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Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Profit From The Manipulation: Options Expiration Trades...
watch video here
Stock Chart Breakout On McDonald’s Corp $MCD...
Shares of McDonald’s Corp (MCD) are rising nearly 5% today on the back of solid earnings from Chipotle Mexican Grill (CMG). The fast food pickup/takeout game is alive and well as consumers are getting tired of cooking at home. On a technical basis, there is a McDonald’s stock chart breakout above the daily 50 moving average today. This likely gives it further upside to the daily 200 moving average at $201 in the coming weeks. This means there is the potential for another 7-8% upside in McDonald’s Corp until it hits a short/sell level.
As a swing trader, I accept the stock chart breakout, sitting back and letting it run higher in the near-term. Aggressive traders/swing traders can likely buy it and play the upside move. I will likely step up and short the key 200 daily moving average at just over $200/share.
See the chart here:
https://inthemoneystocks.com/stock-chart-breakout-on-mcdonalds-corp-mcd/
Gareth Soloway
InTheMoneyStocks
Chief Market Strategist
To See The Future, Look To The Stock Charts.
Nick Santiago #Podcast. Listen in now....
https://www.spreaker.com/user/appeal2/nick-santiago-16
Short Microsoft $MSFT: Here Is The Technical Level
As markets continue to rally, investors are becoming more confident. The vibe is now that COVID-19 will pass soon and it will be business as usual. In reality, that is unlikely. Until there is a vaccine, there will be no ‘business as usual’. Having said that, the rally can last a little longer. Microsoft is likely to head up to the major technical chart resistance at $178.50. That is my key short level to attack. Once there, I will pull the trigger. I will also begin shorting the S&P and NASDAQ 100.
Based on all technical cycle work, there is still another leg lower that could take us lower than the recent $SPY low of $220.00.
See the chart here: https://inthemoneystocks.com/short-microsoft-msft-here-is-the-technical-level/
Gareth Soloway
InTheMoneyStocks
Chief Market Strategist
Trade The Charts: S&P 500 Attacking Key Level
Investors need to trade the charts. If you can shut down emotion and just trade the charts you can profit in bull and bear markets. Emotion is the great profit killer. To put it to use, let’s look at the current S&P tracking ETF (SPY). We are currently attacking the $263.00, the same highs we knocked up against a week-plus ago. The last time the S&P traded into this level, it failed. This tells investors and traders that if the $SPY can close above $263.00, it will have broken out. The upside is likely to $274.00 as a minimum, this is a key gap fill. I even think the SPY could push through to the 50% Fibonacci retrace level at $280.00.
By using the charts, you can position your portfolio for these monster moves that will likely take place in just days. The gains that members have seen just compound how key using the charts are. Trade the charts and profit for life.
See the chart here: https://inthemoneystocks.com/trade-the-charts-sp-500-attacking-key-level/
Gareth Soloway
InTheMoneyStocks
Chief Market Strategist
Buy Signals On Airline Stocks But High Risk
There may be a glimmer near-term as buy signals on airline stocks show up. Stocks like Spirit Airlines Inc (SAVE), American Airlines (AAL) and Delta Airlines (DAL) all are hitting key technical levels. Delta and Spirit Airlines both filled major gaps on a classic retrace of their recent bounce. In addition, all airlines have major technical time counts hitting today. Time counts are cycle related and potentially signal a reversal, in this case back up. It is important to mention, these are all extremely high risk. The sector is moving on average 10% a day and it is possible for these factors to fail.
I am long some airlines today and will look to see if a pop comes in early next week. I am not looking to marry these stocks, just a quick swing trade. The buy signals on airline stocks does excite me and got me to accumulate small positions today.
See the chart here: https://inthemoneystocks.com/buy-signals-on-airline-stocks-but-high-risk/
Gareth Soloway
InTheMoneyStocks
Chief Market Strategist
"Master Trader Nick is Catching Knives and Hasn't Shed a Drop of Blood!"
LISTEN to this podcast:
https://www.spreaker.com/user/appeal2/nick-santiago-4-3-20
Worst Case Scenario: $AAPL Price Target $150...
Investors are trading through the most volatile market ever. Every investor in the world should pay attention to the Apple price target below.
As the world grapples with COVID-19, investors are trying to figure out how long the United States economy will be shutdown. The bottom line is this, until there is a vaccine, social distancing will have to continue. Even if cases shrink to just a few in the United States, if life returns to normal with people at restaurants, malls and work, the virus will spread again and ‘shelter in place’ orders will be needed again. A vaccine is likely a year away. With that knowledge we need to talk about the worst case scenario for Apple Inc (AAPL).
If the economy does not get back to normal for a year, it is likely the Apple price target is $150.00. This level would be a retrace to its long-term trend line that stretches back to 2009. With Apple already down from $330 to $240, many investors are looking to scoop up Apple here. Swing traders can play it nicely, but long-term investors looking to accumulate Apple may want to wait a little longer to see if the Apple price target could get it.
In terms of accumulating a larger position on Apple Inc as a buy and hold, this is where I will be waiting patiently.
See the AAPL chart here: https://inthemoneystocks.com/worst-case-scenario-apple-price-target-150/
Gareth Soloway
InTheMoneyStocks
Chief Market Strategist
Oil Tags Key Low Support In Commodity Crash
Oil prices crashed lower after a price war erupted between Saudi Arabia and Russia. With the backdrop of coronavirus, oil dropped as much as 30% in the overnight before recovering slightly. Down more than 50% in total from where oil was trading in January 2020 has created all out panic. While investors and traders may succumb to panic, spot crude oil (WTI) actually hit major support at the $30 level. This happens to be the same level it hit back in 2008. It is also a major line where US producers stop producing. That can likely curb some of the oil supply. In addition, one has to wonder if Russia and Saudi Arabia will come to their senses as they lose money, eventually deciding to agree on production cuts.
Having seen the chart, I bought oil down at these levels, expecting a near-term bounce. This is by no means a long term investment, just a near-term trade. I expect a bounce back to the $40 range in the coming weeks.
