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Adam Montana Weekly 29 April 2020


Adam Montana
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Today was another bad close in the Stock Market on the news that President Trump stated he doesn’t think China was going to abide by the trade agreement. He said he would know in about 2 weeks.  Great, more uncertainty..  The market does not like uncertainty.  If President Trump throws a bunch of tariffs on China then the History Lesson of the 30’s will have been lost.  Putting up Tarriffs in this environment will be a horrible outcome for our economy just like it was in the Great Depression.  Keep an eye on this situation, the war of words between China and the US reminds me of the Cold War era of the 50’s -80’ with Russia.  No one wins in War but that’s where we might be headed if cooler heads don’t prevail.  Read and understand the news, the world has entered a new paradigm since the CV outbreak.  Everything has changed and maybe, just maybe that is what the World Elites truly want.  Maybe this is proceeding exactly according to China’s 2025 Economic Plan.  I’m not trying to scare you, I’m just thinking out loud and sharing some thoughts.

 

Today I traded Bynd several times and it was a good day.  Some people ask me why I Day Trade.  It’s real simple, I like the DRAMA and the challenges.  It’s never easy, and it requires you to stay on your toes.  I love it and I hate it.  Would I rather Swing Trade or Go Long 3-5-10 years.  Absolutely, but NOT in a Bear Market.  There will be a time I will do that but not yet.  During Earnings Season I pay attention to the winners.  Yesterday BYND, Beyond Meat, had solid earnings and more important Forward Guidance.  That’s why I traded it today.  While some Sectors are getting beat up unmercifully ( Hospitality, Oil, Retail) others that some are calling the “Stay at Home Economy” are doing quite well.  Some of those stocks are NFLX, ZM, ATVI, TDOC, DOCU, AMZN, DPZ, MSFT, PTON, ROKU, SHOP,  Earnings and good forward guidance gives you an opportunity to try and reposition into better quality stocks.  In this tough earnings time some companies are doing quite well.  Stocks like ABT, PYPL, BYND, TWLO, CHGG, LYFT, GDDY, NVDA, CRWD, CRM, VEEV, and so many more are stocks to consider when things begin to turn.  When some people like to be totally negative I like to try and be positive and forward thinking.  I preach caution but I also preach prepare, study and look for opportunities.  They are out there and the USA is still a great Capitalist Country for those who embrace Freedom, Work Hard, and are ready to Seize the opportunities when they arise.

 

I want to give a shout out and a big thank you to Adam for allowing us to vent, rant and share our experiences on this site.  This site has some very good people and some real smart people.  I was bouncing around DV’s last week and I came across the articles on Crypto Currencies by CL, 6ly and many others.  I own some Bitcoin but haven’t been all to keen on it until I read those articles.  It inspired me to do a bunch of reading and asking around to the point that I decided to buy several other cryptos and added to my Bitcoin investment.  I didn’t go crazy, I plan to add more over the coming months. I’m filtering in just as I do any investment.   Thank you to CL, and 6ly, NEPats, and all the others for sharing their research.  This investment may not be for everyone, it is still a Speculative Investment with a larger degree of risk than other hedging type of investments like gold or silver.  When I read about Fortune 500 Companies including all major US Banks gearing up I’m willing to roll the dice.  Going E Digital currency is the future in my opinion.  They were just waiting on the technology to get up to speed and we are almost there from what I’ve read.  Do your own DD and understand the risk involved.  I’m not cheerleading or telling you to go nuts and bet the ranch.  Stay positive in a tough time and Open your mind to new opportunities.  Read, learn and think about embracing the future.  

 

 

 

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On 5/4/2020 at 11:01 AM, Pitcher said:

Got a real nice trade in Roku today but the Market is still under some pressure. It’s held up so far today and if we don’t get a big selloff this afternoon maybe we go higher tomorrow.

 

On 5/4/2020 at 4:45 PM, Pitcher said:

In my post above I forgot to mention another key indicator.  When I was watching stocks go straight up from Nov-Jan I noticed the 30 year was going lower.  That’s when I began to suspect a blow off top run.  When we got below 1.00 I knew we were in trouble. Currently we are in the low .60’s.  If you see this rising consistently that will give you a decent idea the Recession, Bear Market is easing.  I’m not so sure that’s going to happen any time soon because the Fed has already signaled it plans on leaving rates very low for some time.  Ouch.  

