Somebody was ready to sell... transcript

all right so we're going to go over the trades from today starting the week in the green which is great finished last week Friday with a red day I actually had two red days last week three green days two red days finished the the week in the green certainly but you know I did have two red days so I felt like last week was a little bit slow in fact uh I was taking a little scoreboard um of my rating for each of the days last Monday I rated as a four Tuesday is a two this is on scale of 1 to 10 zero well technically I don't know if it's 1 to 10 or 0 to 10 anyways Wednesday was a two or a three uh tues Thursday was a two Friday was a one Friday the leading gapper was less than 30% that was terrible and Thursday the leading gapper was also only 33% so as we sit right now the leading gainer in the whole Market is dats which is up 50% it just squeezed up here and then rejected pretty hard pretty heavy selling volume here not surprising since that's right underneath the 200 moving average but nonetheless a ection on that today when I sat down and when I pulled up my phone early we did have a couple of gappers that were that were nice in percentage Gap but they were a little too cheap and they were just like trading sideways you know they had popped up and then they were just they weren't moving so there was nothing to trade there one of the things that we've seen quite a bit of is this sort of jack knife whipsaw where something will be in consolidation and then it breaks out and then it flushes right back down or it flushes down and then rips right back up and it almost It Feels Like These are traps bull traps and bear traps um you know that I don't know market makers or big big players out there are somehow kind of instigating and it creates a burst of liquidity all of a sudden a lot of volume comes in Traders get shaken out people buy and sell but it's not easy to trade at all the easier places is at the front side of the move when something is really opening up or you know we have a move up it pulls back goes sideways and then goes for a true second leg higher but I can't remember the last time we really had a stock that went crazy it's been several weeks since before the holidays you know everything we've had since the holidays has been kind of slow you know a little bit this and that but nothing big so today I did get green and I would give today initially when I sat down I was like again it's like a one or a two you know there's nothing these Gap scanners the stocks that are on them just aren't that great you know we yes we have stocks that are gapping up but they're going sideways there's nothing to trade so upon initially looking at the Gap scanner I was like oh we've got a 70% gapper that's good but then once I looked at the chart I was like well there's nothing to trade on it so around 7:30 8 a.m.

I was like yeah today's like a one or a two and that changed pretty quickly um with a couple of different trades so I traded two stocks this morning I traded bets again and I traded EAB so we'll look at bets first since that was my first trade of the day this one uh hit the highay Momo scanner and you know I actually had pulled it up it was it's on my continuation scanner so I took a look at it this morning and I was just glancing through continuation stocks I was like oh yeah there's bets there um so I was like I'll take a look at that so I did look at it this morning and then I you know I sort of I was like well there's nothing to trade there there's no volume anyways right at about 810 it starts squee squeezing up from 450 to 5 550 to 6 or well actually not quite to six had a high of 560 in any case it made a pretty big move and I jumped in this on a micro pullback uh I'll actually show you on a 10-second chart where I got in this one made about 900 and then gave back 200 off the top up $757 on it so you'll see this yellow arrow right here uh this was my entry right there so that's where I bought so basically it Springs up pops up quickly and it goes sideways and I bought that micro pullback all right so that's fine micro pullback I'm in right there it goes up to a high of 45 I booked $1,000 of profit basically in that candle uh it drops back down and then it makes its way back up as you could see here it comes all the way back up to a high of 560 but topping tail couldn't hold that level so you know unfortunately top tales on this too it was like hitting 545 548 on the ask but then it was like 530 on the bid so a little bit of a spread not easy to trade ended up retracing not shocked I didn't go big on it I was just I didn't think it was I wasn't sure I was really going to hold up too well anyways so that was my first trade so broke the ice put myself in the green on bets which is great okay so $757 but of course if you recall I was readed on Friday so you know digging myself out of the hole a little bit so then I'm sitting here and we had laes by the way that that hit the scans it popped up earlier really choppy you know it kind of popped up sold off came back up it's sort of grinding higher but you know it it is holding up relatively well all things considered the longer it holds up going into the close in the rest of the day maybe we see a move higher the way we did on Friday on auvi but um rvsn this was the one that was up 70% pre-market sort of had this ascending support level right in here but uh it broke it broke down and it sold hard right through here pops up to vwap Fades up to vwap and Fades again so this just was not strong at all it was very weak a lot more opportunity to the sell side than to the long side so so that was rvsn no trades on that and then elab elab comes up and I had to make a decision on this pretty quickly do I trade it in the small account or the big account I've still got my small account challenge going and when it first popped up I saw it at about 250 as I hit my scans right around here and I was like well all right uh you know it's below $5 so I don't have leverage in the small account but it's pretty cheap I I could buy it so I sort of debated that while I'm debating that it goes to 280 290 to three and now I'm like well now it's getting a little on now on the one hand it's definitely moving so it's like I it's the type I want to trade in the small account but now I've also missed a good entry and so now I'm switching over to my big account and I'm like uh where do I where do I break the ice on this thing and anyways um I ended up taking a trade on this one I'll pull this up on a 10-second chart as well started watching the level two started getting dialed in and we had a micro pullback that I bought and I got some profit on that so I'll show you that trade all right so that was this yellow arrow right here micro pullback so you can see how this is a this is a proper