See the chart here: https://inthemoneystocks.com/oil-tags-key-low-support-in-commodity-crash/
Double Bottom Chart Pattern: Schlumberger $SLB...
Shares of Schlumberger (SLB) continue to trade near 52 week and multi-year lows. As the Federal Reserve does a surprise 50 basis point cut, the markets are expecting a recession in the next 6-9 months. The 10 year yield is now trading near 1% and many economists expect it to head lower. If there is a recession, Schlumberger will likely head lower still. There is a double bottom chart pattern emerging as a likely price target at $18.50. This is the major pivot low from 2002-2003. This is where investors should look for a longer-term buying opportunity on Schlumberger.
Amazingly enough, Schlumberger hit a at nearly $120 in 2015. It has been collapsing ever since. A move to the 2002-03 lows would be the level technical investors would expect to see a 1-2 year bounce off of and perhaps as much as a 100% upside move (back to $37). This technical double bottom chart pattern on Schlumberger (SLB) should be on high alert for every serious investor and trader over the next 6 months.
See the chart here:
https://inthemoneystocks.com/double-bottom-chart-pattern-schlumberger-slb/
Stock Chart Bottom Signal: Groupon Inc $GRPN...
Share of Groupon Inc (GRPN) collapsed lower by over 40% today after the company announced horrid earnings and guidance. They also announced a reverse stock split. While many investors have sold today, there stock is actually at a major support level worth nothing. In fact, there is a stock chart bottom signal that every investor should note.
As a technical trader, connect the low pivot from 2012 to 2016. When a line is extended, it hits the low pivot of today at $1.70. This is a major stock chart bottom signal for a near-term bounce. This is the only technical signal that can be found on the chart and smart money may want to look for a near-term bounce back to $2.00 in the coming days/weeks.
See the chart here:
https://inthemoneystocks.com/stock-chart-bottom-signal-groupon-inc-grpn/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
The Biggest Mistake For An Investor: Options...
Small and new investor make many mistakes. One of the biggest mistakes for an investor is to start trading options instead of stocks. The mentality of a small investor is to take their small investment account and go right into the options market. They do this because options tend to give the biggest returns. The common thought process is that the new/small investor can grow their account quickly. However, with big returns is mega sized risk. There is literally no way a new investor with no experience will have control of their emotions and be able to handle the crazy moves in the options market.
The combo of inexperience and risk in options trading equals losses. So a new investor with a small investment account makes the biggest mistake they can. The key here is the ‘get rich quick’ scheme. They want to turn their $2,000 investment account into $100,000 overnight. 99.9% of these accounts will go bust.
The smart decision is to build it slowly. Turn that $2,000 account into $4,000, then $8,000, then $16,000. Add money and compound the gains. While it takes longer, it is the safer way. In addition, this method had a high success rate. While I can preach this until I am blue in the face, most newer investors cannot keep the lure of fast money down.
Wisest advice I have ever given? Have realistic expectations and understand that building real wealth takes time. Invest/trade stocks instead of options. Options should only be used on fun money and as a hedge. For example, my personal options account is 1/10 of my swing trading account. Inside of that options account, I put only 2% of that account in each options position. I fully understand the risks and there for I only commit a tiny amount of money to options. This is what smart money does…
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
US household debt hits $14.15 trillion (a new record). Job openings dropped to a 2 yr low in December. Not a good combo, especially with stagnant wage growth. I see shades of 2008-09 all over again, but this time far worse - Gareth?
The Biggest Joke On Wall Street Is Boeing Co $BA.
There is little question that the biggest joke on Wall Street is Boeing Co (BA). The company has been non-existent in terms of doing business in over a year. They just reported that in January 2020, there were $0 orders placed. The rumors of the 373 Max coming back into service have been always 3 months in the future and the economy is slowing. Boeing will owe tens if not hundreds of billions to airlines that have had that 373 Max grounded for well over a year.
Economic news this morning on job openings in the US economy dropped sharply again for the month of December 2019. This tells us that a recession is likely a year or so away. It also tells us that Boeing Co is losing precious time. In other words, there is limited time when the economy will allow airlines to order new planes. The problems at Boeing are keeping these orders away and by the time they fix the issues, it is likely the economy will be in recession and no orders will come through anyways.
The fact that Boeing is even above $300/share is stunning and shows how much global liquidity is willing to dive into any large cap name. However, time is running out. Among many big investors, Boeing Co is the biggest joke on Wall Street. I have a downside target price on Boeing of $160.00 within 18 months.
See the chart here: https://inthemoneystocks.com/the-biggest-joke-on-wall-street-is-boeing-co-ba/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Key To Successful Trading: Don't Seek Revenge
Throughout the multiple decades that I have been in this business I have learned many things about trading. Simply put, the key to successful trading is to not make the same mistakes from the past. One mistake that many new traders make is trying to get revenge on a stock that they have lost money in. This is something that I’m guilty of myself early in my trading career. Let’s take a deeper look at this and why you need to be aware of it…
There were times when I would lose on a trade and then try to get even with the stock, as if it was a person that betrayed me. I remember getting angry at the stock and taking the loss personally. This was one of the worst mistakes that anyone can make. You see, when you seek revenge on a stock you can not think clearly. It becomes very difficult to even read the chart correctly and make a rational decision. This is a common flaw that occurs every single trading day. I hear novice traders talking about this all the time.
Remember, we cannot beat up or punish a stock. As a trader, all we can do is try to be on the correct side of the money flow. We are either long (buy side) or short (sell side) an equity depending on where we believe the stock is going. Do not take a loss personally. After all, the CEO of the company does not even know you are trading the shares of the stock, there is nothing personal about the markets. Not to mention, it is always easier to not face your mistakes head on while placing the blame elsewhere. But when you remove your ego and evaluate your mistakes with a clear mind, at that point you will grow and progress in whatever it is you want to achieve in life. Not to mention your happiness in general will increase as you learn to find positives in your mistakes.