 

On 5/5/2020 at 11:29 AM, Pitcher said:

The big boys played a dirty trick on traders today.  They popped us up pretty good pre market and then took us sideways or in the case of oil, they shorted em down.  I just Trade what I see and I shorted FANG, Diamondback Energy for a nice trade.  It’s been  absolutely the toughest Market to Trade since 08-09.  One must tread lightly .

 

Thanks Pitcher for your posts and insights...Be blessed Brother ... RON:salute:

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23 hours ago, MEP01 said:

Just curious... Why don't you just park it? Do you thrive on it that much?

Just wondering...

 

Great Question.  I used to do that but got tired of the lousy returns my Financial guy was giving me. I also got tired of losing 35-45% of my money while my guy sat there doing squat during the big selloffs in 2000, 2001, and 08-09.   Yes, I got it back on every sell off but it took 5-7 years to get it back.  I’m too old to be losing that much money while the “expert” does nothing to mitigate my loses.   I thought I could do better on my own and I have, by a huge margin.  (after a few years of learning).

 

It’s something most people are not willing to do .  I get it but I don’t understand the mentality.  Most people spend more time deciding what movie to watch over learning what they are invested in.  We just turn our retirement over to people that really aren’t that good.  Buy and hold is not a very smart strategy imo.    

 

The learning curve can be tough but mostly because there is so much misinformation generated by people who want to make Trading some big mystery.  I like studying, analyzing and learning.  During Bear Markets or even sideways markets I don’t hang around.  I can more than makeup what dividends I lose by Not being in the market by Day Trading.  Plus I don’t have to fret losing 35-45% in these brutal sell offs.  

 

I made the correct decision for my retirement.  I’m pleased with what I have done and every investor does it his/ her own way to meet their goals.  

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10 hours ago, boosterbglee said:

Pitcher........Appreciate you sharing your thoughts and experiences:twothumbs:

 

Dittto! Thanks, Pitcher. 

A past co-worker got so good at it, he started doing it full time. Then, his family started investing in him.

I guess it is something you have to stay on top of, constantly.

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Thank you Adam.  I don’t mind sharing.  Most Everyone on this board is sharing their ideas and expertise.  I just want to chip in what I know from my trading experiences.  

 

Twlo, played it today and all I can say is Wow.  

 

Good Earnings and good forward Guidance for higher earnings, that’s what you invest and trade in.  .  Yesterday it was BYND today it was TWLO.  I Day Traded them and left a few shares behind to Swing in both, the House Paid for these Swings!!!!  That’s the way the Big Boys do it and I learned from one of the best.  

 

 

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2 hours ago, MEP01 said:

I guess it is something you have to stay on top of, constantly.

 

It’s like anything you get into.  If you dabble in it you probably won’t be very successful.  Like anything in life you have to commit, be dedicated, be consistent in your work habits and you have to believe.  Most people will chunk their dreams when the going gets tough.  I almost did but the Believe part wouldn’t let me quit.    

 

When I retired I thought I knew what I was doing and figured I would kick a**.  Well, arrogance doesn’t do well in the Stock Market.  I lost 50k in the first 6 weeks.  I wanted to quit, how could I be so stupid and foolish to think I could trade my own portfolio.

 

 I had some serious soul searching and came to the conclusion that I needed more education and better everything, including my attitude.  My first year was a disaster, my second year wasn’t much better.  In year 3 I didn’t lose money which was awesome.  My relatives would say, “ how did you do this year”. When I so proudy stated “I didn’t lose a dime” they would ask how much I made.  Again in a proud voice I said, “about 5k”.  One of my in laws actually called me a “Putz”.  I didn’t care 5k was a win and I knew I was headed in the right direction.  In year 4 I became more than respectable and in year 5 everything just came together for me.  All the heartache, sleepless nights, the angst, the horrible losses just went away.  It was almost surreal, like someone turned on the lights.  The work, dedication, commitment, and belief that I could master the trading deal finally clicked in for me.  I wouldn’t want to go through that again but I’m glad I did.  

