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Summary

In this weekly trading video, the host reviews past stock picks, emphasizing their performance and the importance of timely action. They discuss the market's potential inflection point, advising day trading due to technical confirmation needed for long-term trades. The video includes analysis of specific stocks like ULA, COST, and RTX, highlighting their recent price movements and future trading opportunities. The host also addresses the impact of mega-cap tech earnings and economic indicators on market trends, suggesting a cautious approach in the coming weeks.

Takeaways

• 📅 The video is a weekly update for traders, discussing past stock picks and market analysis.
• 📉 The speaker emphasizes the importance of reviewing past picks and not just presenting new ones.
• 🚀 The speaker has been encouraging day trading due to an anticipated market inflection point, avoiding long-term swing trades until technical confirmation.
• 📊 The video includes a systematic trading approach and a review of the speaker's past content since the 2008 financial crisis to demonstrate the validity of their teachings.
• 👍 The speaker asks for engagement in the form of likes and subscriptions to help reach a larger audience.
• 📉 There is a focus on short-term trading opportunities, with specific stock picks like ULA and CCO being discussed as potential shorts.
• 📈 The speaker also mentions long positions, with examples like RTX and HWM, highlighting their relative strength during market sell-offs.
• 📊 Technical analysis plays a significant role, with discussions on support and resistance levels, trend lines, and indicators like the RSI.
• 📈 Mega-cap tech stocks are a significant driver of market movement, and their recent earnings reports have had mostly negative impacts.
• 🔍 Economic indicators such as ISM Manufacturing, ADP, and the jobs report show weaker-than-expected results, raising recession concerns.
• 📉 The speaker anticipates a market decline, with a bounce expected after testing the 50-day moving average, and advises caution in a news vacuum period.

Q & A

What is the main difference between the speaker's approach and that of Internet gurus when giving stock picks?

The speaker emphasizes accountability and follow-through, unlike Internet gurus who may give a pick and then not follow up on its performance. The speaker reviews every single pick made previously and shows how it has performed, offering actual trades rather than just theoretical or photoshopped profits and losses.

How does the speaker's systematic trading approach work?

The speaker's systematic trading approach involves reviewing past picks, conducting market analysis, and then using a systematic method to find new trades. This approach is time-tested and has been applied consistently since the financial crisis in 2008.

Why has the speaker been encouraging day trading in recent weeks?

The speaker has been encouraging day trading because they felt the market was approaching an inflection point and did not want to engage in a lot of swing trading without technical confirmation for longer-term bearish trades.

What is the significance of the speaker's mention of developing a watch list based on their picks?

Developing a watch list based on the speaker's picks allows traders to have a selection of stocks ready for analysis when the market experiences a pullback, enabling them to make informed decisions quickly.

How did the stock 'UAL' perform after the speaker recommended it as a short?

UAL performed well as a short, breaking down below a major horizontal support level and then experiencing a compression followed by a return of sellers, which led to further decline in the stock's price.

What is the speaker's current stance on the stock 'COST' (Costco)?

The speaker still likes COST as a short, expecting it to have another leg lower, potentially down to the 100-day moving average. However, they acknowledge that COST is a consumer defensive stock and may hold up relatively well after a market decline.

What was the speaker's strategy regarding 'RTX' when they recommended it as a long?

The speaker recommended RTX as a long to take advantage of the intraday volatility in the market. The strategy was to have both longs and shorts in the portfolio to capitalize on market fluctuations.

How did the speaker trade 'MCD' during the live event, and what was the outcome?

The speaker traded MCD during the live event by shorting it after a significant decline. They exited the August puts at about $370 after the stock continued to move lower and closed on its low, resulting in a profitable trade.

What indicators does the speaker use to evaluate potential entry points for a short position in a stock?

The speaker uses indicators such as the long-term trend line, the 200-day moving average, and the LSI (LRSI) indicator on a 30-minute or H1 basis to evaluate potential entry points for a short position.

How did the earnings reports of mega-cap tech stocks impact the market?

The earnings reports of mega-cap tech stocks, which were mostly negative, led to a sell-off and contributed to the market's decline. This also allowed short sellers to become more aggressive.