The remedy for this stock market revenge problem is simply to follow the charts. Learn to read and understand the charts. This does not mean that you will never lose on a trade again, but it will help you put the odds in your favor. Trading is about following the money flow, not fighting the market. Stick with the trend as long as it tells you to. Then when the trend changes so can you. Until then, don’t try to seek revenge on a stock that you may have lost money in, that is a sure way to accumulate more losing trades.
Nick Santiago
Chief Market Strategist
InTheMoneyStocks.com
Starbucks (SBUX) Tests Key Level, Watch Out If It Breaks
Leading restaurant stock, Starbucks Corp (NASDAQ:SBUX), has been falling sharply since January 24, 2019. At that time, SBUX was trading as high as $94.13 a share. Since that high pivot, the stock has declined to $84.98 a share.
Traders should note that the stock now testing it’s 50-week moving average. This important moving average is major support and any weekly close below this level would trigger more downside for the coffee giant.
Starbucks has significant exposure to China and has announced that they will temporarily close half of its stores in China amid the Coronavirus outbreak. The next major support level for SBUX will be around the $75.00 level. This is where the stock broke out in June 2019. Often, past breakout levels will serve as major support when retested. Watch the chart closely and read it correctly as it will guide you to where the stock is headed next.
See the chart here: https://inthemoneystocks.com/starbucks-sbux-tests-key-level-watch-out-if-it-breaks/
Nick Santiago
Chief Market Strategist
InTheMoneyStocks.com
$BMY Head And Shoulders Pattern...
Check out the chart and how to trade it here...
https://inthemoneystocks.com/bristol-meyers-bmy-head-and-shoulders-pattern/
The Importance Of Goal Setting For Novice Traders
One of the most important things that anyone can do to be successful is to goal set. If you talk to anyone who has accomplished anything worth wild they have probably wrote down there goals at one time or another. After all, we all need a target to aim for when trying to accomplish anything in life. So yes, I highly recommend goal setting for everyone, especially new traders and here is more insight into why this is so important…
Goal setting is pretty easy to do. You simply write down what you want to have or do on paper. Then you write out a plan to achieve this goal and read it everyday. This sounds simple enough, but many people do not ever reach their goals or dreams despite goal setting. Why is that? You see, everything takes time and we live in a society where people want instant gratification. Just think about it, most people set goals around the new year holiday. Unfortunately, in about a months time those “new year resolutions” are usually just a lost memory. Think about how many people say they want to lose 20 lbs at the start of the year, a lot. These same people usually have the same goal every year and very few of them actually lose weight. Well, traders do the same thing when it comes to goal setting. They write down what they want to accomplish, only to forget about it in a few weeks. I was guilty of this myself in the early part of my career.
The best way to goal set for a trader is to really evaluate him or herself first. I can’t begin to tell you how many times someone had a $5,000 futures account and wrote down that they wanted to earn $1 million in the next six months. That is not realistic, you probably have better odds of hitting the lottery than making a million dollars in six months on a $5,000 account. A novice trader should aim for 3 to five successful trades in a week, that is a good goal for any novice trader to have. Believe me, that goal will not be accomplished by most novice traders in the beginning of there trading career. This business is tough and it requires a lot of study and hard work. I laugh sometimes when I hear people tell me they need to get into the trading business so that they can make millions of dollars. If it were that easy wouldn’t everyone do it!
The bottom line, novice traders should set goals that are attainable so they don’t get discouraged. Even setting a goal for a positive P&L by the end of the week or month is good. Trading is a business, not a casino, treat it as such and you will not become a statistic.
One of the biggest pitfalls that new traders make when they goal set is trying to make a specific amount of money every day or week. This is a big mistake and I’m guilty of this myself in the early part of my career. I remember writing that I wanted to make $500.00 a day and usually lost $300 a day. Then the days that I was actually up by a couple hundred bucks I would force a trade to get to that $500 level and I would lose the money I just made earlier in the day. I fixed this by writing a goal that I wanted to be positive by the end of the week and I did not focus on the amount of money that I needed to make. Even today, my goal is to just have positive trades by the end of the week, month and year. Believe me, when you get good at this business the winners take care of themselves.
Another goal that I set for myself that has changed my trading career has been using a stop loss. I wrote as a goal that I will always stop out of a stock if it closed below my stop loss level on a chart. Once I was able to do this my whole trading life changed. Before this goal was set, I would have a stop loss in my head but I would never abide by it. What a fool I was, but that was when I was a beginner and that is what most novice traders do. Anyone that does not abide by a stop loss is just a beginner, a rookie, not a true professional. Set that goal!
Bottom line, goal setting is a must for life in general. But when it comes to becoming a successful trader, you need to set goals with a purpose and they will help you live your dreams!
Nick Santiago
Chief Market Strategist
InTheMoneyStocks.com
Crude Oil Stock Chart Buy Alert
Investors and stock traders need to listen up. The crude oil stock chart is a screaming buy for a near-term bounce. Crude oil hit key near-term technical chart support today around $52.00. In addition, this is a major time count which adds to the odds of a solid multi-day sharp bounce. Investors and stock traders have an opportunity to buy the commodity itself, ETF’s or options for the bounce. This bounce should last between 3-5 trading days and net as much as 10% on the commodity.
The fall on crude oil started with tensions between the US and Iran calming and has ended with major fear of economic decline due to the coronavirus. With panic high, oil has fallen sharply and investor sentiment has swung too far to the sell side. The bounce should begin today or tomorrow.
See the chart here: https://inthemoneystocks-4977.kxcdn.com/wp-content/uploads/2020/01/Oil01.27.2020-768x651.png(58 kB)
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
2 of 3 Trillion Dollar Mega Caps Just Signaled Sell!
There are now three $1+ Trillion-Dollar mega caps publicly traded in the stock market. They are Alphabet Inc (GOOGL), Apple Inc (AAPL) and Microsoft Corp (MSFT). These three companies make up a total of approximately $4 trillion in market cap and are over 10% of the S&P 500 alone. These stocks are all up huge in the last year, with Apple adding over a 100% gain since early 2019. Investors are running into these stocks as the hype is growing daily. However, there is a major bearish signal that investors should pay close attention to.
