging SECTORS for a bounce. Usually thats the weakest bunch of stocks thats lagged the move so far. Timing is everything and if you time it right you pay at a time when the market is ready to reward the patient traders who may have to ride a loser a wee bit before it coils and bounces higher to catch up.It's like the food chain. If you do well in one place its scarier to look elsewhere, but you definately don't want to stay your welcome and you certainly don't want to be so early that you take a big beating before the inevitable catch up stock. Trick is to study the market and a sector or two, and then look at a couple weeks daily charts on each stock. You are quite likely to see some overlapping. That's a very very good thing and one you may want to consider trying on your own.
Tomorrow fading the gap will probably be a good strategy to start the day. From there I will look for breakouts and the like. From there we'll see if I remain DA MAN! or, if I am tossing sald with Emeril!
See ya on the other wise,
Michael "Waxie" Parness