 

BTW, my in law apologized for calling me a Putz.  I told him no worries,  that his statement just made me more determined.  He asks for advice every now and then and I tell him to go talk to his Financial guy, the same guy that has helped him earn a whopping 5% over the last 20 years. 

 

 

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D0B1AAC3-0A80-4A14-B5D3-DEFDDD2F056D.thumb.jpeg.1d5255b37526fc9ee7c6195516ec917a.jpeg

 

 

The S&P is at Resistance.  We need to break on through and start heading higher.  If we don’t I’m afraid we might go back down to the gap circled on my chart the first week in April. We have been in a trading range for almost a month now just churning waiting for news.  We have too much Fed backstop to go back to the March lows but we really aren’t near ready to go back to the highs of a few months ago imo.  So we wait and churn in our trading range 2700-2950 ish. 

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On Monday I posted that we were at a Resistance point and if we didn’t punch through we were looking at a double top pattern and we might be headed lower.  We couldn’t punch through and now we are headed lower. We have breached the Ema 20 which is no bueno.  

 

Next support is the bottom of this latest trading range at 2727.  If we breach that the 38.2 Fib line ( 2636) is the next support.  If we breach that we’ll probably test the low on 4-2-20, which will then fill the gap created on 4-6-20. (circled in chart above)

 

 

I’m not too worried. We are getting into a summer trading which can be easily manipulated due to lower volume.  We have a lot of Relief from the Fed and our Government backstopping the economy, so the real news is still the CV and the reopening of our Economy.   It’s time to sit tight and see what happens.  I closed my 2 Swings yesterday.  Starts and Fits, that is a typical Bear Market and this is going to be a tough one.  This CV Deal is brutal.  We still need more and reliable testing, better Therapies and a Vaccine that works.  These things take time.  Hang in there!!!

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B660DA60-AC5A-482F-8E93-8514757A945E.thumb.jpeg.6ea7871559b106d357922b5f53ed98ce.jpeg

 

 

I have to admit today’s rally surprised me. We started off with another drop pre market but the day turned and closed very nicely.  We stayed in the range for the last month and bounced. That’s a good sign.  Even with all the dire news from Dr Fauci and Fed Chair Powell we held the range AND BOUNCED!!!!  My big play today was CTAS.  Sometimes the market gives us a gift.  That’s why we stay positive and look for opportunities.  I Trade what I see and by gosh today I saw a lot of green. 

 

One other note, the RSI at the top of the chart is in the buy zone. It’s been there for some time  It’s flat so I’m hoping for a pop but like anything that trends sideways you MUST watch for the “cheese” at your head.  ( baseball term to watch for a Fast Ball thrown at your head)

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F8DAD720-AB7B-4A3A-9E91-6E6C33570A91.thumb.jpeg.6ae2128c35f3dc01f111bc78a0936869.jpeg

 

 

2DCFD3D6-4E00-465C-A73E-E11640D80261.thumb.jpeg.a01051482c8b0053a9414a10105d2bfe.jpeg

 

 

 

Above are 2 charts of the S&P 500.  Both tell the same story, just a different visual.  The top chart is from Stock Charts.com and the bottom one is off my Trading Platform, TC2000. On my chart you can see the trading range defined by the Red line or top of our current range and the Green line which is the lower end.  For over a month I’ve said this market is news dependent and it still is trading based on the latest news story.  It should be very clear to see this churning rangebound market.  It appears the market has made its low and is waiting to see how the reopening of our economy goes.  I’m not real sure when we went from “stay at home to flatten the curve” to “ stay home until there is a cure”, but that’s what we are being told in many states.  I’m not going to get Political in this piece but I think you all get my drift.  

 

On my chart you will will see we sort of broke out yesterday and today was a consolidation day as the market gave some back.  I’m hoping we break through that red line and close we’ll above the 200 simple moving average this week (dotted teal line above the Upper range red line). I’m not sure we have enough good news to push this market to much higher.   This is going to be a real battle and I think we churn for a few more months (unless a real vaccine is approved, then BOOM up we go)

 

I’m not so sure most of us realize what China has planned.  They are not acting like a country that is very caring of what they have unleashed on the world.  Slapping Tariffs on Australia yesterday will not ease the tensions between China and the West either.  I’m telling my friends to be alert for anything, and I mean ANYTHING!!!!  I’m not trying to scare you and I’m not telling you to sell everything and run to the hills.  I’m just saying our Economy has been severely damaged by China.  If China pulls anymore shenanigans or we can’t get our Economy back up and running this market will blow through that lower range in one day.  We are living in very very interesting times and whatever the plan is, I’m thinking we are only just getting started. 