The bearish signal is showing up on two of the three trillion dollar mega caps and could signal a major stock market top. On both Microsoft and Alphabet there is a daily topping tail that just formed. Yesterday, Microsoft put in a topping tail and today Alphabet put in a topping tail. For those that are not aware, topping tails signal a major top in a stock or market as institutional selling sell into the smaller investors buying, creating a long tail on the candlestick chart.
The reason this is worth taking note of is these mega cap stocks are the leaders in the market. Two of three signaling a sell and making up 10%+ of the S&P is definitely something smart investors should be fully aware of. In addition, these stocks have surged in value and are extremely overbought on both fundamental and technical analysis. Essentially, everyone knows a correction will come, but the timing has been in question…until now.
Based on the recent run in these stocks, a 10-20% correction is likely. This could easily equate to a 10%+ correction in the stock market.
See the chart here: https://inthemoneystocks.com/2-of-3-trillion-dollar-mega-caps-just-signaled-sell/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Risk Vs. Reward On Netflix (NFLX) Into Earnings
Netflix Inc (NFLX) reports earnings after the close of trading today. Analysts expect since $0.50 per share on $5.44 billion in revenue. The whisper number for earnings per share is $0.58. Should investors buy or sell Netflix into earnings? To figure this out, a true pro trader or investor must look at the risk vs. reward on Netflix. This is based on the stock chart heading into earnings.
While the stock has rallied higher over the last three months, Netflix has still not tagged an important gap fill on the stock chart at $362.00. Based on the current price of $338, it means there is a risk to being short of $24. What is the risk to being long? The stock has rallied from under $260 to its current $338. That means it is short-term overbought wish downside risk of $271. This means the downside net risk to being long is $67.
Overall Analysis Conclusion:
While the chart analysis suggests shorts have a better risk vs reward of Netflix, there is definitely risk to being short (to the tune of $24 loss). As a pro trader and investor this keeps me away from shorting it into earnings. I want at least a 4 to 1 reward to risk ratio. However, if Netflix rallies to $362 (gap fill) on earnings, I would consider shorting the stock at that point.
See the chart here: https://inthemoneystocks.com/risk-vs-reward-on-netflix-nflx-into-earnings/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
The Only Stock Market Indicators You Need To Use...
There are only a few real time stock market indicators that as a trader you must be aware of; they are price, pattern, time and volume. Let’s take a quick look into one of the most important and reveal how you should use it to your advantage…
One of the best real time indicators that a trader can follow is volume. There is a variety of ways to follow volume and I will share a few ways with you in this article. Volume in the capital markets is the total amount of shares or contracts of a security that was traded during a specific time. Traders will view volume on all different time-frames. Day traders may view the volume of an equity on an intra-day basis using a 1, 5, 10, 15 or 60 minute chart. Swing traders may use the volume of an equity on a daily and weekly basis. Longer term traders will likely look at monthly, quarterly, or yearly volume.
High volume reversals are often very meaningful. Most of the major bottoms in a market will usually occur on high volume. In fact, if you look at any major bottom or market low in the past ten years on the S&P 500 Index you will see heavy volume on the chart usually marked the low. This type of action occurs on all time-frames. Day traders also look for high volume reversals all the time for bottoms in stocks. This is why we often see a V-bottom pattern form when market lows are in place.
Unfortunately, market tops don’t always occur on higher volume, so picking tops using volume is more difficult to do. This is why there is usually a rounded or rolling top in the market or stocks before a major decline. Often, stocks will decline on heavy volume after earnings or some other news event, but this does not help traders catch that move. Either way, when a stock or equity declines on heavy volume it is a warning sign that the equity can trade lower. This is why all traders and investors should understand how to read charts. Understanding how to find major support / resistance levels will be critical when this happens.
Traders will usually watch for volume on breakouts and break-downs. When a stock breaks out or breaks down from a long sideways base on heavy volume it tells us that the move is just getting started. Breakouts or breakdowns on light volume often lack real conviction and potential follow through.
Traders and investors should follow volume on every stock or equity that they track or trade. Volume is a leading real time indicator. It tells traders so much each and every trading session. Traders can easily see and read the strength behind every market move with volume. This is a real time indicator that no trader can live without.
Note the chart here to see volume in action: https://inthemoneystocks.com/stock-market-indicators/
Nick Santiago
Chief Market Strategist
InTheMoneyStocks.com
Investment Style: What Is Swing Trading
Investors are always looking to build or advance their fortunes. While most investors hold stocks long-term, more and more are discovering swing trading. If done correctly, this method of investing can exponentially increase profits on a yearly basis. In this article, I will help investors understand what is swing trading? In addition, I will help investors understand how it can be a much more profitable method of investing?
Swing trading has to do with the time frame (how long) an investor plans to hold the stock. While long term investing means you hold for years, swing trading means you are holding for days, weeks or months. In general, swing trading profits would be a short term capital gain while long term investing profits would be a long term capital gain.
The beauty of swing trading is that investors can buy and sell stocks nimbly. This is done by buying support and selling resistance. A good swing trader can buy support and then sell resistance for a quick 10% gain in days. Once sold (in cash), they can either wait to buy the same stock again when it pulls back or find another opportunity, banking another 10% within days. This allows for incredible gains of 10% + 10% + 10%.. etc. In contrasts, a long term investor is lucky to make 10%+ per year on their portfolio. In many instances, long term investors buy high and then get scared when the stock falls during a bear market and sell for a loss. Swing trading can often avoid those pitfalls.
In understanding what is swing trading, investors should realize you do need to know technical support and resistance levels. This is fancy talk for understanding how to read a stock chart. Most investors will not have the knowledge to do this so following a good pro trader is key. If you swing trade correctly, it is not unheard of to make gains north of 50% a year on a portfolio.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
$TUP Stock Chart Break Out!
Shares of Tupperware Brands (TUP) are climbing through major resistance on the daily stock chart. This equates to a major stock chart break out as price has exceeded the daily 20 and 50 moving average and broke out above the upper trend line of the wedge. This is significant, and will likely take Tupperware Brands to a first target of $12.50.
