Warrior Trading Blog

+$2.4k in 1 hour on $MYND | Ross’ Trade Recap

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What’s up, everyone? Here we are. Monday morning, second-to-last day of July and finishing the day up $2,400. Another green day with some wild action today on AWX.

 

We’ve been talking about this stock for a week. It was last week that it started to move up, and every single day we were thinking continuation, continuation, continuation.

It was at $2 a week ago. Today, it hit a pre-market high of $36. What a move. We’re gonna talk about today what caused that move and how I traded it and what my game plan is now moving forward. I hope you guys enjoy, and if you have any questions, any comments, leave them below. I’ll come back through and answer them later today. Enjoy and I’ll see you guys first thing tomorrow morning for Midday Market Recap around 9:00, 9:15, live on YouTube.

Make sure you’re subscribing and have the alert turned on. That way, when I go live, you get the notification. See you guys tomorrow.

What’s up, everyone? All right, time to break down the trades from today. Finishing the morning up $2,424.40. You know what? I’m pretty happy with that. Another great day of trading. Made $3,700 on Friday, another $2,500, $2,400 today. Green is good and I wanna finish the last day of the month, tomorrow, with one more green day. That would be a great way to finish the month of July.

It’s been a really good month. It’s been a very interesting month with a couple of crazy moves on GBR, AWX, and a few others in between. Today, AWX is the one that we are watching the most closely coming out of the gates because pre-market, it hit a high of $36! This is crazy. The high Friday was $11.21. It was up 300% pre-market versus Friday’s close. Isn’t that insane? How did this happen? How does a stock go from, in a matter of a week, from $2.20 to $36? We’ll break it down in a minute.

Now before we do, I want to remind you guys that at 1:00 PM Eastern, we’re hosting an online training workshop I’m really excited about. I’ve been prepping for it for the last couple weeks. We hosted one earlier in July, which was a big hit. It was a lot of fun. We had great attendance, and so we’ve got another one happening today at 1:00 PM Eastern. Those of you guys who aren’t already in our Warrior Pro classes, I want you to click to register and be there at 1:00. A little under two hours, we’re gonna jump in.

That’s coming up at 1:00. After we do this recap, I’m gonna go for a little bit of a jog, get myself pumped up, and then I’ll be back here right around 12:45 to get the broadcast up and running, get situated, and then flip the switch to go live at 1:00 Eastern. Those of you watching this later on, the replay, and you missed the workshop, I’m sorry that you missed it. We’ll host another one soon.

Let’s see. The link is in the announcements tab, for those of you that are in chat, but I’ll drop it again right here. You can see the P&L today, $2,424. Green is good. Only one stock I traded. Kept it simple. We’ll talk about MYND. This one was on our gap scanner. During the workshop today we’re gonna be talking about how to find stocks to trade on any given day. Now for me, as a beginner trader, it was no doubt hard to find stocks to trade, but over the years, it’s become so easy that it’s second nature and I can do it in my sleep.

MYND, it was right on the scans right here. It was our second-leading gapper, with a low float next to AWX. We knew pre-market, because it was up 18% and because it had news, there was news out this morning at 7:31 AM, that this was a stock that was gonna be in play. Ended up squeezing from a high of $1.80 all the way up to a high of $2.78. Through that move, I made $2,400.

I wasn’t as aggressive on it as I could have been. My first entry was at $2 as it was squeezing up right here. It did a red-to-green move and then surged up. Jumped in at $2, scalped it up to $2.55, gave back a little profit getting it at $2.50, and stopping out as it came back down, but made back those losses right up here as it came back up to $2.50 and then right here as it squeezed up to $2.70, so a total of, I think, three separate trades on that one, but AWX is the one that I really want to talk about.

We started this month with a crazy momentum stock and we are finishing the month with a crazy momentum stock. Who knows what they both have in common, GBR and AWX? Well, they’re both similarly priced stocks. Fair enough. They’re both price … start at $2 and squeezed up. Both of them were parabolic.

Both of them were lower float stocks and both of them were bought by the company that owns SureTrader. What I want to do here is show you guys … We look up AWX … I’ll just pull this up right here. You can search all the filings for these big companies. AWX, I was asking myself, “How is this making this huge move? This is crazy. This stock keeps going up and up and up and up. What’s going on with it?”