What economic indicators have recently shown signs of weakness, suggesting potential economic slowdown?

Indicators such as the ISM Manufacturing index, ADP job numbers, and the jobs report have shown weakness, with numbers coming in lower than expected, suggesting a potential slowdown in economic growth.

What is the speaker's view on the market's reaction to the Federal Reserve's statement and the upcoming period of recess?

The speaker believes the market is nervous due to the lack of new information from the Federal Reserve and the upcoming period of recess, which may contribute to increased market volatility and uncertainty.

How does the speaker describe the impact of the upcoming news vacuum on the market?

The speaker suggests that the market will be influenced by the results of the week's events for the next five to six weeks due to the lack of significant news, creating a news vacuum that may exacerbate market trends.

Outlines

00:00

📈 Weekly Trading Review and Market Analysis

The speaker begins by emphasizing the importance of reviewing past trading picks and their performance, contrasting this approach with the common practice of internet gurus who fail to follow up. They outline their systematic trading method, which includes reviewing past picks, market analysis, and finding new trades. The speaker encourages viewers to subscribe and like their content to improve algorithmic visibility. They discuss the recent market conditions, suggesting a shift towards day trading due to an anticipated market inflection point and the need for technical confirmation before entering into longer-term bearish trades. The speaker also highlights the importance of building a watchlist based on their picks and provides specific examples of past stock picks, such as ULA and CCO, detailing their performance and future outlook.

05:02

📉 Trading Strategies Amid Market Volatility

The speaker discusses their upcoming break and the significance of the instructions provided in the video due to its longevity. They analyze specific stocks like HWM, detailing how it held up until a particular earnings report and the subsequent price action, including opportunities for day trading. The speaker also shares personal trade experiences, such as with MC, explaining their entry and exit strategies based on market movements and technical indicators. They emphasize the importance of recognizing support and resistance levels, using automated trend lines, and setting alerts based on indicators like the RSI for potential trading opportunities. The speaker also discusses the broader market context, including the performance of mega-cap tech stocks post-earnings and the implications for market sentiment.

10:02

📊 Economic Indicators and Market Sentiment

This paragraph delves into recent economic releases and their impact on market sentiment. The speaker mentions weaker-than-expected ISM Manufacturing and ADP job numbers, indicating a slowdown in the economy. They also discuss the jobs report, which showed weaker job growth than anticipated, contributing to recession fears. The speaker notes the initial jobless claims reaching the highest level of the year as a warning sign. They describe the market's reaction to these indicators, including a bounce off the 50-day moving average and subsequent selling pressure following mega-cap tech earnings and the FOMC statement. The speaker also touches on the potential impact of the upcoming election season and the market's aversion to uncertainty.

15:03

🌐 Market Outlook and Seasonal Trends

The speaker concludes with a market outlook, considering the factors discussed in previous paragraphs. They mention the market's wait-and-see mode following a test of the 50-day moving average and the FOMC statement. The speaker predicts potential dip buying and a possible bounce in the market, but also warns of the seasonally bearish period from August through October. They highlight the increased uncertainty due to shifting election polls and the absence of significant news in the coming weeks, which could influence market direction. The speaker also notes the market's sensitivity to news vacuums and the importance of traders being vigilant during this period.

Keywords

💡Systematic Trading Approach

A systematic trading approach refers to a methodical and rule-based strategy used in trading to find new trades. It is often used to minimize the impact of emotions on trading decisions and to ensure consistency. In the video, the speaker mentions using a systematic trading approach to find new trades after reviewing past picks, indicating a structured method for making trading decisions.

💡Inflection Point

An inflection point in trading is a point on a chart where the direction of a trend is expected to change. It is a critical concept for traders as it signals a potential shift from a bullish to a bearish market or vice versa. The speaker mentions that they have been encouraging day trading because they felt the market was approaching an inflection point, suggesting a strategic timing for trades.