Tupperware Brands Corp was a huge decliner in 2019, falling form a 52 week high of $39 to a recent low o $7.20. There are tons of shorts which will cover during this stock chart break out. Short squeezes add fuel to the fire of any move. Take note of the chart below and trade it accordingly...
Here is the chart... https://inthemoneystocks.com/tupperware-brands-tup-stock-chart-break-out/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
NASDAQ 100 Stock Market Correction Target Revealed Here...
The NASDAQ 100 (QQQ) has surged to irrational levels in the last month of 2019 and early 2020. Stocks like Apple Inc. (AAPL) are up over 100% in a year with a close to $1.5 trillion valuation. Shares of Tesla (TSLA) are up 125% in just 10 weeks and Beyond Meat (BYND) has surged 75% in just 5 trading days. This is clear irrational exuberance but that does not tell investors exactly when the party will stop. This article is not to tell you when it stops but rather give the NASDAQ 100 stock market correction target when it does.
Based on the calculations and charts, the NASDAQ 100 stock market correction target is $198.00. This would be an approximate 10% correction on the index from its current $220.45 level.
See the chart here: https://inthemoneystocks.com/nasdaq-100-stock-market-correction-target/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Spot A Stock Trading Market Top And Bottom...
Whether markets are making new all-time highs or 52 week lows, stock market investors are always trying to pick the top or bottom. I intend to lay out a simply way for investors and stock traders to spot a stock trading market top and bottom. Investors need to recognize that fear and green drive the stock market. This means that stocks can fall much more than anyone expects, just like stocks can continue to move higher for longer periods and much more than anyone expects.
To spot a stock trading market top and bottom there are key rules to follow. The first one is, you need insane greed or fear. When a stock market is making new 52 week highs, an investor should constantly hear bullish commentary in the media and from their friends. It should be to such a level where it begins to make you (the investor) begin to question yourself and your logic. The same thing applies to the downside. When a market is making new 52 week lows, bearish sentiment should be at an extreme. The media should be panicking and your friends should be crying and selling their positions. You (the investor), should be scared to buy.
Next, smart stock traders and investors should be following volume closely. As a market hits new 52 week or all-time highs volume is usually light until institutions start to sell. Then volume can increase dramatically. Couple abnormally higher volume near/at the highs as an indicator that big players are unloading to smaller investors who are buying. This is called distribution. When a stock or market is collapsing hard, at 52 week lows and insane panic is gripping things, look for an extreme amount of volume. This should be a multi-year high in volume and signals big boys buying while smaller investors throw the baby out with the bathwater.
Lastly, the confirmation of a major stock trading market top or bottom is reversal. Extreme greed and fear, plus heavy volume should yield price reversal. For example, if a bottom is in the market or a stock, price will likely flush initially on extreme fear, volume will surge and weak hands dump and big money buys, then price will reverse. Often a bottoming tail or reversal candle will form. This confirms the stock market bottom. Investors and traders can also look for stock or stock market tops by following the extreme greed and surge in volume, followed by a price reversal to the downside. This often will put in a topping tail or reversal candle.
When these three indicators are seen, investors and stock traders can bank on a market top or bottom.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
The Secret To Successful Trading...
Lately, everyone is talking about meditation. According to Wikipedia this is a practice where an individual uses a technique – such as mindfulness, or focusing the mind on a particular object, thought or activity – to train attention and awareness, and achieve a mentally clear and emotionally calm and stable state. This definition is a little long in my opinion, but it kind of sums it up. In the trading and investing business we deal with stress all the time. A trade or investment could go against you and anxiety can build up really quickly, this happens all the time. So if a person could learn to calm themselves down and relax when needed, it will certainly be beneficial to their health and to their career.
Many profession traders and investors have been meditating for years now. One of the most famous hedge fund managers in the world is Ray Dalio. He is the founder of Bridgewater Associates, this is the largest hedge fund in the world. Dalio says that meditation allows him to think more clearly and creatively when making decisions. If a billionaire hedge fund manager is mediating it might just be a good practice to do. There are also countless successful people that have been meditating for years with good results.
In 2005, I began my own form of meditating. Surprisingly enough, after a couple of years of practicing meditation I really became addicted to it. Often, when you think of meditation you think of a Buddhist monk in temple chanting for hours, but it does not have to be like that. There are so many ways to meditate that I honestly do not believe there is a right or wrong method. Personally, I just try to focus on my breathing and let all thoughts evaporate. Really, it consists of a series of deep breathes. First, inhale until you expand your mid-section(belly), then follow with a slow exhale. This must be done in a quiet place at first. Later, when you get better at meditation you can almost block anything out and do it anywhere. Sometimes I change up the rhythm of the breath. Just try different things with breathing, there is no one way or method for everyone. Meditation seems to calm my mind and allows me to handle the everyday stresses of life more easily. In fact, if you ever watch an athlete under pressure you will notice that they will usually take a deep breath before performing in a pressure situation. Just watch a basketball game when someone is at the free-throw line, you will see the deep breath before the shot is taken almost every time. I try to meditate every morning for about 10 minutes and if I can do it for a few minutes throughout the day I will. You can even meditate to classical music or binaural beats. Sometimes you can get even better results with other sounds, just experiment on what is right for you.
So now you know that meditation IS for everyone. We all come under stress every single day and could use some relief from these pressures of life. I’m a firm believer that meditation has helped me. I hope you give it a try and see how it does for you. Remember, like trading or anything else that you do in life, this will require practice. Do not think you can meditate for one time and get results. It does not work that way, you will need to commit to the practice everyday in order to see if it works for you. But once you do, I am certain the quality of your life will improve.
Nick Santiago
Chief Market Strategist
InTheMoneyStocks.com
Stock Trading Mindset For Endless Profits
To make money in the stock market, it takes a special stock trading mindset. Anyone can make money in a bull market, but the best traders and investors make money in bull, bear and choppy markets. All these stock traders and investors have one thing in common, they have a specific mindset that helps that make endless profits.