I checked after hours on Friday and I saw, right here, posted after hours, a Form 3 filing. A Form 3 means somebody has taken a position of more than 10%, so 10%. That’s pretty big position. I check the document and I see Mint Brokerage International has filed a Form 3. I take a look at it and it shows that they bought 1.9 million shares on the open market, 1.9 million shares of AWK.

Mint Brokerage International, right here. If you go to suretrader.com, you’ll see at the bottom of SureTrader, of their website, “Owned by Mint Brokerage International,” right here. This is the same company. This is also closely associated with … the guys that founded SureTrader also founded SpeedTrader, which is located in the United States. If you go to mintbroker.com, you’ll see “Where are you from?” If you click the United States, it’s going to send you over to SpeedTrader. You’ll see at the bottom “Mint Global Markets.” These companies are all kind of connected.

Here you have the Form 3 filing on AWX and when I first saw this, I was like, “Okay. That confirms it.” I look at Mint Brokerage. I can click on their name right here and this shows me all of the other filings that the company has made, and boom. You go down here and you see 6/29 documents. What’s this? You click. Let’s see. You click right here and you see this is a Form 3 filing for GBR, New Concept Energy. They bought one million shares of GBR. They bought one million shares.

That was on 6/29. We go back to GBR. This was how we started the month of July. We started with this big move on GBR. I made some good money on it. It was a great fund trade. This was 6/29. This was the day they bought. The Form 4 is when they sell. They bought on the 29th and then they sold … let’s see. This is a Form 4 for the same stock. They sold 100,000 shares on … what is this? July 2nd. Then they sold another 900,000 shares on the 3rd. We go back to the chart. This day was the 2nd and this day was the 3rd.

What you see is this pattern where the stock made this incredible move, absolutely parabolic, incredible, but it didn’t hold the move and probably part of that is because they were selling a million shares. That’s a really big position to sell and this just tanked. Now, we ended up having a couple more trades on it and everything. We made some money. They’re filing. They’re doing everything they’re supposed to do. They’re taking a big position, and then they’re selling it. Anyone can do that. If you want to buy two million shares, you can buy two million shares. You file the paperwork, whatever, and the stock goes up, well, you make money and you sell it. That’s just what’s happening, but it’s a catalyst.

When someone buys a million shares or two million shares of these very thinly traded stocks, that’s a strong catalyst. It happened on GBR. Then AWX here, the Form 3 came out that they bought it. The date was … whatever it was. Friday, after hours, the 27th. When people saw that Form 3, they were like, “Oh my God. This is what’s going on? They’re buying up a big position,” and short sellers start to cover. That’s why after hours when that was posted, it starts to really take off. I was thinking today this thing … I mean, I was like, “It might go to $50. It might. It might just keep going.” It hit a high of $36 pre-market and I was like, “Oh my God. This is going to be crazy,” but by the time I came into the office, it was already back down to $24. Since then, it’s been selling off.

Now, you see this imbalance to the sell side, so I guess the question is going to be, “Do we see a Form 4 filing at the close today that they sold it, or are they still holding?” I don’t know. I guess we’ll find out, but it definitely today is weaker than I thought. I thought today we were going to see fireworks and it was going to do this final big squeeze out of the gates, but it didn’t. I knew that this would be a short based on the price action of what happened to GBR, so I knew it would be a short. I just didn’t know when, and that’s the challenge that every short seller has, is you know this will go down most likely when they sell their two million shares, but can you hold while it’s still squeezing up?

Someone might have said on Friday, “This stock has no news. It’s going to come down. I’m going to short at 11 bucks.” That was before they knew that Mint and SureTrader had bought this big position. At that point, they were like, “Yeah, I’m going to short this,” and they were right because it is coming down. It’s back at $11 now, but could they have afforded to hold it when it was at $36 pre-market? Most people can’t. I mean, it’s just not affordable. That’s the same thing with stocks like LFIN. You would have been right to have the bias that this stock is going to come down. Remember in May … No, this was not in May. When was this? This was back in November. This thing squeezed up to a high of $142 per share. Now, this was a little bit different and there was a catalyst on this, that they were getting into the crypto markets, which was kind of a crazy thing, but those were really hot at the time. That was maybe a little bit of a stronger catalyst. Anyways, it squeezed up to $140, and then now it’s back at $6.

