How Did We Do? : Taking a Look at Trader Scott’s Pre-market Comments for June 18-19

The Entry Points

One of the perks of becoming a monthly subscriber to this website is enjoying the stock symbols that Trader Scott shares every day that have a high probability of being movers yielding high profits. Of course, it’s up to you to exercise the knowledge you’ve learned from his trading videos and conference calls to understand the trade set ups and when to exit the trade, taking your profits, but he does the hard work finding and filtering the symbols.

Scott updates our subscribers on gold, crude oil, bonds, the stock indexes, as well as his stock list, giving exceptional insights into the charts thus making it much easier to discern the best buy and sell areas. On occasion we release a few of the details of the pre-market comments to the public to share the information that only our subscribers are privy too. Scott put out a list of stocks on 4/2 which has performed incredibly well and he often updates our users in the pre-market comments on their performance.

We have traded in and out of a great majority of these stocks, and markets, and they have been made a part of our permanent watch list. At least for now.

 

 

Pre-market comments from June 18

Markets move in waves, the technical conditions underlying the best trade setups move in waves. Trading ranges form, springs and upthrusts occur. And there are always the tricky time-frames involved. Within bigger setups, there are always smaller setups, on both sides of markets. We can choose to wait for bigger setups, or we can trade smaller setups, or both. But we need to be aware of the time-frame thing.

On Friday in the premarket, I included an SPY chart with 276.32 drawn in as support., and a beautiful daytrade spring set up for a long-side option opportunity:

Here is Friday’s SPY chart from premarket comments:

 

 

And here is the spring setup in SPY – below 276.32:

 

The high probability for that one should be a daytrade mentality, as we had met the magnet area, the pull of that magnet was done, the ease of movement to the upside probabilities then dropped considerably. Now we need a new long-side setup. Friday’s low is support, as it is in the IWM.

 

We put out a list on April 2 sharing 39 stocks we were watching for big moves. LULU was one of those stocks

How many times since this website began have I said that I love strong stocks. At least 100x. How many of you actually believe that now and understand it – and why?

LULU more new all-time highs – strength begets strength. It was 88 on 4/2, now 128. Strength begets strength. Almost no one believes in that statement, and have no interest in the strongest stocks. Of course proper buy areas/setups are always part of this, so plenty of patience can be necessary to wait for those areas.   The closing price on Friday July 6 – $128.54

I love strong stocks, and stocks at all-time highs – however, trade entry (trade setup) is the single biggest factor in success of each trade. Stocks at new highs can be extended also. So 2 parts to it, new highs great, extended then patience. I discuss all of this constantly and more below. And realize, strong stocks can stay overextended for a long time. I am extremely stubborn about the trend. Angling up alone is a very powerful tool:

 

 

 

 

The strongest stocks are usually earnings related, either a turnaround story, meaning anticipating, or already showing the earnings acceleration. And as I stated last week (below LULU earnings), about earnings catching up to sales.

 

LULU earnings from The Street Insider, year over year growth accelerating – 3-19-33-71%. Year over year revenue also:

 

Next EPS Date8/30/18 *Est.EPS Growth Rate+71.9% *Last Qtr.
Average EPS % Beat Rate+10.9%Revenue Growth Rate+24.9% *Last Qtr.
Average % Move 1-Wk after EPS+11.5%Normal Earnings TimeAfter Close
DateQtrEPSCons.SurpriseRevsCons.Gd.1-Week %1-Day %Details
5/31/18Q118$0.55$0.46+$0.09$650M$616.31M=Details
3/27/18Q417$1.33$1.27+$0.06$928.8M$911.42M=Details
12/6/17Q317$0.56$0.52+$0.04$619M$609.9M=Details
8/31/17Q217$0.39$0.35+$0.04$581.1M$567.33M=Details
6/1/17Q117$0.32$0.28+$0.04$520.31M$513.92M=Details
3/29/17Q416$1.00$1.01-$0.01$789.9M$783.5M=Details
12/7/16 Q316$0.47$0.43+$0.04$544.4M$540.23M=Details
9/1/16 Q216$0.38$0.38$0.00$514.5M$515.47M=Details

 

 

A multi-year sales growth rate which is very high, in a newer company, will almost always lead to solid profits down the line. I was anticipating that with IQ. For years the AMZN permabears kept claiming AMZN was a “bubble, a scam a joke”. Why? Because no profits. But the sales growth was stellar. Bezos kept reinvesting in the business, AMZN eventually started generating profits. And all the while their operating cash flow was stellar. I am very interested in stocks with multi-years of high sales growth rates. I’ll be discussing some Chinese stocks in that category over the next few days. I am calling them CFAANGs for now – China’s version of the American FAANGs. Soon to be discussed, as they have had huge runs and a reaccum area would set them up well – HUYA, BILI, and others. GOOG investing in JD is positive for the outlook for the sector.

