Premarket Recap 5/7-5/9

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 5/7:

 

There is a new post here discussing this exact topic, but since the “esteemed” Warren Buffet says it, then maybe people will believe what I’ve been saying for years – the stock market is not a bubble, not even close:

When given the choice, billionaire investor Warren Buffett wouldn’t hesitate to buy stocks over bonds.

If I had the choice between buying the S&P 500 index or buying the 10-year U.S. Treasury30-year U.S. Treasury, it wouldn’t take me a nanosecond to go into stocks,” Buffett said Monday on CNBC’s “Squawk Box.” “It may be because bonds are going to fall a lot.”

And that bond market “bubble” (massive distribution area) is extremely bullish (long-term) for stocks, commodities, and cryptos. In the shorter-term, it’s going to affect markets, and is the “reason” for the increased volatility. That is here to stay. But once again, from April 9 –

This is a secular bull market in stocks.

It is the bond market which is the huge problem market. The stock market is acclimating itself, re-energizing, via this area. It is getting itself prepared for the higher rates. To me all of the other “news” is pure noise.

 

All thru the 1970s, all the inflation, soaring bond yields, conflict, currency problems, NY city’s near bankruptcy, etc. – did the stock market keep “angling up“?

 

 

Was that accumulation overall? Was there reaccum? Was there the retest of the breakout? Is there anything there that you shouldn’t be able to recognize? Was it wise to get off track by paying attention to all of the “news” (noise) then?

In the meantime, the volume on Friday’s rally really light, and SPY getting back into potential upthrust area. Maybe a rally, backup, and shoot for 268 magnet.

 

If you want to improve your ability to find the small (or bigger) stocks, to recognize the potential for an upcoming move (it’s about the period of preparation), to learn this and improve and really move forwards with your ability and performance, then you’ll do the work and study the charts. And you’ll get better at working “smarter” not longer.

RNN was first mentioned on 4/27, and has rallied 30% since that posting – and NOT A DAYTRADE.

 

MBOT was also mentioned once again on 4/27, and two 10% opportunities in there.

 

EBIO mentioned a dozen times, along with EYPT, this chart of EBIO from 3/26, and at the arrow on chart #2 –

 

 

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.

 

 

Several stocks mentioned last week “putting in huge tops”, CHEK, FUSZ, IMTE, MTUU and HTBX. Could be bounces there in any of them, but huge tops. MTUU actually had a nice bounce. TIME-FRAMES? And today FSNN looks like a pump, with an upthrust to form.

HTBX –

 

 

 

 

From 5/8:

 

In yesterday’s comments we discussed my perspective about an upthrust potential in the SPY, a couple different ways to use it. My day was mapped out how to trade the SPY, for me that is using options. Some people use the leveraged ETFs. Either way works, I just prefer the huge volatility of the options market, especially the expiration week options. And then in that expiration week, I want to be short premium, not long premium. Sometimes I am long the options if I buy deep out of the money options, but my preference is to be short the options. Also, I often discuss this thing with using MAGNET points.

This is all discussed in this post.:

In the meantime, the volume on Friday’s rally really light, and SPY getting back into potential upthrust area. Maybe a rally, backup, and shoot for 268 magnet.”

Also increasing the probabilities of the MAGNET point working as a solid resistance is:

the volume on Friday’s rally really light

This magnet point concept stuff was also discussed on March 9, right into the all-time high in the QQQ:

Remember a few days ago I said QQQ has 170.80 on its radar – magnet point? Was that a good way to look at things? SPY has 278.90 on its radar. The exact pathway anything takes to get to its magnet points, that is what trading is all about.”

So again yesterday, the volume was light once more. This area is reaccum, the low areas are for buying for longer-term positions. My preference is just to trade this whole thing, if something very compelling comes along, I’ll attempt to put on a position.

The President is coming out with an Iran statement later today, no matter the statement, crude oil is in a major uptrend, the next big res is 75. I have constantly reiterated that the energy shares, not he majors, are an outstanding sector to be buying.

In a reply yesterday I discussed my trade in and out of BLNK, it was a 10%+ trade, so that part is good. I was specifically looking for a pure bounce trade, I did not believe it was setting up for a big move. But man was I wrong about that. I sold it at 3.85, it traded up to 5.50 premarket.

TNDM has been discussed several times, and along with HEAR extremely relentless rallies. AGEN also was relentless, but went all the way back down to where it started. Its long-term structure not that great. Just like TNDM. TNDM did have several SOSes, which is why I discussed it originally. HEAR has a better structure, but not great.

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

 

 

 

From 5/9:

 

With all of the drama around the President and Iran, crude oil is in a major uptrend as repeated again yesterday –

The President is coming out with an Iran statement later today, no matter the statement, crude oil is in a major uptrend..”

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:

I still have my SPY 268 short premium calls at 1.22. I’m trying to hold them til Friday, see if they expire worthless, as most calls do. Yesterday I explained the whole trade. Even with the SPY being unchanged yesterday, those calls were down 20%. My stop is at break even.

The 10 year yield back above 3%, the two year more new highs in yield.

As to BLNK, again with these small stocks, I don’t believe in any of them, the hype, the emotion. Even with some with great technology, ideas, creations, we can like all of that, but that is totally different from how to view the actual stocks themselves. About 1 in 100 will pan out. In other words, they are all shorts into the big rallies.

But those rallies can be amazing – and yes tradeable on the long side. And many become multi-week runners. Like with EBIO and EYPT, I discussed those a dozen times, originally near the lows of the big move, did not hear back from anyone that they traded them, really a shame.

NIHD discussed first on 2/28, at the arrow, the stock is 3 now, anyone trade any part of the run?

NIHD is continuing to run, sometimes they are relentless. The premarket high is 1.64.”

APRN a runner, with a nice setup underneath it, those are the technical conditions to look for.

HEAR discussed yesterday, up another 8%.

AMDA was in the premarket from May 4, discussed as being a huge top, along with a bunch more:

Recently discussed the “huge tops” in HTBX, FUSZ (after a huge run higher), CHEK. IMTE is next, as is MTUU, discussed that stuff yesterday. There are a lot of crappy stocks running higher in rocket ship fashion. Not great to see, but if the trend is up, even for a day or two, then I’m looking to buy into reactions or absorption. Yesterday’s runners were CLWT (traded it), VVPR, AMPH, AMDA, all crappy stocks..And CREG, held overnight, selling today.”

All of those stocks got hit, some got clobbered. But I was totally wrong about AMDA as to that immediate top. Yesterday it was a huge winner, went to another new high. I had an order in to short it at 4.40, could not get it.

For BLNK, did 2 trades in there yesterday, both bounce trade only mentality, one winner, one scratch. And again totally blew it as to the power of the rally. I totally believe it is a huge top tho. The stock is pure hype.

Also did a bounce trade in UUU – except it did not bounce, at all. Took a 10% loss, from the non-bounce bounce at 2.20

Last July I began discussing my belief that DRYS is entering a big accum area. And repeated that numerous times. I was long, position-wise, for awhile, sold that 2 months ago, the shippers are moving today. DCIX premarket action. TOPS also moving. And again with the big gap up stocks, unless you buy them in premarket and have some room, for me, I never buy that initial huge gap in regular hours, and don’t often end up buying them at all. But certainly wait til they establish themselves, and do not go to new lows for the day. Those are very low probability spring trades. Absorption and reaccum, that is what to look for:

 

 

 

 

 

 

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About traderscott 950 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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