If you shorted at 60 bucks, you were absolutely right. The question is, “Can you afford to hold it when it goes this far against you?” Most can’t. They end up covering, losing money, and maybe they get short again, but maybe at that point when they want to get short, they’re broker’s taken away shares to borrow. If I go to AWX, there’s no shares available to borrow. It’s back now, coming back down here again. It’s been kind of all over the place today. Well, mostly down, I guess, but it’s been popping up and then selling off and it’s been halted four or five times.

Here was my biggest concern. My biggest concern was the risk that this could get halted on a T-12. A T-12 is a circuit breaker halt and it’s halted pending, basically, providing more information the exchanges about what’s causing this crazy price action. LFIN was halted on a T-12. It was halted … Let’s see. Where was it? I’m trying to remember where it was halted, but it was halted on a T-12 for a while. I’m trying to remember where that was. Oh, it was right here.

It was halted on April 6th on a T-12 right here and then it ended up resuming way down at $5. It was halted at $28 and it resumed at $5. It lost 75% of its value during the T-12. Think about that, 75% of the value, gone. DRYS, some of you haven’t been trading long enough to remember when this one made its big move, but here it is back in December 2016. It squeezed up. It was then halted on a T-12 and you can see how this thing came all the way back down. I mean, it was really brutal. Let’s see. When was that? I’m trying to remember, but anyways, this one got halted and it dropped. It was down 50%.

WNIS, Wins, this stock really crazy. It squeezes up from $20 up to $230, ends up getting halted on a T-12, is halted for six months. For six months, your money’s tied up and you can’t trade. Finally, it resumes at $46 per share, down 75%. My concern with AWX was that even though there’s a catalyst, which is the Form 3 filing of a investor taking more than 10% of a stake, and that by itself can be a strong catalyst because if Warren Buffett or Carl Icahn or some of these other guys take big stakes, that can be enough for people to jump in, that might be considered enough of a catalyst that it won’t get halted, but what if it does? If it does, I can’t risk losing 75% of my position.

Even if I buy just 1,000 shares at $25, if I lose 75% of that, I’m looking at a $20,000 loss and I can’t afford that. I mean, I can afford it, but mentally, I don’t want it to happen and we could all do without a big loss like that. For me, the downside risk was just too high. Even if this ended up squeezing over $36 and going to $40 and $45 and $50 and maybe even squeezing up to $75 or $100, for me, the risk of it getting halted on a T-12 was just too high.

This is what I do. I say, “You know what? This train left the station, some great opportunities on it last week, but at this point, it’s off. It’s gone. I can’t keep trading it, so I’ll wait for the next one to take off. The next one that shows strength, I’ll jump into that.” Today, that ended up being MYND. There’s $2,400 for me that was low-risk. I felt comfortable in those trades and I booked my profit.

Right now, I trade with Lightspeed and Lightspeed, they’re not trading the stocks that I’m trading. They’re not buying AWX. They’re not shorting AWX. They’re not traders. They’re my broker and I feel comfortable having $125,000 of my hard-earned money sitting in this account because I know that they’re not trading against me.

They’re not trading the other side of me. I think that’s maybe the thing that some people are a little uncomfortable with SureTrader and Mint Broker, that they’re actively trading the stocks that a lot of their clients are trading and probably a lot of their clients were wanting to short this because it was up so much. While you’re shorting it, your actual broker might be buying it? That feels like … I don’t know. It feels like you’re trading against each other and you know who’s going to win. It’s the one with the bigger account and the more money.

I don’t know. I guess it doesn’t make any difference at the end of the day, but it’s something that just, for me, I think I would get annoyed about and just feel like it wasn’t really fair that they were trading the opposite side as me. I don’t know to the extent that it is or not, but that’s how I would feel about it at the least. If I lost, I would feel that much more frustrated. That’s a reason that I’m really happy that I’m with Lightspeed now and I’m not trading at SureTrader anymore or trading at SpeedTrader anymore because they’re both kind of all affiliated with the same company. You guys do what you want. You feel okay with it, you don’t mind doing it, that’s okay. I don’t know.

