The Stock Market Bubble and the New Market Professionals; Premarket Comments from August 3

The Entry Points

It’s too easy to be a trader. It’s too easy to be a market expert. All you need to do is to put in a few hundred dollars to open an account. And voila, you are instantly a professional trader. And now with social media, almost everyone has a perfect insight into markets – AND they need to tell the rest of us idiots.

“Back in the day” it required much more money, and much more experience, to open an account. There was no internet, no internet experts, no on-line trading, only phone calls, the fees were very high, it was not all that easy to buy a stock – and in a way, that was all actually a plus. It forced people to have some sort of knowledge base, some sort of experience, some “training”. They had put some money away, a bit of wealth, had a bit of life experience. Meaning there was a greater likelihood that people were more responsible, and had a better work ethic. Yes there was plenty of incompetence, but not nearly as much as today.

Now, the situation is pretty grotesque. Have you been to the gold websites, have you been to the permabear websites, have you been to Stocktwits? ALMOST EVERYONE – is an expert, knows the stock market is a bubble, loves to call tops. Almost everyone knows that the tariffs and the higher interest rates and the US debt situation and the high stock valuations, means – the stock market can’t keep going up, is a joke, is manipulated, is putting in a huge top. And ALMOST EVERYONE has total ease of entry to be able to tell the rest of us dumba—-s what we should be thinking and should be doing. Of course these same people, who know so very much, have been wrong literally for almost 10 years, but yet their analysis is still thought to be very sound and sane and well thought out.

 

August 3 Premarket Comments:

The jobs fantasy number is out, below expectations and the markets are moving. Stocks discussed below, bonds I do not care the reaction, it is not in a shorting area bow since prices have dropped. And the only trade I’m looking for in bonds is a short sale. They are in a huge bear market which will last for another 20+ years. Crude oil is in a multi-year uptrend and reaccumulating. Gold did get down to and below xxxx, so that is constructive. It is in a very big xxxx, I have repeated that since 2014. It is not in a big picture uptrend, I have repeated that since 2015. Accum, overall, itself has different parts to it, on different time frames. Gold has broken xxxx low. But again, it is in big picture accum. So to repeat, I only trade uptrends. Investing in gold, into weakness, below the previous range, that I have done since December 2015. But trading is a whole different deal. Uptrends need to set up. Gold needs xxxx on 60 minute bars.

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I have generally 4 long side trade setups, with variations, but basically 4 – the conditions are:

brand new breakouts and pre-breakouts, recent breakouts, pure runners, and complex bottoms.

Recent breakouts, those are “dip buys”. That is the setup. And that can be, should be, honed itself.

Those 4 are the technical situations (analysis) where I will implement specific trade setups. And that is such an important distinction – I do not trade my analysis, I trade my setups. Being able to recognize well that something has broken out is NOT a trade setup.

And these 4 are put into and honed into different time-frames, and different tiered stocks. For example, a bounce trade, is specifically with smaller stocks, or the day of the breakout in the big stocks. That is it.

Different setups are below.

The stock market – IT IS A BULL MARKET. And there is shorter-term stuff within there of course. Shorter-term, a whole slew of breakouts, and they are working. More importantly, the best stocks are working. Good for the intermediate-term. But xxxx?

 

The SPY yesterday did one of my very favorite call option setups, daytrade or overnight only – this has been discussed several times, in detail. It is VERY specific – after 3 PM, recent news-related move, melt-up day, forms the afternoon trading range, breaks the range to the downside, spring trade. AND it MUST have a big red volume spike. In this specific trade setup, it is a MUST and BULLISH:

 

 

I have given so many recent breakout stocks. The bigger stocks, the earnings are literally part of the setup. And they, the earnings, must themselves be a “strong stock” going into the gap up/breakout/great earnings news day. And the earnings must be above expectations. And the float is part of this. As is the time-frame, like with SQ below. And there can be intraday buys, looking for 10%+ – only on the the breakout day, when they are the most active. Another reaccum trade will take time to setup.

So then, what are these setup types? Do you understand this?

WIFI   float 40M

“LOS ANGELES (AP) _ Boingo Wireless Inc. (WIFI) on Wednesday reported second-quarter net income of $2.1 million, after reporting a loss in the same period a year earlier.

The Los Angeles-based company said it had profit of 5 cents per share.

The results surpassed Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for a loss of 14 cents per share.

The provider of Wi-Fi hotspots in airports and other public places posted revenue of $59.6 million in the period, which also topped Street forecasts. Five analysts surveyed by Zacks expected $56.9 million.

