There are TOO MANY strong stocks! transcript

all right everyone so we're going to go over the market from today I'm going to recap the trades that I took overall not a bad day but you know what was interesting is today at one point I had four stocks on my level two that I was watching and all four of them were halted at the same time what that said to me was number one we do have some volatility today but number two and this is a bit of a problem attention is dispersed when you have aention dispersed across six seven 8 nine 10 different stocks it reduces the amount of volume they each have when compared to a day when everyone is focusing on one stock when everyone's focusing on one stock all that volume you know sort of comes together and one stock has crazy high relative volume and that's usually when we see some really explosive moves now sometimes we'll have a stock that's uh fairly obvious and has a lot of volume but it's thickly traded and I think we did have that issue a little bit today on mlec this was our leading gapper going into the open uh it it it's up 75% right now although you could see at the open it it has started to pull back a bit um it's got a 37 million share float it does have news um USDA approval plant grown animal proteins gross um 57 million shares of volume here so I mean it yes it's something people are focusing on but it's super super thickly traded and that's partly because the float is higher there's a lot there's a much higher level of supply and that's sort of diffusing the demand so the volatility is not as big on this one as it is for instance on edbl edbl look the the volume the float is 300,000 shares it's got 1.8 million shares of volume so when we're thinking about that relationship between supply and demand float is is a very important component so let me grab the Whiteboard here and I'm just going to kind of um illustrate this uh hopefully in more detail to help you guys uh really get your head around it so when we have a stock like Ed edbl the float is let's just Round Up 300,000 shares that's ridiculously low and that's in part because it's done a lot of reverse splits the volume today is nearly 2 million shares so 2 million shares so this right here represents Supply and this represents demand so there's no doubt in this relationship right here you've got I mean almost 10 times more demand then you have Supply 300,000 shares of Supply 2 million shares of demand and what does that result in Stock's up 50% and it's up 50% even on relatively light volume it's moving quickly so it's up 50 % on 2 million shares of volume if it had 4 million shares of volume I would wager it would be up you know closer to 100% if I had 8 million shares of volume we'd probably be up closer to 200% we would see that exponentially the price would go up as demand increases because Supply is fixed in this equation Supply doesn't change so what we're really looking at is Supply um and demand and then how that leads to percentage change on the day the relationship of supply and demand and the current ratios that we have so then when we look U just for comparison at um what was it ml mlec so mlc this one has uh right [Music] now 57 million shares of volume so the volume which is the supply sorry which is the demand um is 57 million and the float or the supply is 37 million so the ratio here is that it's like 50% higher right yes there is more demand but it's not even double the supply level so this ratio is not as you know you could actually do the math but this isn't a huge imbalance and it impressive that it's up 75% despite that imbalance now if we saw this volume let's just say for instance we saw 200 million shares of volume then we would be looking at a bigger a bigger percentage gain there there's no doubt about it but as the day is going to go on while volume will increase um unfortunately we're at a point now where we're going to need I I would say realistically you need a float rotation of at least 10 to have usually what we would say would be pretty good moves and well sustained moves this isn't even a float rotation of two yet it's just very low and we're not going to we probably won't hit 10 today so whereas on edbl you know we're already at you know close to eight and we'll come up to 10 even just during this um now let's see edbl is oh well it's halted right now so um the volume's unchanged but but we'll check it as as we continue so so edbl um it let's see we'll pull this one up here just for a second so this one uh right now is up uh 50% on the day uh it does have a little bit of an issue on the daily chart which is that it put in a big move a few days ago and sold off and it put in a big move back here and then sold off so to be honest I think I think it definitely has resistance up here um this one doesn't have a standalone Catalyst to really support the move today it kind of surprises me that it's moving up as much as it is but you know whatever so definitely resistance at 1241 I would be shocked if it goes up another 100% and makes it to there uh it squeezed up to 650 and is now halted coming back down and this is going to be a problem when you don't have a really strong Catalyst that's not going to bring buyers you know you need a strong Catalyst to bring buyers in because ultimately you know of all this volume right here you're going to have people that are shorting into this move and are selling and unloading and bag holders perhaps from over here who are getting out because they realize this doesn't have news it's got nearby resistance it's just what are my expectations on it so I didn't take any trades on edbl today I saw it as it was going into this halt at 424 but I was too slow to jump in it resumed it dipped I had my order ready to add and honestly the volume was kind of like anemic at that point I was expecting so much more volume and I was just like huh I don't know I guess I'm just going to leave that alone it's I don't know where the volume is so it it did go higher but n not that exciting two halts in a row it dips down then it pushes to a third halt pushes higher and then it halted down right here um trsg this is another one that I was watching but did not trade halted up is a recent IPO this one uh some Traders were talking about on Friday but you know to be honest not super clean chart we'll full screen this so you can see it better so this thing halts