Is it actually your money? Well, you’re helping them make money with your commissions and everything else, so is it your money that’s being used to trade now the opposite side of you? I don’t know. That feels like something that I wouldn’t be super happy with, but you guys, you do whatever you want and at the end of the day, we’re all small traders, small-time traders. We’re not trading millions of shares. We’re not making millions of dollars. It’s a couple thousand here, a couple thousand there.

What’s happening with your broker probably doesn’t make a difference, but I like feeling that Lightspeed is sort of a neutral party. They’re not trading the same stocks as me. They’re just looking out for my best interests. My commissions are $2 per trade, which is very, very low and they keep me happy, and so I’m going to keep trading there. If I found out that they were doing stuff like this, I would switch. I would leave Lightspeed and I would go trade with someone else, E-Trade or whoever it might be, because that’s just how I feel about it.

Anyways, I think that that’s kind of something to be mindful of. I hadn’t seen this happen before. When I did have my SureTrader account a year and a half ago, I don’t remember ever seeing anything like this. If you look at Mint Brokerage, this is the history of all of their filings. The first one ever is just this last month, so this is all new, this kind of thing that they’re doing and they’re no doubt going to make a ton of money. I mean, two million shares at $10, if they sold some of it pre-market, I don’t know. That could have been a $20 million winner. That’s a lot of money and good for them for having the insight to take this trade or whatever, but I still would just kind of have an issue with them trading against me. I don’t know.

Small account traders, you guys, there’s the CME Group. I know a lot of you guys have been trading there and you’ve been really happy with them, so that’s a good one. TradeZero, they’ve been pretty good for some of our international traders. They don’t accept US customers, but there are other options out there if you guys do have issues with it, but you’ve got to make those decisions for yourself. The reality is GBR and AWX, both of these stocks this month have given huge opportunities. They’ve been really volatile. Opportunity, volatility, that’s what we look for as day traders. I don’t want to hate on someone who’s creating volatility in the market, but you’ve just got to feel good about where you’re trading. You guys make those decisions for yourselves.

For me, we’ll see what happens with AWX, if it keeps trading up at these prices or if we see a Form 4 coming out after hours today or tomorrow that they’re sold. If that is the case, then it’s probably going to do the same thing GBR did and come back down. Then the question is, “Which one’s next? Which is the next one that is going to make a big move? Which is the next one that they might buy two million shares of?” I mean, two million shares is a huge position. If you were looking at stock like MYND, for instance, and it starts taking off and you just see these huge bids, big, big bids and it’s just taking off, you know someone’s accumulating a really big position.

That can certainly help you if you’re in early, so I think there’s definitely going to be this kind of speculation of, “Which one is going to be the next one? Is it going to be this one? Is it going to be that one?” I think every stock that starts to take off, traders are going to kind of have that question of, “Is there someone out there, Mint or someone else, buying a million shares of it?” I don’t know. We’ll find out the next day or whatever when we see the filing. I think they have to file it the same day. I’m not sure, but it’s definitely creating this kind of new dynamic to the market for small caps. It’s creating some sort of much-needed summer volatility. Volatility is what we look for.

You can see here, if you Google “NASDAQ Trader,” you’ll see the halts here. The stocks are halted at one, two, three, four halts on AWX, five. Oops. Let’s see. We’ve got one, two, three, four today. Five, six, seven circuit breaker halts on AWX today. It’s still only 11:40, so it’s still early yet. There will be probably more volatility in this name, but right now, it seems like it’s selling off, but at the same time, it wouldn’t shock me if I came back later this afternoon and saw that it suddenly popped to $20, squeezed out early short sellers, and then drops again.

I mean, it’s going to be volatile, but the reality is when you look at this from a technical perspective, this is what we call a shooting star candle. It’s a shooting star because this is the body, and then this is the tail. You know when you see a shooting star in the sky, it’s got this fiery body and the long tail? Well, that’s the same thing. That’s what this is. This is the body. This is the tail, and whenever you see that, it’s an indicator of weakness. It’s a weak candlestick pattern. It would be very hard for this stock to recover and end up squeezing back up. Having said that, on day two of GBR, remember it had this bullish engulfing candle where it was red and we were like, “Oh yeah. This thing is weak.” Then the next day, it starts to pop up and I’m like, “Yeah, guys. I don’t have much hope for it because look at how big the red day was yesterday and it just keeps going up and up and up and up.” I think that was when they were taking their one million share position.

