Premarket Recap 5/10

This business of trading is 100% about probabilities (and and risk). We can’t avoid being wrong, making mistakes. It needs to literally be factored into our trading plans. What is a stop for? Why do I (almost) always sell too early? We need to be prepared every single day. Why is that so hard for most people? It’s just work. Why be afraid of work? It’s the work (and the results of it) which give us the confidence, and that builds over time to (hopefully) NOT overconfidence.

I believe 100% in my work, right or wrong. And I also (biasedly) think that the quality of the work on this website is outstanding. The following premarkets from the past week will be posted in a few separate posts (with the same intro) to keep them shorter:

 

 

From 5/10, really spent a lot of time on this one, explanations, details, potential, hoping to see people getting interested in the incredible opportunities in the smaller stocks. The only other market, to me, with these amazing profit opportunities is the index options, and yes the two toughest markets in the world to trade:

 

Long post today, I’ll cut back on the next few premarket posts.

With the 2 year yield hitting more new 10 year highs, the vast majority of “analysts” are still sitting on their behinds trying to figure out if/when the bear market in bonds will begin. A long time ago I started using the concept of “rubber stock” for the US short-term interest rate structure, and have repeated that over and over. And where did I learn the runner stock concept? By doing daytrading. Yet the vast majority of people have no interest in this stuff when I discuss it. There is nothing wrong with avoiding daytrading – but to not study, study all which can be learned from it?

To me, the best way to do all of this is to build up your capital via shorter-term trading (not daytrading), and become proficient at that, and then, and only if desired, focus more on either/or daytrading or position trading. You have got to learn this first – how to trade. How is that accomplished? Simple, the “problem” is it requires working at it consistently – via study, study, study. And seeing example, example, example. There are way more examples with short-term movements.

The runner stock:

 

The stock market is in a secular bull, currently reaccum, over and over I have repeated to use this area in this time frame to start building up positions for the new highs which we will see this year. If you choose to focus on noise, you will always miss the best opportunities. And you make an already difficult business that much more difficult. Yesterday I scratched the rest of my short call position. The SPY is getting back into the 270.50 gap resistance area.

I don’t know if the high is in for the USD, there will be more rally attempts, but there was a change of character since this rally began, and a leveraged Forex or futures trade setup. I do not trade currencies anymore, just was observing that setup yesterday and notated it on the chart:

 

 

 

It is tough to understand, with all of the opportunities I consistently lay out with the smaller, and sometimes bigger stocks, why no one gets back to me about these opportunities. Why is that?

So to go thru more of these, as HEAR and CLNE are in the news today –

The #1 stock this morning is HEAR, up 50%. It was just discussed again the last 2 days, and had a great opportunity yesterday on the reaction:

From 5/9:

TNDM has been discussed several times, and along with HEAR extremely relentless rallies..Just like TNDM. TNDM did have several SOSes, which is why I discussed it originally.”

Waiting for a bigger reaction in EBIO and EYPT.  Watching energy shares EPE and EGY.”

 


 

CLNE was on the 4/2 stock list, which was focused on energy shares and retailers. And yes now more and more people are discovering how “bullish” those sectors are. You knew that for a long time before now though didn’t you.

CLNE with an equity investment from Total.

 

 

EPE and EGY more rallies, plenty of opportunities. And opportunities to potentially take some profits also, EPE up 50% from the reaction low – in one day:-

From 5/8:

And those small energy shares are outstanding opportunities. Yesterday’s premarket I posted 2 more of them, EGY and EPE. EGY, +30%, was the #3 stock of the day, (BLNK, +50%, also posted yesterday, the #2 stock of the day). EGE was down in the early part of the day, ripe for buying, then closed up 4%. And after the close came out with solid earnings guidance. Big accum area in EGY, less so in EPE, and both stocks had opportunities yesterday, anyone who read yesterday’s post had an opportunity, when crude had an emotional spike lower before the announcement. All I can do is lay out the opportunities.”

 

 

 

DCIX was discussed yesterday, and this one was a pure daytrade mentality for me. I did a pure bounce trade setup, as I was looking for only that after the monstrous #1 EA at the open: And yes, when I do a bounce trade, certainly not looking for anything huge out of it, and often I vastly underestimate how high the bounce eventually goes, but I’m looking for 10% out of these. Sometimes I luck out and get more, but it is not factored into my approach, that is sometimes I get a bit more. Yesterday I lucked out and got 15% – the first 2 side arrows. The down arrow was my selling parameter. And later in the day notice the next 123 top, and the volume coming out of it:

 

 

Also with the small stocks, please they are not investments, occasionally these things will become great stocks, but it is rare. It is wild to watch people time and time again go nuts over these things – after the rocket ship has begun. My preference is to look to short those rocket ships. The problem is they are often tough to find shares to short. And especially with the one-three day huge spike moves. I posted several of these recently, AMDA yesterday which I was attempting to short at 4.40 in ah trading. When they are much more contained, the moves can last for weeks.

 

HTGM was discussed before hand, as to what my expectation was, it played out beautifully, and a solid rally off the spike low. I love spike low opportunities. This thing with markets, the analyzing part, it is a step by step process, as to how things set up. And EAs set the process to begin, for the ending (potential) and actually for the beginning also.

From 5/2:

HTGM, some nice reaccum areas, watching for another one.”

EBIO and EYPT discussed so many times.

From May 7:

EBIO had share news ah on Friday, I was watching wanting to see it go below that 2.67 I had drawn in for a few days. Did not quite setup, but nice spring.”

And from May 8:

“Waiting for a bigger reaction in EBIO and EYPT.” (Waiting for a bigger reaction right?)

 

 

I specifically laid out 2.67 for you, as EBIO used that for the spring, and a nice rally out of there, and back into short-term res.

 

 

mm
About traderscott 1022 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.

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