a 780% Short Squeeze at 8am! transcript

What's up, everyone? All right. Well, the moral of the story is when you wear green, good things happen. I've got my green shirt on, and I'm sitting up $18,63021. This morning, we had a stock that went up $780. Yeah, that's right. Yesterday, it was at about 30 a share Friday. Today, it hit a high of about $2.65. That's an incredible move. Now, as you might imagine, I don't like trading these lowerpric stocks. And so, even though this stock went up 780%, it's the stock today that I made the least amount of money on.

But, it was a signal that momentum was back. In fact, going up 700% on 200 million shares of volume before 9:00 a.m., that's a huge move. And so, we had a number of other stocks that also made big moves today. A challenge this morning was trading stocks with no news versus trading a stock with news. The no news stocks actually did better than the stocks with a clear catalyst. And here's why. When there's no catalyst, people are speculating on what it could be.

We're in a market right now where, you know, there's been a lot of I I guess just call it flatout insider trading where we're finding that people took big positions just before a news catalyst comes out and eventually those people are going to get in trouble for that. But in the short term, what market participants are realizing is when there's a sudden surge of momentum, maybe somebody knows something. And so we can only speculate what that might be.

Now in some cases that initial surge of momentum is maybe I don't know it's nothing and the stock will never have news. It was all just a illusion. But in other cases the stocks sure enough post a headline a few hours or a day after that initial spike which feels frustrating and it feels unfair to the little retail traders like us who are just kind of trying to make a little profit here and there and we don't have that inside.

Well, it's illegal to do insider trading, but we don't have that advantage that of course all these big money investors or whoever they are, politicians, I don't know, seem to have people that are on the inside. Unfortunately, we're in a I I would say a a bit of a political environment where I think a lot of people feel that they can just get away with this stuff and it, you know, it is what it is, but it we see it trickle down into the market. we see the actual impact in the market when we see a stock squeezing up with no news and we're thinking what is going on here.

So when the stocks are moving with no news in this current environment people are thinking what does somebody else know? They shouldn't know it but they know it. They're acting on it. So am I just going to piggyback on this momentum? And so in some cases we're piggybacking on momentum and as it turns out there was nothing there in the first place. And in other cases, we're finding later that the news comes out after everyone's already traded it, which is very it's it's unusual grand scheme of things, but in its current market, it seems more and more common.

So, on the other hand, you have a stock with news that pops up. Now, you're you're trying to quantify how good is this headline. So, we had a stock this morning that popped up with news and it started squeezing and I said, you know, guys, I'm a little concerned about this one because it's moving up really quickly, but I wonder if it's moving up so quickly because the overall market's hot and not because the news is actually that good.

Because the issue here is that when people actually dig into the headline and realize that the news isn't that substantial, there's no speculation that someone knows something. That's the headline. It's not actually that big of a deal. We just had an overreaction of buyers because of FOMO. People didn't want to miss the next big move, but that's going to come right back down. So, case in point, here's the example today of that exact thing.

LABT. And this is my P&L. You could see. So, I'm at $5,500 on LABT. This is the stock that popped up with news and it came all the way back down. It, you know, this thing was up uh over 100% and now is flat on the day. So, a full round trip. So, we'll just do from yesterday, 167%. And now it's all the way back down. So, on this one, and we'll just break this one down first since it's top of mind. On this one, it initially pops up, as you could see, right down here up to about 220.

It pulls back, and then it rallies up to 250. Because we had already seen such big moves in the market, I thought, all right, well, maybe I should go ahead and break the ice on this one. And so, I did. And I broke the ice using the 10-second micro pullback. So rather than even waiting for a proper one minute pullback, I was using the 10-second pullbacks in areas like right here and right here. And then again, you'll see another one right here.

And then we had this one right here, which actually turned into a proper one minute pullback. And I didn't take this one. I wish I had, but I didn't. Then it squeezes all the way up to four. And we had resistance and heavy selling at $4 at the whole dollar. It sells off down here. It bounces off of 350. My last trade on it was a dip at 350 for a bounce back up and it broke back below 350. I got out very quickly. It ends up selling off and coming all the way back down.

A reminder not to overtrade the backside of the move when it's selling off. Now, right here, this was a dip and I was hoping it would rally back up, but a little bit risky because it obviously had a heavy seller up at four and then starts to roll over. This was the area to be aggressive the front side of the move on these pullbacks. But eventually the news mattered. So what was the news? All right. So we have uh this headline here um bio it's a biotech company announces positive data for the advancement of lead candidate NU3 in infected diabetic foot ulcers.

Okay. So so that's our headline. So on the surface you know you read through this and you're like okay I mean I'm not you know again I'm a trader. I focus on trading price action reading level two. I'm not an expert in all this stuff. So, it's very hard for me to interpret and put this into context of how good or bad this is. So, I just trade the price action. But, I knew that there was a risk that this was going to get a bit overbought because of the euphoria and excitement of the market today.

One thing that I noticed here was a divergence. The divergence, can you spot it on this candle right here? highest volume of the day and the candle was smaller than these previous big candles. These were big candles rallying up and then all of a sudden highest volume and it hits its head at four and can't push higher. So this is a micro pullback. The first leg went up by four candles. Micro pullback goes up one candle and then it stalls out and rolls over.

So that's not good. So this is the one with news. Didn't end up working out well. SBFM, no news. There's no news on it. Canadian company, so all the executives wear denim, right? Canadian tuxedo. And the stock goes up 780%. They're saving a lot of money, not having to buy fancy suits. No New York City firms here. And you know, in spite of no news, you get this big rally. So you get the big pop at 4 a.m. Then it pulls back.