Kind of crazy right there, but who knows? Having said that, though, I don’t think they can … I mean, unless they already sold, there’s not a lot remaining to add because this stock only has a three-million share float. There’s really only so many shares that you can add before there’s no more shares available to buy. There’s only another million available, so unless they sold a million and they’re going to buy back the million in the middle of the day, that would create a spike for sure, but otherwise, there’s just not a lot left to buy. I don’t know if it’s going to keep going up, but time will tell. My kind of whole approach is look for volatility. If I can manage risk and I feel comfortable taking the trade, I’ll take the trade, make some money, but I always keep in the back of my mind that risk of T-12 halts and I don’t want to be in a stock halted on a T-12. That could be really, really bad for me, and bad for anyone with a small account.

The Form 3 filing, it’s anytime you accumulate more than 10%. That’s the threshold. I mean, I don’t really know exactly how it works. I haven’t researched it a lot because for me, it’s not really relevant for my trading, but if you were swing trading and you were holding stuff overnight and you had a really thinly-traded stock, AWX, I guess anything more than 300,000 shares would be more than 10%. You have to file your Form 3 and Form 4 forms. I don’t know. I’m not an expert on this. I mean, I focus on the technicals more than anything. The fundamentals, they vary and they are what they are. We can have horrible fundamentals and a stock still goes up. This stock has no actual news beyond the Form 3s to account for this type of move. You could say, “Well, the stock has no material reason to move.” You look at their earnings, they’re not that great. This stock is not worth $10 a share, $15 a share, but meanwhile, it squeezes up to $36.

You got to be one or the other, a technical trader or a fundamental trader. I’m a technical trader. I focus on the technicals. That’s my job and I try to leave the fundamentals to the side, but the reality is now when I see a filing that says “Mint” on it, I’m going to remember GBR and AWX and I’m going to think, “Okay.” Well, we’ll see what happens with AWX, but this is the pattern that we’re seeing: A big, big move and then a fade on the backside of the move. Again, this is SureTrader, the company that owns SureTrader, Mint Brokerage International. The same guys who founded SureTrader founded SpeedTrader. They founded SpeedTrader first in the late ’90s. I was a client of SpeedTrader for a really long time, but I decided to leave there last year.

Lightspeed gave me a better offer on commissions, so I felt more comfortable moving over there. I was worried, just the fact that SureTrader gives us this kind of loop around the PDT rule. I was just worried that the SEC would come in and, I don’t know, at some point try to shut down SureTrader or something. They haven’t yet. Maybe they won’t, but it just kind of made me nervous being tied up in those companies just because I was worried that they would be under scrutiny, being formed by the same person and all these kind of similarities. I just felt more comfortable putting my money somewhere else.

I’ve been with Lightspeed now for a year and a half or so and I’ve been happy there. Given what we’ve seen now, I feel even better that my money is sitting over here. That’s where I’m at. You guys, you’ve got to make the decision that feels right for you. It’s always a battle because when you’ve got a small account, you don’t feel like you’ve got a lot of choices, but you do. There are choices out there. There are other firms. You vote with your money. You put your money where you feel comfortable putting it.

Anyways, that’s about it from me. Today, another solid day in the market, $2,400. I’ll be back at it first thing tomorrow morning and I’m hoping that we continue to see some volatility. I don’t think it’ll be on AWX. I think that one is done, at least as far as I’m concerned for my style of trading, but I’ll be looking for the next one to pop up and start to give us some momentum. I think there’ll be a lot of speculation of which one is going to be the next one to make the big move. Watch those scanners and keep your eyes peeled. When you start see the volume, you start to see the momentum, you’re going to want to watch that because I think they’ll start to take off pretty quickly.

Anyways, I’m going to go for a quick jog. I’ll be back here in about an hour and we’re going to start our workshop right at 1:00 PM. I’ll see you all in just about an hour. See you soon.