September 27 Premarket

To follow up on the comments about retailers yesterday, I then left this comment below. And again it is a bull market:

“As far as the retailers, and I meant to include upthrusts in that comment this morning also – LE, M, NWY, URBN, ANF, AEO, BIG, CONN, DKS, DLTR, DEST, TLRD, SHOO, WMT. Yes there are retailers still working, GOOS had a solid day, but nothing like the plethora which were working before. So now resetting/reacc or such can get more setups again.”

Yes some of the retailers are still working, GOOS was talked about in a conference call last month where we discussed how I “still really like GOOS“. And then a beautiful spring in the upper level bko area. But go thru that list above, the sector is not what it was when I was consistently, at the beginning of the year, discussing the great setups. And what a sector it did become. My 4/2 list was loaded with the retailers – awesome rallies in them almost across the board, many went to all-time highs. In a bull market there will always be leading sectors, hot sectors, lagging sectors, reaccumulating sectors – and speculative sectors like pot stocks were, and some of the stocks still were hanging on after the tops in the leaders CRON and of course TLRY. So we still had ALEAF, NXTTF, NBEV, IGC, TGODF. And yes for daytraders, there have/will still be bounces there.

But the rule I have taught over and over again, when there is rampant speculation in a sector and an overall sector tops, the leaders always top first CRON, TLRY and THEN the most speculative crappiest stocks always surge/soar and top last. Also, for daytraders/short-termers, those stocks can have awesome setups and rallies as they are ANGLING UP still, like with the bkos in NXTTF and ALEAF. And this is yet another reason why I far prefer short-term trading – developing setups and rules, professional attitude, relying on ourselves, ignoring everything which will not help our trading, HARD WORK AND CONSISTENCY – otherwise forget it, and it’s then why only 10% of the people make it.

Tuesday no trades, yesterday one good stock trade, 2 total screw ups in index option trading.

ALDX had a “bko” to all-time highs – bko in quotes because bigger picture the bko is low quality, I’ve discussed why that is with the technical action, over and over. And concerned about it being an upthrust on a daily. But very short-tem the trend was up WHEN it traded above the opening trading range of the day. That is what “tells” me to look for a “dip trade setup in the uptrend” for the day. And I did not feel comfortable in it and I took my 10% and sold right into the high of the day, which became not the high of the day as it then did a reac, but I just did not trust the overall situation so happy with the trade.

Then I switched to indexes as the Fed meeting was coming up. And at first I had a really good trade in IWM calls, entered at the 5th arrow, it had a very nice (options-wise) rally, but I started analyzing instead of just trading and using selling rules. I did not sell into the LHBL res, a really good trade then ended up with a scratch. Again – I STARTED ANALYZING – GUESSING. Thinking we should head back to the highs of the day, instead of taking out profits at a clear LHBL res. And then later in the day after the Fed, I took a 20% loss in SPY calls, as I thought it was a spike low/spring setup (arrow) of the 123 area which had just formed above it. That thing did not work at all, and I sold into the selling wave with everyone else. This whole business is probabilities and the right setup IN THE right technical situation. Get one of those wrong you really lower the probabilities.