And when you have a big pop like that, especially with this topping tail, it inherently is bearish. It tells us that yes, the stock popped up, but no, it wasn't able to hold up. So, is it going to be something that's worth considering? Usually, I'm not that interested when you see those big topping tails. But in this case, it does rally back up, pulls back, then it comes back up again, dips down, and then we start to pull away.

So, I'll just move this over. So, we get this little dip right here, and then dip, dip, and then surge, topping tails. This was a grinder. It was definitely a stock that was grinding higher. It was not super clean. My first trade on it, my first entry was at a $1.98. So, you know, I took this little trade right down. Was it right right in here? No, it was um it was right here. It was on this pullback right here for the break over two.

That was my first trade on it right there for the break over two. And then I took another trade a little bit later um right in this area. I was anticipating a a possible curl back up to the high, but that didn't work out very well. In any case, broke the ice up $2,600 on SBFM. So, that was my first trade of the day. And I mean, this thing was like cranking. The volume, you know, as of right now, let's see, the volume is $234 million shares.

It's got a ton of volume. Very liquid. Could buy and sell if you wanted to. 100,000 share positions. I mean, you could get in and out with huge size. I I didn't go that big, but you could have if you wanted to. And so, got a little icebreaker on that. So, as this started to pull back, the second leading gainer was GovX. And I thought to myself, I'm pretty sure attention's going to shift. If GovX hits a new high of day right here, people are going to abandon SBFM.

Well, they already are because it was rolling over, and they're going to switch to the second leading gainer, which just so happens to also be a biotech company. A biotech company with no news. Very similar. Stock was already up a ton. So, I I switched to the second leading gainer and I jumped in at $3. Boom. I punched it at three. I added 325, 335, 350. It goes up to four. It goes up to 450. It hits a high of $5. $4.99 to be exact.

But again, this is an example of that big topping tail. So, we hit that high and then we come right back down from five all the way back down to three, then bouncing back up to 350 and then kind of fading and still hanging out around three, but not not holding up really well. So, on the one hand, shorts got squeezed out. Uh, but on the other hand, they clearly added back or there were people that were selling because this did not hold the move or maybe the company was selling.

That's always a variable. You know, some of these companies will take the opportunity. Hey, stocks up 150% on no news. We're going to sell some shares on the open market. We're going to raise some money. So, that's always a risk with these. Here's the good news. We had some really great momentum this morning. What does that mean for the opening bell? Because it's not even the opening bell. Here's my approach. If you recall last Monday, I sat down, made about $20,000, and then I gave back 90% of it.

And I was pretty devastated. I want to start this week off on the right foot. So, I want to take this $18,000 and bank it. I want to keep it and I want to roll that momentum in to tomorrow. I want to have another good day tomorrow during the 2, three hour window from 7 a.m. to 9:30 or so where I usually do the best. Take that profit, do it again on Wednesday, do it again Thursday, do it again Friday. I don't want to overstay my welcome trading the backside of these moves.

And I don't want to overstay my welcome trading later into the trading session when we're going to have to start dealing with stop orders, market orders, and circuit breaker halts. All of that creates a level of volatility where I find it more difficult to manage risk. So, I'm going to focus on just trading during this window when I do the best, extract as much profit as I can, but then take my foot off the gas, walk away, and come back.

That requires a high level of discipline, but I'm going to work to exercise it this week. So, whatever happens for the rest of the day, I won't know about it till I sit down tomorrow morning. I'm not going to be staring at charts on my phone. I'm not going to be glued to the, you know, to the price action. I'm just going to let it be what it is. I had a good day here. It's a great start to the week. It adds nice profit to um to the month, I guess.

I Let's see. I was up, we were looking at the um the P&L on the month uh in the recap on or the game plan episode yesterday. I think I was at like $62,000 on the month. Um so if that's correct, then that's going to put me up to close to $80,000 on the month after today's gain. So let's just check the the month of May. So this will be the second, no, third biggest green day of the month. Um so here we go. So, it was at 64,000 on the month.

So, it'll be at uh 82,000 on the month after today's gains. So, biggest green day was 46,000. That was the second biggest green day at 17. So, today uh today's actually the second biggest green day. So, this got moved to third place. This would have been my second biggest green day, but I screwed up, overstayed my welcome, and gave back 90% of my profit and went from 20 grand to well, whatever, $2,800. So, then I had two no trade days in a row. than a red day.

So last week I wasn't feeling that great. I finished the week, you know, at 3,000 versus my Monday high of 20 grand. So what if that happens again this week? I've got the 18,000 today and then there's nothing tomorrow, nothing the day after, and then red on Thursday, I'll be really glad I took the profit. On the other hand, if tomorrow's another solid green day, another even bigger green day, then this week could be the best week of the whole month.

It's out of my control what happens. I just got to show up every day. But managing my risk and being disciplined about keeping the profit is important. So for those of you guys tuning in perhaps for the first time, I hope you hit the thumbs up. I hope you're subscribed to the channel. And I will put the link for a twoe trial at Warrior Trading in the description and pin it to the top comment. During that twoe trial, you can watch over my shoulder while I'm trading.

And you'll have access to this software right here, Day Trade Dash. Not on my screen share. You'll actually have it in your own browser. So you can move your charts around, you can move your scanners around, organize it the way you like, and get a sense of essentially what it's like to use the same tools that I use and what it's like to listen to me while I'm trading each morning. So, as a reminder, trading is risky, and my results aren't typical.

So, always make sure you're practicing in a simulator before putting real money on the line. I'll see you guys back at it first thing tomorrow morning.