For the current quarter ending in October, Boingo said it expects revenue in the range of $60 million to $64 million.

The company expects a full-year loss of 36 cents to 24 cents per share, with revenue ranging from $243 million to $250 million.”

HABT  discussed yesterday, float 18M

“Habit Restaurants (HABT) just came out with quarterly earnings of $0.08 per share, beating the Zacks Consensus Estimate of $0.03 per share. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 166.67%. A quarter ago, it was expected that this operator of fast casual burger restaurants would post earnings of $0.03 per share when it actually produced earnings of $0.01, delivering a surprise of -66.67%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Habit Restaurants, which belongs to the Zacks Retail – Restaurants industry, posted revenues of $102.85 million for the quarter ended June 2018, surpassing the Zacks Consensus Estimate by 3.14%. This compares to year-ago revenues of $83.33 million. The company has topped consensus revenue estimates just once over the last four quarters.”

 

 

CF discussed, float 230M

CF Industries Holdings, Inc. CF reported profit of $148 million or 63 cents per share in the second quarter of 2018 compared with profit of $3 million or a penny per share a year ago. Earnings in the reported quarter beat the Zacks Consensus Estimate of 42 cents.

Net sales increased around 15.6% year over year to $1,300 million in the quarter on higher sales volumes across most segments and increased average selling prices across all segments. Sales in the quarter surpassed the Zacks Consensus Estimate of $1,199 million.”

 

FTNT  float 150M

“FTNT reported strong results for second-quarter 2018, wherein revenues and earnings surpassed the respective Zacks Consensus Estimate.

Fortinet’s non-GAAP earnings per share of 41 cents beat the Zacks Consensus Estimate of 35 cents and marked an improvement over the year-ago quarter’s earnings of 27 cents.

Revenues of $441.3 million surpassed the Zacks Consensus Estimate of $425.5 million and increased 21.4% from than the year-ago quarter.

A large number of deal wins and customer additions during the reported quarter proved conducive to top-line growth.

Management notes that strong global demand for the company’s Security Fabric offerings due to digital transformation and security refresh cycle across most industries is a tailwind. The company’s Security Fabric architecture, its cloud offering and customer FortiASIC technology are helping it expand in the market.”

 

PAYC discussed a few times, big winner float 140M

“Paycom Software (NYSE: PAYC) reported second-quarter results on Tuesday, and they showed that sales growth accelerated modestly during the period to 31%, which easily exceeded the high end of management’s guidance range. At the same time, expense growth continued to trail sales growth, which enabled magnified gains on the bottom line. When coupled with stock buybacks, non-GAAP earnings per share jumped 69% in the period.”

 

INSM  from my 4/2 list, look at the short-term breakout, needs to be sold at least in part, float  70M

“BRIDGEWATER, N.J. (AP) _ Insmed Inc. (INSM) on Thursday reported a loss of $76.4 million in its second quarter.

On a per-share basis, the Bridgewater, New Jersey-based company said it had a loss of $1.

The results surpassed Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for a loss of $1.01 per share.”

  SQ  SQ from my 4/2 list, the complex bottom patterns, take some profits on those, float 290M

“Mobile payment company Square (SQ) reported its second-quarter results on Wednesday, August 1. Square’s net revenue growth accelerated in the second quarter. The company generated net revenues of $814.9 billion in the second quarter, growing 47.8% YoY (year-over-year). Square’s adjusted revenues came in at $385.0 million, beating Wall Street estimates of $376.6 million.

Square posted its smallest net loss since going public in 2015. The company posted a net loss of $5.91 million in the second quarter, compared to a net loss of $15.96 million in the second quarter of 2017. Square posted adjusted EPS of $0.13, beating analysts’ estimates of $0.11.”

 

 SM  float 80M

“SM, second-quarter 2018 adjusted earnings of 15 cents per share beat the Zacks Consensus Estimate of 6 cents. Meanwhile, the figure declined from the year-ago quarter’s earnings of 32 cents.

Total revenues surged 55.8% to $444 million from $285 million in the prior-year quarter and beat the Zacks Consensus Estimate of $371 million.

Higher oil production and liquids price realizations aided growth, offset by increased operating expenses.

The company’s second-quarter production was 115.2 thousand barrels of oil equivalent per day (MBoe/d), down 8% from the year-ago quarter’s level of 124.6 MMBoe/d. The decline was mainly caused by the divestment of producing properties.”

 

VNOM from my 4/2 list, more new highs, I sold into the new highs, float 40M

 

 

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About traderscott 1146 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.

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