💡Horizon Support Level

A horizontal support level is a price level on a stock chart that an asset has had difficulty falling below in the past. It is used by traders to identify potential areas of buying interest or potential reversal points. The script refers to a breakdown below a major horizontal support level, indicating a significant event that could impact trading decisions.

💡Bearish Engulfing Candle

A bearish engulfing candle is a specific candlestick pattern that occurs in a falling market and signals a potential continuation of the downtrend. It is formed when a small bullish candle is followed by a larger bearish candle that engulfs the previous one. In the script, the speaker uses this term to describe a pattern that suggests the next move in a stock will be lower.

💡Flight to Quality

Flight to quality is a phenomenon where investors move their funds from riskier investments to more stable and high-quality assets, typically during times of market uncertainty or decline. The speaker mentions a flight to quality after a market decline, indicating a shift in investor behavior towards safer assets like consumer defensive stocks.

💡Relative Strength

Relative strength, often used in the context of trading, refers to the performance of a stock or asset in comparison to a benchmark or the overall market. A stock showing relative strength may be outperforming the market or a relevant index. The speaker discusses a stock that continued to move higher during a market selloff, highlighting its relative strength.

💡AV WAP (Average Volume Weighted Average Price)

Average Volume Weighted Average Price (AV WAP) is a technical analysis tool that calculates the average price of a security based on both its price and trading volume over a certain period. It is used to identify areas of support and resistance. The script mentions a stock bouncing at the AV WAP, indicating a potential reversal point based on this technical indicator.

💡LSI (Least Squares Indicator)

The Least Squares Indicator is a momentum oscillator that uses linear regression to predict the future direction of a security's price. It is used to identify overbought or oversold conditions. The speaker discusses using LSI to evaluate a stock for a potential entry, specifically looking for a breakdown below 80 as a sell signal.

💡Gap Reversal

A gap reversal is a trading term that occurs when the price of a stock moves in the opposite direction after a gap up or gap down. It is often used to identify potential reversal points in the market. The script mentions a gap reversal in the context of a stock that opened below its average volume, suggesting a potential change in trend.

💡Mega Cap Tech Stocks

Mega cap tech stocks refer to the largest technology companies by market capitalization, often driving significant portions of market movements. The speaker discusses the performance of these stocks after earnings reports, noting their impact on the overall market direction and investor sentiment.

💡News Vacuum

A news vacuum occurs when there is a lack of significant news or events that could influence market sentiment and price movements. The speaker mentions heading into a news vacuum, suggesting that the market's direction will be influenced by the last set of news, which in this case had a negative impact.

Highlights

The speaker emphasizes accountability in providing stock picks and reviewing their performance over time.

A systematic trading approach is used to find new trades, which is time-tested and valid according to the speaker's teaching.

The speaker encourages day trading due to an anticipated market inflection point, avoiding long-term swing trades until technical confirmation.

The importance of developing a watch list based on provided picks to prepare for market pullbacks is highlighted.

A detailed analysis of the stock 'Ula', including a breakdown below a major horizontal support level, is provided.

Costco (CCO) is discussed as a potential short, with the speaker explaining the technical indicators suggesting a further decline.

The speaker shares personal trades, including a profitable short on MC and the use of trend lines for support and resistance levels.

The use of RSI and other indicators for entry and exit points in trading is explained with examples.

The impact of mega-cap tech stock earnings on the market is discussed, noting the negative reactions and potential for increased short selling.

Economic indicators such as ISM Manufacturing and ADP job numbers are mentioned, pointing to a potential economic slowdown.

The speaker predicts a market decline and suggests that the current dip buying may not be sustainable.

The FOMC statement's lack of new information and its potential impact on market uncertainty is discussed.

Seasonal trends indicating a bearish period for the market in August through October are highlighted.

The upcoming news vacuum and its potential to influence market direction for several weeks is noted.

The speaker plans to take time off and emphasizes the importance of the instructions given in the video for the next 10 days.

The potential impact of election uncertainty on market sentiment and trading is discussed.