Understand that these focused traders and investors do not profit on every trade, they are just purely consistent. A great average for winning on trades is 70% or better. That still means they will have 3 losers out of every 10. Even with this batting average, these focused stock trading pros still make millions a year. Their mindset is clear, they accept that not every trade will be a winner. They have also traded for so long that they know that if they have one, two or even three losers, they will maintain their average of 70%, so keep finding new opportunities, it all works out year after year. The worst thing a new trader or investor can do is get scared. Scared money never makes money.
Another key mindset is to keep expectations realistic. The mindset of a great stock trader and investor is to hit singles and doubles. This means that they are not looking to bank 100% on a trade or even 50%. 10% here, 15% there and even a smaller 5% winner is great. Investors and stock traders that try and hit home runs will lose 9 out of 10 times and be broke. Go into a stock trade or investment looking for a realistic target. Once achieved, bank it and move on.
Possibly the most important mindset and strength of the best traders and investors in the world is to not get caught up in the hype. Some of the best profit opportunities is to short a market when the technicals signal overbought but the hype and greed is insanely loud. Every analyst may be raising target prices and the talking heads on TV are pumping how amazing the market is. While average investors are jumping long this market, the best traders and investors in the world are shorting. It is the hardest trade in the world, but their focus and mindset allows them to see through the hype. The same thing applies to periods of massive fear, when all of Wall Street is running for the hills and panic is gripping the investing public. These are possibly the best times to buy stocks. It takes incredible discipline and focus to avoid the hype and accumulate stocks.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Stock Trading Mindset For Endless Profits
To make money in the stock market, it takes a special stock trading mindset. Anyone can make money in a bull market, but the best traders and investors make money in bull, bear and choppy markets. All these stock traders and investors have one thing in common, they have a specific mindset that helps that make endless profits.
Understand that these focused traders and investors do not profit on every trade, they are just purely consistent. A great average for winning on trades is 70% or better. That still means they will have 3 losers out of every 10. Even with this batting average, these focused stock trading pros still make millions a year. Their mindset is clear, they accept that not every trade will be a winner. They have also traded for so long that they know that if they have one, two or even three losers, they will maintain their average of 70%, so keep finding new opportunities, it all works out year after year. The worst thing a new trader or investor can do is get scared. Scared money never makes money.
Another key mindset is to keep expectations realistic. The mindset of a great stock trader and investor is to hit singles and doubles. This means that they are not looking to bank 100% on a trade or even 50%. 10% here, 15% there and even a smaller 5% winner is great. Investors and stock traders that try and hit home runs will lose 9 out of 10 times and be broke. Go into a stock trade or investment looking for a realistic target. Once achieved, bank it and move on.
Possibly the most important mindset and strength of the best traders and investors in the world is to not get caught up in the hype. Some of the best profit opportunities is to short a market when the technicals signal overbought but the hype and greed is insanely loud. Every analyst may be raising target prices and the talking heads on TV are pumping how amazing the market is. While average investors are jumping long this market, the best traders and investors in the world are shorting. It is the hardest trade in the world, but their focus and mindset allows them to see through the hype. The same thing applies to periods of massive fear, when all of Wall Street is running for the hills and panic is gripping the investing public. These are possibly the best times to buy stocks. It takes incredible discipline and focus to avoid the hype and accumulate stocks.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Trade It: Facebook Inc $FB Nears Key Resistance...
Shares of Facebook Inc (FB) continue to surge higher in today’s action. The stock hit a high of $215.57 as of this article and looks like it can continue until it tags a major gap fill on the daily stock chart. This gap fill is associated with the pivot top form July 2018 when Facebook reported earnings and guidance that shocked the market. Gap fills are notoriously good levels of resistance and occurs when a stock is extended and finally closes the gap. This will happen on Facebook at approximately $217.50. This area is also the all time high on the stock.
How To Trade It:
Investors and swing traders should look to short the stock at gap fill. A downside target of $195-$190 is likely within weeks of this level. A stop of $225 can be used to isolate down if the gap fill resistance fails. This gives a great risk/reward trade setup for investors and swing traders.
See the chart here: https://inthemoneystocks.com/trade-it-facebook-inc-fb-nears-key-resistance/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
The Importance Of Limit Orders
Many average investors do not understand the difference between a market order and a limit order. When buying or selling a stock, the difference is huge. Using a market order instead of a limit order could cost you big. Market orders give you whatever price the stock is being offered at when your order reaches the electronic market place. A limit order gives you a specific price of your choosing.
Why A Market Order Is Risky...
Market orders are most risky for investors on thinly traded stocks (small caps). For average investors, this often times allows for a bad entry price when there is a wide spread. The spread is the difference between the bid and the ask (what buyers are willing to receive and what sellers are willing to pay. A market order entry on a stock with a bid of $2.20 and an ask of $2.40, with a last print of $2.25 will be $2.40. This is horrid for the investor or stock trader. On larger stocks like Apple Inc (AAPL), the algorithms can cause entries to be multiple pennies worse by pulling the offers in the split second between when you click the market buy button and when the order actually hits the market and gets filled. For instance, the spread on a stock could be $50.05 x $50.07. An investor doing a market order thinks they will get $50.07 but just as they click the buy button, the $50.07 gets pulled and it gets filled at $50.10. This happens millions of times a day as the algorithms look to capitalize on millisecond moves they can create.
Why A Limit Order Is Best...
A limit order on the buy or sell side gives control to the investor or stock trader. It takes control away from the institutions. If you put a limit buy order at $5.00, the only price you can get filled at is $5.00 OR better. This means you know your worst case scenario is $5.00 as an entry price. The algos cannot play games, the spread does not matter, you decide your entry price. There is always a chance you do not get filled, but having control is much more important as an investor.
How I Handle Trading With Limit Orders...