one two 3 four times and then at one point when it was halted down it was showing a resumption of like I don't know 50 cents or something resumption came up it opened here halted up was showing a resumption of like you know way way high then it opened and sold off and halted down so weird resumption prices anyways ends up dropping to five ralli pre-market at 400 a.m. exactly pops right here the 4 a.m. kind of algo Spike these are funny I don't really know what to think of these a lot but they do happen anyways so squeezes up but does a round trip comes all the way back down goes sideways pulls back and then at the open boom halts up I didn't see this actually no I pulled it up just as it was halting but it was it was too late to take a trade so I was just like H that's interesting but whatever it opens it surges higher and then it reverses and I was watching on the resumption but look at this high volume red candle just a lot of selling was not clean U did not see a good opportunity so there was no trade on that um now I'll show you my first trade of the day my first trade of the day was on nif nif so this one it comes that with news and it's a non-binding um term sheet for reverse merger and initially I'm like I don't really care like this is a cheaper stock I don't really like it but man this thing pushes to A110 $120 13040 so finally I say you know what micro pullback right here I got in at a142 uh it hits a high of a146 and then flushes down I stopped out with a $300 loss First Trade it's like golly that's annoying um I then tried to buy um like right around here on this the bottom of this candle um for a dip and it went lower lost another 500 on 5,000 shares 5,000 shares Max position but took the full 5,000 on these two trades because it's a cheaper stock then uh it comes back up I got back in got a little scalp here uh but I I'm I'm red on it red $917 so uh took a loss on ni VF and then after that smfl was on my scans so smfl uh I saw moving up the Gap scan and the top gainers scanner so the top Gainer scanner um right here I'll see a stock like this moving up that scan and so I saw oh it's moving up the scan smfl and that was when it was up maybe just like 8% on the day so as it that was right in this candle here as it popped up so it pops up right here and I checked the news at 9:00 a.m. and there was news of a reverse split 7 to1 reverse split so I'm like okay it's a recent reverse split you know not by itself always the best Catalyst but usually we do well trading stocks that are recent reverse splits so I was like that's interesting um it curls back up here and as it curls back up I got in and this candle goes from $4 all the way to a high of $540 $140 share that's not bad my starter position 2500 shares standard nothing crazy added as it moved higher so I had 5,000 shares and was able to lock up $4,4953 almost a dollar a share that's pretty good so that was a solid trade uh but it was a little disappointing that it did sort of this drop back down now in this area I was starting to think about buying dips and it's been holding up relatively well but then we got into this issue where edbl was halted and T trsg was halted and nif was halted and I was like all right now I'm worried about tension being dispersed I'm not sure what's obvious but it's great to see that it's rallying back up it's above my entries so you know we're moving in the right direction volume is increasing this might have more more in it um it's got a daily chart that is a turnaround story it's been beating up for a long time so recent reverse first split and then turning around I would love to see it move higher but I also was reminding myself today not to force it you know if it's not going to happen it's not going to happen um and I was feeling a little cautious because I didn't take my first trade until like 9:00 a.m. so sort of a slow start to the day edbl has halted again now edbl has 2.6 million shares of volume it's up 78% so volume is increasing smfl has um about about 5 million shares of volume right now that one's up uh 40% I wish it had um a stronger Catalyst other than just the reverse split but um anyways this is sometimes the case so yeah I just I started to feel like as we were getting further into the open it wasn't clear to me which stock was obvious and sometimes when that happens and you still have a couple other stocks are still getting a lot of attention you don't get clean resolution you'll get like a little sort of pop and then a flush there's just not enough people watching so for that reason I think the safe move is to step back and and slow down a little bit and you know perhaps if you're interested wait until something really starts to pull away and then you know buy dips as it moves higher but I just don't want to catch um a loss and it's the beginning of the week so I want to start the week you know with a nice Green Day so up 3,500 $778 on the day not bad really only took a couple trades commissions are going to be low today so you know that's always nice um and you know even though my daily goal is 5,000 I'm a little short on that I did go red 1100 today before I got myself into the green so now I kind of feel like hey you got yourself in the green that's certainly better than a red day you know don't don't push your don't push your luck don't overstay your welcome so that's where we're at right now really trying to focus on being super disciplined and uh I'm really trying to focus on being super consistent so those are my goals for the month of April we're kind of finishing it up here we've got let's see what day is what's the last day of the month uh we've got this week and then Monday and Tuesday so May 1 is on a week from Wednesday wow all right so we're cruising here so May 1st a week from Wednesday um and now look smfl is on the halt level down so you know this is where you know it could be easy you overstay your welcome and next thing you know you're in one halt down this one's a halt up but it also halted down just a few minutes ago right right here so all right hold on to your hats manage your risk as always my results aren't typical so I'd encourage you to practice this simulator before you put real money on the line and um I hope you hit the Thumbs Up And subscribe to this channel if you enjoy episodes like this all right thanks guys for tuning in and I'll see you back at it tomorrow