Transcripts

hello Traders it's Sunday August 4th and

it's time for our weekly video you know

you've got a lot of Internet gurus out

there who give you a pick and then you

don't hear from them you don't know how

the pick did that's how this is

different I don't do that I go through

every single pick that I've made

previously and I show you how it's

performed I give you that pick when you

still have time to act on it I'm not

showing you a photoshopped p&l I'm

giving you an actual trade then once we

review our picks we do our market

analysis and then we use our systematic

trading approach to find new trades

that's how all of this works and you can

go back and watch my videos since the

financial crisis in 2008 and see that

what I'm actually teaching you is valid

it's time tested it works week in and

week out if you like the content that I

produce please give me a thumbs up

subscribe to my YouTube channel all of

this helps the algorithms and it helps

me reach a larger audience because

ultimately that's what I'm trying to do

I'm trying to teach you how to trade so

you know that for the last few weeks

I've been encouraging you to day trade

because I felt that the market was

coming up on an inflection point we

really didn't want to do a lot of Swing

trading we needed technical confirmation

before we could start getting into some

longer term bearish swing trades we'll

get into the market analysis in just a

little bit but I know how all this works

I only do a couple of videos a week and

by the time you're able to watch those

videos there's a lag so if I'm coming

out with bullish trades and bullish

trades and bullish trades when the hurt

finally comes you're going to be stuck

because I've been giving you bullish

trades so instead I'm trying to give you

some lead time to make sure that you're

adjusting your portfolios and your

trades and you're reducing your long

exposure eventually when we get the

pullback you're going to have a lot of

stocks that you can take a look at

because you'll have developed a watch

list based on the picks that I've given

you so please again don't take my word

for it go back and watch my videos from

two three four weeks ago and get a feel

for the warning signs that I was already

seeing in the marketplace

Ula that's a short that gave you about a

week and a half ago that was during one

of the Live Events and you can see how

the stock had broken down this was a

breakdown below a major horizontal

support level and then it

compressed in my most recent videos I've

reviewed the stock and I've told you I

still like the short it had to digest

some of these losses and then bam the

sellers were right back again this week

so that's performed well uh uh a week

ago I showed you cost Costco the stock

has been relatively weak I Lov this long

bearish engulfing candle here that told

me that the next move in the stock was

going to be lower you can see how the

stock sold off and then it compressed

had to digest some of these losses

eventually the sellers were able to

knock it down again and then it's

compressed I still like CCO as a short I

believe it's going to hit have another

leg lower perhaps down to the 100 day

moving

average I do feel that right now we're

seeing a little bit of a flight to

Quality after this market decline that

we saw this week CCO is a relatively

stable stock because it's a consumer

defensive stock these are not typically

Big Ticket items for Costco people are

buying groceries and such so it's going

to hold up relative well but I am

looking for it to Stage its next leg

lower I've also mixed in a couple of

Longs in there so we'll take a look RTX

was a long that I gave you about a week

ago I'd mentioned we're day trading lots

of intraday volatility so it's good to

have some Longs and some shorts and you

can see this is what relative strength

is all about this is the market this is

the daily chart of the market here here

you can see Heavy selling in the S&P 500

what has a stock done during this

selloff it's continued to move higher

hwm was another long that I highlighted

during the live event this week mind you

during a live event we were pre

fomc we were pre Amazon we were

preapp we were pre jobs report lots and

lots of information coming out this week

so I was not willing to commit to one

side or the other on a swing trading

basis but that's about to change so make

sure that you watch the rest of this

video I'm going to be taking some time

off so I'll be doing this video I'll do

a live event Wednesday and then I'm

going be off for about a week or so so

the instructions that I give you in this

video are going to be very important

because they're going to have to serve

you for about another 10 days so you can

see how

hwm held up well until

Thursday Friday morning we get this open

below AV wape and we already know that

when we have a stock that's reported

earnings we need to give it four five

six days maybe even two weeks to let it

kind of digest these gains but there

were some nice opportunities to day

trade that when we did the live event on

Wednesday Wednesday so I'm going to take

a look at Wednesday's price action live

event took place in here stock did have

a nice move higher and then it closed a