I ALWAYS use limit orders to buy and sell stocks. I have traded for 25+ years and this is the key. When a stock is trading with a bid of $25.45 and $25.47, and I want to buy it this second, I use a limit order. I place my limit order at $24.47 (at the ask). This ensures that I get the shares being sold there but if the algos play any games, I will not fall into the trap and get a worse price. In addition, by using a limit order, the algos know not to play games because I will not take a higher fill. Sometimes, I even get a better fill. This is a way to take the shady games away from a stock and the institutions. On a small cap that is thinly traded, I always use limit orders as well. With a stock trading at $2.20 bid by $2.40 ask, I will usually put my order at $2.21. This ensures that any seller will fill me first, since I am top bid now. I also use a little known tactic that most advanced trading platforms have. They allow you to only ‘show’ a certain amount of shares on the level II (which other investors can see). If I want to buy 10,000 shares, I will only show 500 shares on the bid at a time. This keeps other investors from front running me, seeing the big size buy.
Using limit orders for stock trading and investing is by far the smartest thing you can do. Over time it saves you thousands if not millions of Dollars.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Know Where To Place A Stop Loss
One of the worst mistakes a trader can make is to not have a stop loss in place on any position they are in. The legendary trader, Jesse Livermore, would use a maximum 10% stop loss on all positions. When he broke this rule it was when he took a big loss in his account. He said that a 10% percent loss never really bothered him as he would make it up on the next trade.
Learning how to survive to trade another day without incurring unsustainable losses is what will lead to you become consistently profitable in the future. The 10% stop loss rule is a good stop loss percentage to stick to, especially if you do not know how to read a chart. If you learn how to read and understand charts then you can have a much smaller stop loss in place. Over the years I have realized that the best place to put a stop loss is below a major pivot or major support level if you are in a long trade. By doing this you can actually have a much tighter stop loss than 10% and this will help every traders P&L (profit and loss).
STOP LOSS TIP: Now here is a simple rule that you should follow. The stop loss should be placed or based on the chart which the trade is keyed off of. For example, if the pivot low support level is on a daily chart, then you must place the stop loss on a daily chart closing basis. In other words, if the stock you are trading closes below the major pivot low on a daily chart close, then you move out at the close of the session or the next trading day. If the pivot low stop loss is on a weekly chart, then you wait for a close below that level on a weekly chart basis. The same rule goes for intra-day trading as well.
Novice traders should practice this first by paper trading. By doing this you take on no risk and can see for yourself how major pivots and major support levels get defended by the institutional money. Remember, it is the institutional market makers that move stocks. When you start out in this business it is so critical to learn all that you can. This is a very humbling business even for the most seasoned traders, so get educated.
See the chart here: https://inthemoneystocks.com/know-where-to-place-a-stop-loss/
Nick Santiago
Chief Market Strategist
InTheMoneyStocks.com - Since 2007
Retrace Buy On NIO Inc (NIO)
After a massive run in shares of Chinese electric car maker NIO Inc (NIO), investors are asking where to buy it again. The stock ripped from $1.20 to $4.90 between October 2019 and December 2019. After hitting $4.90, NIO is pulling back solidly. This is what you want to see as an investor or swing trader.
Essentially, investors interested in buying want profit taking and digestion of the massive move. The question is, where does the chart say to buy it again. The answer is $2.70. This will represent a retrace to the ‘scene of the crime’ breakout on the stock. This is the point where NIO Inc busted through a major gap fill and surged nearly 100% in a day.
At $2.70, NIO Inc represents a strong buying opportunity for the next bigger move up above $5.00. Stock investors and traders looking to profit will accumulate starting here.
See the chart here: https://inthemoneystocks.com/investor-stock-chart-retrace-buy-on-nio-inc-nio/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Retrace Buy On NIO Inc (NIO)
After a massive run in shares of Chinese electric car maker NIO Inc (NIO), investors are asking where to buy it again. The stock ripped from $1.20 to $4.90 between October 2019 and December 2019. After hitting $4.90, NIO is pulling back solidly. This is what you want to see as an investor or swing trader.
Essentially, investors interested in buying want profit taking and digestion of the massive move. The question is, where does the chart say to buy it again. The answer is $2.70. This will represent a retrace to the ‘scene of the crime’ breakout on the stock. This is the point where NIO Inc busted through a major gap fill and surged nearly 100% in a day.
At $2.70, NIO Inc represents a strong buying opportunity for the next bigger move up above $5.00. Stock investors and traders looking to profit will accumulate starting here.
See the chart here: https://inthemoneystocks.com/investor-stock-chart-retrace-buy-on-nio-inc-nio/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
How To Trade A Double Bottom For Profit...
The simplicity of profiting in the stock market is amazing. Investors that educate themselves, profit. No investor or stock trader every knows everything. I have traded for 25+ years and I am still learning every day. The amazing thing about it is, the more your learn, the more you profit. Even at this stage of my trading and investing career, I am learning more and increasing my profits.
In this lesson, we will look at the technical chart double bottom. Double bottoms are classic, easy to spot pattern formations that are bullish. Below I will lay out the keys to understanding and spotting a stock chart double bottom that has a high reward, low risk rate.
1: The first low MUST be a 52 week low or all-time low. This is important as they are the strongest pivots.
2: The stock then must bounce significantly (5% minimum) and not retrace to the low for at least a two week stretch. This creates the basis for a double bottom to occur.
3: The stock/commodity/market/currency must then come down at hit the previous low or make a slightly lower lower.
This creates the double bottom and buying opportunity. Investors should buy the exact low or even a slight cross below. For strict investors and stock traders, the stop would be at confirmation (taught in a different lesson) below the double bottom, or maintain a 5% stop loss on the trade. Investors and traders can use this technique to buy stocks with explosive upside potential.
Note the chart below...
https://inthemoneystocks.com/investor-education-stock-chart-double-bottom/
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Investor Education: Stock Chart Wedge Pattern
Learning stock chart patterns leads to increased profits. Investors and stock traders who expand their knowledge will continue to expand their bank accounts. In today’s investor education piece, we will go over a stock chart wedge pattern (triangle pattern). The wedge pattern alerts investors to consolidation in price. In other words, price action is being digested before the next big move. Will the major move big up or down? That is determined by whether price breaks up or down out of the wedge pattern.