 

I have zero Longs, zero Swings, but I am still Day Trading 2- 3 days a week.  Today I shorted MRNA after they announced an offering or a dilution of their stock to pick up some cash.  Classic move and I was all over it.  I also played WDAY up for a nice gain.  

 

I’m going to sign off with this simple advice.  Watch the news.  Watch to see what China says and DOES, watch the reopening of our Economy ( in most states,  some states have other agendas),  watch for a Vaccine that works, and keep an eye on my trading range lines.  If I see anything super crazy I’ll give you my 2 cents worth.  Keep your eye on the ball people.  

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The Market has decided to run a bit today, lets see if it will hold its gains.  Currently, 10:30 am et, the S&P is sitting just below both the 100 and 200 SMA.  Even though the S&P has poked its head above my higher range line, it’s shaky.  We’ll need a few more up days to see if we are truly breaking the range bound trend.  If not then maybe all we are doing is inching the range up a little bit.  Earnings were good this morning and that’s why we are up.  I’ve made two trades today. A quick burst in FB and a 35 min run in SPOT.  

 

One more point that I mentioned last week, Oil is creeping higher on demand.  Some of you who like to play beaten down Oil stocks might want to check them out. I’m staying clear.  My family owns a large position in XOM which I own a portion of.  It’s a hold forever for us, dividend deal.  A few beaten down oil companies are Mro, MPC, Oxy, Apa, Hal, PE.  Do your own DD on any stock I mention.  

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21307EFB-1984-4977-9D51-74F1936B3741.thumb.jpeg.fbb3b9b03c347e01a0a6fe1ddeef6180.jpeg
 
This is today’s action on the S&P 500.  We had a real nice premarket pop and our first few hours were decent but we ran out of gas by noon.  I’m not giving up on the burst up on Monday but today’s action just had no oomph and it did NOT get over that 200 Simple Moving Average. I’m thinking tomorrow we head back down.  ( just for a few days if that). 
 
A couple of things to watch, 
 
1. Watch the VIX, currently around 27.  If that gets down into the high teens or low 20’s that will be a good sign that the Market is ready to roll again
 
2. The 10 year under 1.00 is troubling. It will be hard to get that going up with the Fed throwing money at the CV.  Low interest rates will be with us for a few years minimum. Good time to refinance your house if you can get someone to do it.  
 
3.  Keep watching the News, especially China.  The Rhetoric is getting ugly
 
 
 
 
 
4. Yesterday I stated some states may have an agenda when it comes to opening their economies.  I’m all for being safe, and I believe CV is real, but I stand by my statement that some states may Political when it comes to opening up their economies.  Check out the map below and make your own conclusions. 
 
79D147DD-CB82-49CC-98C5-3323C7195443.jpeg.b04abde925465b504b204740ac98ed8a.jpeg
 
 
 
5.  Oil held its recent gains and reached a 10 week high today as the Draw on oil reserves has increased as economies of the world have reopened.  China is almost back to pre CV buying of oil.  They are back buying  a lot of oil from Canada which is good for them.  
 
Of all the things listed above keep a close eye on China/USA relations.  If China tries to retaliate for our Congratulating Taiwan on their elections, if they try to influence our elections,  or continue to block the information on how the CV started and spread then that is not going to be good for our markets.  
 
 
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On 5/20/2020 at 11:38 AM, Adam Montana said:

Appreciate your posts, Pitcher!

 

:twothumbs: 

 

Appreciate your posts, Adam!

 

:twothumbs:

 

Go Moola Nova!

:pirateship:

 

Thank You to ALL Veteran AND Currently Serving The United States Of America Service Men AND Women THIS Memorial Day Weekend AND ALWAYS!!!

 

:salute::flagsmiley::salute:

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