little bit lower but you can see even

Thursday nice opportunity to take some

gains and now you get into a little bit

of a gap reversal in here there's no

reason to day trade this stock from the

long side MK in the Wednesday live event

was a short that I gave you so let's

take a look at MC let's see what

unfolded I'll tell you how I traded it

so we had this nice decline in MC on

Wednesday and the live event came out

somewhere about in here and you can see

how the stock continued to move lower

closing on its low so from the time the

live event was put out uh I know I was

trading the uh August puts and those

were the 115 puts those are somewhere in

the $280

level when we started the live

presentation and by the

low this was on Thursday morning I

exited them at about

$370 that was a nice trade a good winner

after a couple of heavy days of selling

you can expect that the stock is going

to find some support that's a theme

you're going to hear a little bit about

in just a second when we're talking

about the market so in any event yes

Merc did bounce so you had to take some

gains take a look at the daily chart

here and you can

see big heavy selling after

earnings big follow through selling well

this is what we were taking advantage of

Wednesday and Thursday morning so you

got to take some gains along the road

and you can see that we had a

major long-term trend line

boom boom boom that we were bumping up

against these are our automated trend

lines I would pay attention to them

they're very important especially one

that's that long term so look at where

the stock bounced huh I wonder if these

trend lines are valid so these are all

automated they make it very easy for you

to see where these major support and

resistance levels are coming in these

are significant level so you get the

stock bouncing this is Av WAP right here

and you can see that it's going to hit

some resistance there's the 200 day

moving average it's going to H A Little

Resistance around this AV weap e the

news was not good for the company they

lowered guidance so I would like another

bite from this apple because this is a

major technical breakdown what would I

do how will I know well I can use a

couple of of other indicators like let's

say

LSI and I'm going to put that on the

chart and I'm going to go into maybe a

30 minute basis just a little bit longer

term what I'd be looking for is a

breakdown below 80 because that's how

you trade L RSI and right now that

signal would have come through and this

would tell me that yeah you'd want to

evaluate this stock for a potential

entry off of a bounce there's your

bounce

that now the stock is starting to weaken

and it could move lower so one thing I

can do here is say yeah you know what

the stock held up pretty well on Friday

Market had really really weak price

action but the stock held up strong so

maybe I'm a little bit early on this

short so instead of taking a position

I'm going to double click on the low of

that bar right there and I'm set an

alert if the stock rolls over I've

already got lrs

going my way on a 30 minute basis if it

breaches the support level yeah the

sellers might be back but after big

selling like that and big follow through

selling like that and follow through

selling on Thursday it's not going to go

down forever you're going to get a

bounce in there somewhere shorts are

going to take profits buyers might

nibble a little bit so you can expect

these retracements but longer term this

stock wants to go down so set some a

alerts I can also go into an H1 basis

take a look at that and go oh look LSI

is still well above 80 so why don't I do

this if I want to have an alert I'm

going to create an

alert based on

LSI being below 80 so I'm going to click

that below 80 on an H1 basis click that

less than sign right there add it

now I'm going to get an alert if this H1

goes back below 80 that would be a

legitimate cell

signal and I don't have to act on the

signal right away but what I want to

evaluate is what happened on that bounce

how tall was that bounce did I see any

heavy volume and stack green candles

that might be a warning sign that hey

this stock still has more upside to it

or was the bounce weak shallow wimpy

mixed overlapping candles what was the

bounce like that's where I'm getting my

information from that's the clue I

already know blam sellers are there what

did the bounce look like is it time to

get

in so I set my alert and I'm going to be

EV going to be evaluated it I'm going to

be evaluating the market as well so

let's go in let's talk market we've been

waiting for this news and we knew that

there was a major window that was

approaching and that window was this

week Mega cap tech stocks we had a

couple of them the previous week super

super important so let's go through a

quick rundown of Mega cap Tech and how

it did Tesla down after the number

Google down after the number Microsoft

down after the number Amazon down after

the number Apple down after the number

the only one that was up after the

number was meta and that gave a lot of

its gains back so as one piece of the

puzzle that we're looking for which is

earnings mind you when the market was

rally rally rally mode for