micro pullback squeezes up pulls back for a minute under 350 got long for the break of 350 it goes up to 399 396 pulls back goes up over four to 410 pulls back goes up to 427 not bad couple topping tails up here having a hard time holding this level and this is relevant because if we looked at the daily chart what you would see was that blue sky on this stock meaning all-time highs is right up here um at about 424 high this candle 424 so we had some resistance up there but man look at this candle today a huge red candle so you know I don't really know what to think it this looked like a nice ABCD pattern I took a trade right in there I lost on it was a little annoyed about that because it was like this is a this is a good pattern I the only thing I would say is maybe the nine moving average was still a little bit too far away but it wasn't bad and then this nasty rejection right here so if we look at that on the one minute chart you'll see it drop below vwap which is bearish not great um comes back up makes a new high and then dumps from here goes to 38 and then drops all the way down to 350 so like an 80 C drop in 3 minutes and it happened I mean it was fast and then that was it it was over you know at that point it was like this candle sort of ruined it uh unfortunately and you know so I didn't take any more trades on it tried to come up a little bit wasn't confident didn't think it would be able to reclaim the high of that candle and then it sort of broke vwb and began this really steady strong selloff here's one thing that was interesting about this when the move began pre-market uh one of the things that made me cautious about it was that that immediately there were big sell orders out um immediately literally so like 20,000 shares at 50 20,000 shares at 75 20,000 shares at 3 20,000 shares at 350 20,000 shares at 380 20,000 shares at 4 50,000 shares at 425 and and I was like thinking to myself I'm like who you know for what it's worth if I put an order out right now you know if I put an order on a stock like you know La whatever so so number one if I put an order out on this uh I'll just do like 150 shares just to show you um that order is going to be canceled by the end of the day unless I set it as good till cancel okay so if I set it as a good till cancel order right down there that order is only going to work during regular trading hours from 9:30 until 4 p.m. so this is super obnoxious but what it means is that the stock could rip or could could go well below my buy order and my order will not fill because these orders are not premarket or after hours yet somebody before the news came out or basically I don't know because I wasn't watching it before the news came out someone already had hundreds of thousands of shares of sell orders already lined up and I thought that that seemed quite suspicious and I was curious where those are coming from you know uh maybe a regulator will look at that and wonder the same thing maybe not I don't know but someone was just selling selling selling selling into this move so yeah we but even in spite of that it kept going higher which I was also like all right I mean it's going higher this is I guess it's going higher but it gave me a little bit of pause as I was first looking to get in and you know but then the thing is these cells were just coming back and it's like they were just holding it down so who's I don't know who's selling somebody's selling someone's selling a lot of shares maybe we'll see later today or tomorrow um you know who knows maybe we'll see that there was a um an offering you know priced right at the market and the company sold shares into this move maybe we'll and if they had a shelf registration and that's perfectly um you know within the um you know within the rules to do that because if the Shelf well we can go ahead and check um so so let's see elab it's a new it's see the thing is it's a this is a new company because it's an IPO amended yeah this is going to be a little confusing so it's going to be a little different because it's you know a company that's been around for a long time um these type of companies will often have a shelf registration right okay um recent sales of unregistered Securities so I'm not going to go through this whole thing right now but we'll keep an eye on the headlines on this uh in the coming days to see if there's um see if we get any news that sort of confirms my suspicion about this stock but no doubt there was a lot selling pressure I mean that's the that's the only way you have a stock that gaps up 120% but then it's the selling imbalance there's more sellers than there are buyers now this could be hot Market Cold Market stuff you know in a hot Market we might see you know this kind of move and it just go bananas up to 15 or $20 a share and maybe right now buyers are just a little bit more cautious and conservative but I don't think that explains it entirely I think they're uh some stocks just have that strong imbalance to the sell side because there's either Insider selling or the company's selling or somebody is selling selling selling now some of these companies get um you know really bent out of shape about um so see look at this this is this is going to be red on the day at this rate there's a 30,000 share seller up there so it's only up 1% now it's retracing the entire move uh so some of these companies get really Ben shape about um n what they think is illegal naked Short Selling we know from the Wall Street um what what was the name of the documentary about GameStop I can't remember but um you know the confession from one of these guys on the inside that they were doing naked Short Selling every day of the week for years and years and years that's what they do like yeah of course it happens this is he's like this is literally what we do we have a button to override so it just give people the shares to borrow we'll figure it out later and you know it's in the interest of making money making money so that um the fact is if you give someone the ability to sell let's say you know 500,000 shares and they're able to just keep putting the sell order sell order sell order sell or sell sell out there what's crazy about this at least you know to me is the fact that they're rather than actually getting shares and borrowing them from someone who owns them they're just like almost printing sell button sell sell orders they're just like yeah oh you want to just press the sell button 100 times for 50,000 shares no problem and you could just bury a stock like that by just continuing to sell sell sell sell sell now the thing is you would figure well okay what happens when you have to buy buy buy buy buy right are you going to jam it right back up well you know with this in the in the case of this stock this now has at this point in the day 42 million