 

SQ at all-time highs, it was 48 on 4/2 with my stock list, now 64:

As of this writing, the price is 66.44

 

SQ is another stock attempting to catch up to its sales growth, 3 year growth of 35%, last quarter 45%, 3 year earnings growth of 0, but last quarter up 20%. Again, anticipating the earnings growth. The debt is kind of high at 50%, but a lot of cash at 870M vs 365M in debt.

Crude oil is in reaccum, many of the energy shares are also, several have been posted the last few months, EGY discussed over the weekend.

 

 

 

Pre-market comments from June 19

More tariff news, the stock market is reacting – it is all noise. But it is allowing more volatility – opportunity.

The new duties will go into effect “if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” the president said in a statement provided by the White House late on Monday.

Beijing has pledged to fight back if Trump goes ahead with the new duties.”

The China stocks discussed recently, like HUYA, or IQ which was on my 4/2 stock list, have to deal with the tariff news.

 

As discussed last week a few times, we got back to 280 SPY magnet point, and the probability of the rally continuing straight up, had diminished greatly:

So now we got back into that 280 SPY magnet point, which I discussed would be the case well in advance. And to repeat, this is a great place where a pause/small reaccum would show up.”

And I left a reply on 6/13, my approach to the stock market rally:

So having said that. The market has had a really big rally since 4/2, back into 280. QQQ and IWM new highs. I believe the trend is still up, but this is no longer a high probability area for new position trade type entries. I did some selling, in GALT for instance which I was holding. Now I’m looking for some broader setups, a bit deeper, for positions that is. Short-term stuff, daytrade, always those opportunities. Also, a lot, I mean a lot of stocks are working currently. Too many? Maybe. It would be real helpful/re-energizing for the market to do another short-term reaccumulation.”

 

So again with the tariff news, more opportunity. The SPY and individual stocks discussed below.

 

Yesterday, another daytrade spring set up for SPY long-side options – huge rallies yesterday in the calls, this week or next expirations. In the premarket yesterday, I posted my high probability where the support would show up, Friday’s low – and I need to see that break to set up something. Just the way I do this business. I discussed Friday’s opportunity, and Monday’s also:

The high probability for that one should be a daytrade mentality, as we had met the magnet area, the pull of that magnet was done, the ease of movement to the upside probabilities then dropped considerably. Now we need a new long-side setup. Friday’s low is support, as it is in the IWM.”

And a beautiful daytrade spring setup below Friday’s low276.35:

 

 

Not all support areas are high probability, some are more “obvious”, there are ways/tools to give us more confidence. If you don’t have as much confidence in a certain area, then be patient and wait til you do. And again for my overall view, it is the Russell-type of stocks and IPOs which have been my focus since April 2.

Gold was discussed over the weekend in the call, as to the miners and to gold itself, getting hit again today. I bought some more physical gold when we broke below Friday’s low, 1272.

 

 

Also more IPOs discussed recently, the IPO market is pretty hot right now, the best way to “protect” ourselves is to buy into reaccum/springs or as close to the breakout point as possible. Otherwise they (possibly) are overextended:

SFIX, outstanding spike low/spring on Monday:

 

 

SMAR:

 

 

CBLK:

 

 

PVTL:

 

 

GOOS, relatively new IPO, outstanding earnings:

 

 

HUYA, as discussed Monday, one of the Chinese FAANGs, live streaming video platform, great sales growth:

 

 

Three year earnings, 0% (new company), last quarter 350%, last quarter sales 132%, no debt, float 37M.

 

EGY discussed many many times, also in yesterday’s premarket, and also on the weekend conference call. Outstanding spike low setup, I’m not great with these trades, but I did catch this one – 10% trade:

 

 

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