the

last six months actually probably the

last eight 10 months since November

scroll out that was November you can see

the powerful rally that we

had it was all driven by meac cap tech

stocks 60% of the gains this year had

come from six or seven stocks in the S&P

500 and they comprise about

25% a quarter of the S&P 500 so when you

talk about gee what would be important

during earning season what would really

drive the market what would excite

investors it would be if Mega cap tech

stocks actually

outperformed well good results have been

priced in and there's been a lot of

excitement over AI valuations are

stretched that means that there's some

room on the downside so any kind of fear

that short sellers would have had before

Mega cap Tech earnings

releases waned very quickly and they

were going to wait for these tech stocks

to report because they didn't want to

stick their head in that news but once

all the mega Camp tech stocks have

reported shorts could get much more

aggressive and especially when almost

all of them had negative earnings

reactions

so now you've got Mega Camp tech stocks

out of the way what happened on the

economic front we had a ton of economic

releases this week we had ISM

Manufacturing weaker than expected in

fact haven't seen a weak level like that

for quite a while I believe it was the

lowest level of the year

46.8 that's contraction territory ADP

how did that come out well well 0p I

believe the number was somewhere in the

122,000 range much softer than expected

so job growth in the private sector was

starting to

slow we also had the jobs report on

Friday much weaker than expected I think

it was 114,000 if my memory serves me

much lower than the

172,000 that everyone was expecting so

now now all of a sudden where the

economic releases had been chug chug

chugging along everything was looking

pretty good now all of a sudden

everyone's fearful that hey we could be

going into a recession the unemployment

rate is starting to spike here we did

have a couple of Clues we had initial

jobless claims came in at 245,000 so

that's just a weekly number and we get

these weekly numbers constantly

that was the highest level that we've

seen this year

uhoh little bit of a warning sign maybe

so we're starting to see the employment

picture Wayne and that Beed out in the

jobs report on Friday now in the initial

stages of a market decline when you have

this type of trend strength buyers have

been conditioned by the dip by the dip

by the dip so there will be a little dip

buying in here now that we've tested the

100 day moving average but for me there

is a pretty good tell and it was right

in here when we had the 50-day moving

average that we had poked below okay so

now we've had a decent little pullback

we're looking for a bounce this week

again we have been day trading for about

the last 3 weeks with fantastic intraday

ranges there was no reason to take any

overnight risk let's wait and see if my

thesis was right that the market could

possibly be rolling over so we're in

wait and see mode and you can see how we

had this test of the 50-day moving

average and a really pretty substantial

bounce on Wednesday and then we also had

the fomc statement which was kind of a

nothing Burger on Wednesday but I think

the real selling started to come through

Thursday and Friday especially after

those Mega cap Tech earnings releases so

what did the FED say well the FED said

you know economic growth seems pretty

stable right now and they didn't really

give anything new for us to sink our

teeth into the market has been waiting

for a rate cut in September and the FED

certainly didn't give the market any

warm fuzzies to latch onto the FED is

going into recess for the next month and

a half Washington DC is going into

recess for the next month so who's

minding the

shop

nobody well the market gets nervous over

all of that and August and September

even through most of October that is a

seasonally bearish period for the market

I also think that the election are going

to start Weighing on the market where it

seemed fairly certain that Trump might

win a few weeks ago the market Was

preparing for that and I'm not making a

political statement okay so just dispel

that but the market had some

certainty okay it looks like the

election is going to go this way right

now there's a lot of uncertainty all of

a sudden the polls have shifted and it's

more of a 50/50 proposition and I'm not

trying to predict ICT what the election

is going to do or what the election's

going to be the market trades off of

uncertainty and there's a bit more

uncertainty in terms of the elections in

terms of where interest rates might go

in terms of economic growth in terms of

earnings all of that is starting to

weigh on the market and it happens in

August September October most years the

other thing that you have coming into

play right now I've also mentioned this

recently is we're heading into a news

vacuum this was the last really big

piece of news that we're going to have

for a while and so whatever happened

this week whatever result we had up or

down is going to impact the market for

probably the next five or six weeks

Traders are going to take time off