Wedge patterns only form when you can clearly connect all the recent major highs and all the recent major lows. It creates a wedge or triangle pattern. This means price has to be making lower highs and higher lows. This is important because an investor must draw straight lines creating the wedge. The reason for the straight lines is to give a basis to the investor or stock trader of a definite breakout/breakdown point.
Note the diagram below: https://inthemoneystocks-4977.kxcdn.com/wp-content/uploads/2020/01/Wedge1.png
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
ALERT: Tupperware Brands Corp $TUP Bullish Formation.
Shares of Tupperware Brands Corp (TUP) have multiple bullish pattern formations signaling a sharp rise within the next month. The stock is currently trading just above $8.50 and the calculated target is $10.50. That is a nearly 25% upside target in the near-term. The pattern formations are an inverse head and shoulder with a cup and handle pattern and bull flag. This is a beautiful stock chart pattern for investors and traders looking to profit. A breakout to the target occurs when Tupperware Brands Corp trades above $8.80.
See the chart here:
https://inthemoneystocks.com/tupperware-brands-corp-tup-bullish-formation/
Investors Profit By Learning The “Three Day Rule.”
True masters of the stock market know all the rules and abide by them. In addition, no investor ever learns everything. Those investors and stock traders that keep studying and learning, continue to increase their profits on a year over year basis. One of the best and most important rules to learn is the ‘Three Day Rule’.
Stock market investors always want to buy a stock that gets knocked down sharply. The ‘on sale’ emotion grabs us hard. For example, if a stock falls 20% on earnings, many investors rush in to buy the stock, thinking it will snap back. They think a 20% discount makes it an obvious buying opportunity.
In reality, there are specific reasons why the ‘Three Day Rule’ tells you to wait a full three days to buy the stock. First, margin calls will likely trigger in some investment accounts. This will create further selling on day two and day three (following the initial day one fall). In addition, hedge funds holding the stock that are selling because of the change in outlook or negative news cannot unload their large positions fully in one day. In general, Wall Street takes a full three days for the sellers of a stock to exit completely and calm to reappear.
The ‘Three Day Rule’ tells investors and stock traders to wait a full three days before buying a stock that has been slammed due to negative news. By using this rule, investors will find their profit expand and losses contract.
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
ALERT: $AAPL Putting In Top Signal!
Shares of Apple Inc (AAPL) are likely putting in a major top today. There is a topping tail forming on the daily chart, a clear bearish, top signal for stock chart traders and investors. Apple is up more than 100% from the lows of 2019. The last $20-$30 run in Apple is due to end of year window dressing. This is where fund managers add the best performers in the stock market to their portfolios, showing their clients they had the stock on the end of year statement. While shady, it is legal and happens every year end with the best performers.
This end of year run is also helped by investors being unwilling to sell Apple into year end because they do not want to pay the tax on the gain for 2019. This creates somewhat of a vacuum as minimal sellers and lots of buyers push the stock up exponentially. Please note that in the new year, Apple will see a major unwind of this move, likely retracing in 2020 to a Fibonacci retrace of near $240.00. Many fund managers are waiting until the beginning of January to sell Apple based on its massive P/E expansion with minimal to no growth. To put this into perspective, Apple traded for years at a P/E ratio of 12-14. It currently sits near a P/E of 25. At a valuation of near $1.4 Trillion Dollars, Apple has been moving higher simply on end of quarter/year window dressing and as sellers look to wait until the new year to avoid paying taxes this year on their big gains.
See the chart here: https://inthemoneystocks-4977.kxcdn.com/wp-content/uploads/2019/12/AAPL12.27.2019.png
Gareth Soloway
Chief Market Strategist
InTheMoneyStocks.com
Beware Of Trading Recent IPOs
It really is amazing when you see how excited people get when a hot IPO (initial public offering) is scheduled to be released. All of the hype and media attention seems to get people giddy about buying a company that usually does not even earn a profit. Think about it, a company usually comes public in order to raise capital. They will then use the money they raise to grow the business and ultimately make a profit in the future. Sure, there are many successful IPOs throughout the years, but there are also many failed IPOs as well. As a trader, all we need to do is understand the game and keep the odds in our favor. Let’s take a look at how we can do that regarding IPO’s…
This year was hot for IPOs. Companies such as Uber (UBER), Lyft (LYFT), Beyond Meat (BYND), Pinterest (PINS), Slack (WORK), Zoom (ZM), Crowdstrike Holdings (CRWD), Peloton (PTON) and others started traded. Many of these stocks are actually trading below their IPO price. To any smart technical trader, one who reads the price performance of a stock for the purpose of locating the best entry and exit points; it is very difficult to trade a stock that does not have a long history. There simply is no past chart data to work off of to discover a proper price for the equity. Therefore, if you buy stocks in this manner, you are simply hoping for it to trade higher. The last time I checked, hope was not a good strategy for finding winning stocks. (That was me being subtle, there is no room for “hope” in trading and investing as “buy and hope” is a failing strategy).
Personally, I cannot trade a stock that has not been around for at least a year. Typically, I prefer to trade in stocks that have at least a five year history in the public market. I once read that Warren Buffett does not participate in the IPO market and that should be noted by most traders and investors. Now some people might have that gambling bone in their body and enjoy the rush of participating in an IPO. I’m not a gambler, I’m a trader. The difference is that the SMART trader has the odds in his favor, while the gambler does not.
For those junkies who need the IPO action, here is one quick tip that many traders should remember: if the IPO is easy to get into, that is typically a clear sign that it is going to be a flop and likely sell off after it begins trading. I have seen this happen so many times.
Here’s the moral of the story, I will say it again, smart traders seek to keep the odds in their favor on every trade they take, so how can you expect to do that when trading most stock IPO’s? (you can’t). Consider that and beware of trading recent IPOs.
See the chart here: https://inthemoneystocks-4977.kxcdn.com/wp-content/uploads/2019/12/UBER-12.20.19.jpg
Nick Santiago
Chief Market Strategist
InTheMoneyStocks.com