The Biggest Mistake For An Investor: Options... Small and new investor make many mistakes. One of the biggest mistakes for an investor is to start trading options instead of stocks. The mentality of a small investor is to take their small investment account and go right into the options market. They do this because options tend to give the biggest returns. The common thought process is that the new/small investor can grow their account quickly. However, with big returns is mega sized risk. There is literally no way a new investor with no experience will have control of their emotions and be able to handle the crazy moves in the options market. The combo of inexperience and risk in options trading equals losses. So a new investor with a small investment account makes the biggest mistake they can. The key here is the ‘get rich quick’ scheme. They want to turn their $2,000 investment account into $100,000 overnight. 99.9% of these accounts will go bust. The smart decision is to build it slowly. Turn that $2,000 account into $4,000, then $8,000, then $16,000. Add money and compound the gains. While it takes longer, it is the safer way. In addition, this method had a high success rate. While I can preach this until I am blue in the face, most newer investors cannot keep the lure of fast money down. Wisest advice I have ever given? Have realistic expectations and understand that building real wealth takes time. Invest/trade stocks instead of options. Options should only be used on fun money and as a hedge. For example, my personal options account is 1/10 of my swing trading account. Inside of that options account, I put only 2% of that account in each options position. I fully understand the risks and there for I only commit a tiny amount of money to options. This is what smart money does… Gareth Soloway Chief Market Strategist InTheMoneyStocks.com
Stock Chart Double Top Alert $NVDA... https://inthemoneystocks.com/stock-chart-double-top-alert-nvidia-corp-nvda/
Stock Chart Bottom Signal: Groupon Inc $GRPN... See the trade here: https://inthemoneystocks.com/stock-chart-bottom-signal-groupon-inc-grpn/
Stock Chart Breakdown Alert: Agilent Tech (A) Shares of Agilent Technologies Inc (A) are triggering a stock chart breakdown alert. The stock is breaking its bear flag formation and moving below the trend line trigger. This signals a move to a target of $77.00. The stock has been under performing the overall stock market for the last month and it likely tells us negative news is on the horizon. In other words, smart money has been dumping heavily. The stock chart tells the tale. This is a stock chart breakdown alert on Agilent Technologies Inc. See the chart here: https://inthemoneystocks.com/stock-chart-breakdown-alert-agilent-tech-a/
As nasty as the fall is on $GRPN, actually at a key support here. Maybe a bounce back over $2 coming? https://twitter.com/GarethSoloway/status/1230190648474521600
Double Bottom Chart Pattern: Schlumberger $SLB... https://inthemoneystocks.com/double-bottom-chart-pattern-schlumberger-slb/
Oil Tags Key Low Support In Commodity Crash Oil prices crashed lower after a price war erupted between Saudi Arabia and Russia. With the backdrop of coronavirus, oil dropped as much as 30% in the overnight before recovering slightly. Down more than 50% in total from where oil was trading in January 2020 has created all out panic. While investors and traders may succumb to panic, spot crude oil (WTI) actually hit major support at the $30 level. This happens to be the same level it hit back in 2008. It is also a major line where US producers stop producing. That can likely curb some of the oil supply. In addition, one has to wonder if Russia and Saudi Arabia will come to their senses as they lose money, eventually deciding to agree on production cuts. Having seen the chart, I bought oil down at these levels, expecting a near-term bounce. This is by no means a long term investment, just a near-term trade. I expect a bounce back to the $40 range in the coming weeks.
Monday Key: Can the markets get follow-through. During this massive downturn, the markets have not had 2 up-days in a row. Something to watch on Monday - Gareth S.
Market crashes have occurred throughout history. What is happening now has happened before. As written in the book of Ecclesiastes, there is nothing new under the sun. Every market crash at some point will also experience a bounce. This current market crash has seen the Dow Jones Industrial Average (DJIA) fall by as much as 34% in just six weeks. So when a bounce does actually arrive it can be fast and sharp. While most investors will talk in terms of points when a bounce begins, I prefer to look at retraces. A simple 0.382 retrace will take the DJIA back up to 22,550 level. So this is a very good target for traders to watch. More conservative traders should note that a simple 0.25 retrace takes the DJIA to 21,000. Either way, these are some short term targets that I’m watching for right now. Note the chart below and trade accordingly… See the chart here: https://inthemoneystocks.com/what-kind-of-bounce-can-we-expect/ Nick Santiago InTheMoneyStocks Chief Market Strategist
These days there are so many stocks that have been absolutely decimated from the recent stock crash. Many stocks have declined by 50% or more in past 4 to 5 weeks. Often, when we see declines such as these there will be opportunities in many different stocks and sometimes different sectors. The best stocks to look for will be stocks that declined less than the major stock indexes. So if you look at the Dow Jones Industrial Average (DJIA) you will see that it fell by as much as 34.85% on March 23, 2020. If you can find a stock that did not decline as much as the DJIA it would be worth keeping that stock on the radar since it showed relative strength. Once a bullish pattern forms in that equity it will likely be a buying opportunity in that particular stock. Another method that I like to use in crash markets is to look for stocks that have recaptured the 50-day moving average. Most institutional investors will look for stocks that are trading above this important moving average and so should you. Again, wait for a bullish pattern to be formed and then you have a trade on your hands. This is a time to pick through the rubble if you are going to find winning stocks. Remember, this COVID-19 crisis is not over just because the market bounces, so it is best to stick with strong stocks in this environment and nothing less. See the chart here: https://inthemoneystocks.com/picking-through-the-rubble/ Nick Santiago InTheMoneyStocks Chief Market Strategist