shares of volume so it continues to grind right it's continuing to generate volume people are actively trading it I don't know why I'm not touching it but people are um I've seen some people in chat saying they're just trading it scalping it you know with thinker swim for two cents here two cents there and 10,000 shares so people are actively trading it so now there's liquidity so with this liquidity you know I guess they might be able to start to unwind some of that position in the same day even which is kind of wild if they were really short um you know the alternative is that they really think the stock is going to go bankrupt and they are never going to have to cover which this is kind of where it seems like it's sort of cheating the system but if you are allowed to borrow an infinite number of shares and you can Hammer a stock down lower and lower and lower and lower and it goes bankrupt then you know yeah wouldn't you just sort of never have to cover like I don't know it just seems uh it's it's not fair it's not right but we know what happens and so you know in this one you could say oh why didn't you join the um join the winning team and just trade to the short side well of course you know there's a number of reasons for that um ZJ Y what was it um ZJ yl was probably the biggest wakeup call uh to short sellers to have a stock that halted up at $25 a share then resumed to 500 you could lose your house on a trade like that I never ever ever want to empower one trade to ruin my career unfortunately that can happen when you're trading to the short side because of even this is a Black Swan anomaly event it's an anomaly that could have taken millions of dollars away from you if you were short 10,000 shares you know or any reasonable position which I pretty much am always in it'd be devastating so that's number one that and this is just sort of the latest I haven't been shorting for a long time and it's not because this you know this wasn't the reason until I just saw it happen with my own eyes and I was like whoa I I just watched people lose millions of dollars as that opened at 500 so that was not that's that's one thing that's just most recent um as you know I trade in retire account which means these gains right here $3,400 no tax that is taxfree uh the retirement account that I use I've had retirement accounts um at interactive brokers think or Swim and light speed these three Brokers all offer what's called settlement margin it's you don't get any leverage with a retirement account and the reason you don't get Leverage is because you are prohibited from contributing more than the limit to your retirement account each year so if you got a margin call to meet the margin call you would have to contribute more money which would nullify the structure of that retirement account so to make it so you could never ever get a margin call in retirement account they do not let you use leverage and they do not let you short stocks and they don't let let you write naked options uh which is good um it has to be like cash secured um all cash secured or spreads so in a retirement account I simply cannot trade to the short side now I could buy puts um if I really want you know want to trade something to the short side I suppose but that wouldn't be an option for most of the small caps anyways um so so I so of course I don't do that so so that's the second reason that I'm not shorting uh now in the small account it's not tax-free account so in the small account if I wanted to short I could short but I would remain with the issue that unlimited loss big risk and then uh number two is both the availability of shares to borrow and the cost to borrow shares because essentially especially with a small account I'm already paying a lot in fees and those fees go even higher once you have to pay additional fees to reserve shares for every trade you take so you know uh right now we're definitely in a market where there's been some great reward trading to the short side and you know it's it's tempting and right before I saw ZJ yl I was like you know I don't know maybe I should just take some trace a short side and just you know just you know why fight it right um and but that's kind of the thing is I'm a I'm a late adopt I'm like a late adopter of things so by the time I'm adopting something it is like it's it's probably like the trend's almost over um so I you know I I I'm just like by the time I'm going to short like the next day you're going to have a stock that blows up every short seller when when your grandparents are shorting stocks you know and I that's when I'm joining them too that's when it's time to stop shorting stocks so I think that I'm just a little late on it look if I didn't short stocks during the entire bare Market of 2022 or 2023 why would I start now right when the Market's getting ready to well you know it's kind of right at the all-time highs so anyways it's fine I think most Traders do view the market um with a bias either to the long side or the short side I certainly have a long bias and you know I make good money with that so I don't know I don't need to fix what's not broken but uh no doubt elab was a big fade today um so some kind of kind of weird stuff there probably never really know exactly who those sellers were but um yeah kind of funny and yeah dats it's up 82% so that right now is our leading Gainer the thing is I looked at it earlier um it's on short sale restriction but I just kept seeing that 200 moving average and I was like well it needs to get over that so listen the 200 is at 22 approximately 422 if we could get over that and hold over that then you know maybe you do have more room it's got a pretty low float it's obviously moving it's holding up so that's that's what you need to see in order for things to get interesting going into the afternoon but I also don't feel the need to overstay my welcome Hey look $3,400 is that enough is that a good day I'd say it's a pretty great day so that's where I'm going to finish today and um I'll have a new episode of uh for of the small account challenge series coming soon so you guys will um be able to tune in for that thank you for those of you guys who have already watched those episodes who have hit the thumbs up who are helping me unlock my new piece of inventory cuz this monitor that I've been using here is just I'm so ready to to not be using it as my main trading screen when I sat down this morning I was like ah not again so I'm really looking forward to that so thank you guys for tuning in and I'll remind you as always that trading is risky my results are not typical and there's no guarantee you'll find success whether you trade on your own or you learn from me so really take it slow the market will be here for you all right I'll see you back at it first thing tomorrow morning