As the stock market bounces sharply over the last few days, many investors are wondering if the worst is over. The answer is likely no. This bounce is based on massive money printing as well as the hope that Trump can somehow open the economy in 14 days. That will not happen. Cases may not even have peaked in 14 days, let alone started to go lower. In fact, experts expect there to be as much of a year of social distancing required, perhaps more. There is a worst case scenario for the S&P and investors should pay attention. The government can only print so much money and send so much in stimulus checks before it becomes insolvent. The Federal Reserve is in the same boat. The longer business suffers, the more likely corporate debt creates a major credit crisis. In fact, the Federal Reserve has already been putting out fires everywhere in the credit markets. The system has so much debt in it, from individual to corporations, all the way to governments, it may totally collapse in the worst case scenario for the S&P. If this happens, at a minimum the S&P (SPY) will trade down to its 2007 highs. This 2007 high was a double top from the 2000 high. Resistance (double top) now becomes epic support. The price point at this key level is $155.00 on the SPY (tracking ETF for the S&P). That means from the current level, there is as much as another 47% downside in the market. However, there is AMAZING news. Swing traders like us will make fortunes during the ups/downs of these moves. Just like I made a killing over the last month, there will be at least a year of insanity to bank millions on. The key is to be nimble, quick and buy key levels, and sell into resistance. Learn and profit. That is the way to turn this epic collapse into a defining moment in your financial career. Check out the chart below... https://inthemoneystocks.com/here-is-the-worst-case-scenario-for-the-sp/ Gareth Soloway InTheMoneyStocks Chief Market Strategist
President Trump tweeted about a massive infrastructure bill today. This is a no brainer when we emerge from COVID-19 lockdown. It is something the country desperately needs and will put millions of people back to work. The government is willing to print trillions of Dollars and this is probably the best way to kill two birds with one stone; get people to work and fix a major issue in this country. The top play for me is United States Steel Corp. (X). This stock is trading around $6.26, down from its 52 week high of over $20.00. When Trump imposed the tariffs on China a few years back, United States Steel Corp. was trading near $50.00. While many companies could be the recipient of business from a stimulus bill directed at infrastructure, US Steel likely has the most upside. 200% upside just gets it back near its 52 week high. Keep a close eye on out for more news on an infrastructure bill. But my guess is it will be the final stimulus at the end of this pandemic. I am a buyer/holder of US Steel. Check out the chart here... https://inthemoneystocks.com/the-infrastructure-play-that-could-make-you-rich/ Gareth Soloway InTheMoneyStocks Chief Market Strategist
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Worst Case Scenario: $AAPL Price Target $150... See it here: https://inthemoneystocks.com/worst-case-scenario-apple-price-target-150/
"Master Trader Nick is Catching Knives and Hasn't Shed a Drop of Blood!" LISTEN: https://www.spreaker.com/user/appeal2/nick-santiago-4-3-20
Buy Signals On Airline Stocks But High Risk There may be a glimmer near-term as buy signals on airline stocks show up. Stocks like Spirit Airlines Inc (SAVE), American Airlines (AAL) and Delta Airlines (DAL) all are hitting key technical levels. Delta and Spirit Airlines both filled major gaps on a classic retrace of their recent bounce. In addition, all airlines have major technical time counts hitting today. Time counts are cycle related and potentially signal a reversal, in this case back up. It is important to mention, these are all extremely high risk. The sector is moving on average 10% a day and it is possible for these factors to fail. I am long some airlines today and will look to see if a pop comes in early next week. I am not looking to marry these stocks, just a quick swing trade. The buy signals on airline stocks does excite me and got me to accumulate small positions today. See the chart here: https://inthemoneystocks.com/buy-signals-on-airline-stocks-but-high-risk/ Gareth Soloway InTheMoneyStocks Chief Market Strategist
There may be a glimmer near-term as buy signals on airline stocks show up. Stocks like Spirit Airlines Inc (SAVE), American Airlines (AAL) and Delta Airlines (DAL) all are hitting key technical levels. Delta and Spirit Airlines both filled major gaps on a classic retrace of their recent bounce. In addition, all airlines have major technical time counts hitting today. Time counts are cycle related and potentially signal a reversal, in this case back up. It is important to mention, these are all extremely high risk. The sector is moving on average 10% a day and it is possible for these factors to fail. I am long some airlines today and will look to see if a pop comes in early next week. I am not looking to marry these stocks, just a quick swing trade. The buy signals on airline stocks does excite me and got me to accumulate small positions today. See the chart here: https://inthemoneystocks.com/buy-signals-on-airline-stocks-but-high-risk/ Gareth Soloway InTheMoneyStocks Chief Market Strategist
