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Warrior Trading Blog

A NO Trade Day is OK! | Mike’s Trade Recap

Mike_7.8

Good morning, guys. We are back here from the 4th of July holiday, and the market definitely seems to have a little bit of a holiday hangover. There’s really not much action to work with. That means a day of no trades, but that’s okay. Normal for the summer. We’re going to have to sit tight until that action returns. But the good news is that earnings are quickly approaching and that will definitely provide some better catalysts to help move these stocks around, which definitely give us some good opportunities for day trading. Let’s take a minute, and I want to break down why I didn’t take a trade in this morning’s session.

All right. Good morning, guys. Hope everyone had a great 4th of July holiday. Back here in the markets it’s Monday morning, and we have a little bit of a holiday hangover if you will. There’s just not really much action. It’s a holiday that you can definitely expect being that it’s summertime, middle of summer, that the action’s going to be light coming into the holiday as we saw and even now Monday morning thereafter there’s really just not much moving. That means today was a day of no trades. But I wanted to take a few minutes and talk a little bit about why I actually didn’t take any trades and show you the stocks that were in play and give you an idea as to why don’t those stock make the watch list?

First off we had the market gappping a little bit lower. That weighs on things. Traders definitely watch the open of the market to see the direction. As you can see we’ve had zero direction. Quick open and fade, consolidate, spike back up, right back to the low. Just grinding out sideways as we’re holding his ascending support trendline. We have a recent ascending support trendline that starts early June. Comes up here very well-established, well-defined and you can see today we’re just consolidating around that level. On an inside day, just really not much action to be had. That’s normal again for a… Especially a Monday in summer and being that we just came off a holiday.

But any event some of the stocks are moving today. SGMO. This one was moving this morning on a gap higher on some data. But this stock is just well below my minimum threshold. So my minimum threshold is $20. When a stock is below that, that instantly raises a red flag and tells me that I need to be extremely cautious because these stock under $20 just typically don’t move as well as the stocks that are above $20. Now, there are always exceptions to the rule. Some stocks that are below or just outside of $20, $18, $19, $17, if the technical setup is really good then there’s potential that I might keep an eye on it and potentially trade it if it sets up.

But this one is just well outside the threshold. I didn’t really see much of an opportunity on this. We were looking potentially for a gap fade on this. Out of the open is what I was talking about early in the pre-markets. For those of you that like to trade the low priced stocks, this had a perfect gap fade setup. You were making lower highs into the open. Essentially lower lows. Then right when that market opened you got a quick crack lower. About 50, 60 cents or so. But again, it’s fast. You got to be quick. It’s not really a stock that fits with my strategy because I’m looking to maneuver into a trade and hold it for a longer period of time relative to a move like this. That one is why it didn’t make the watch list, and I didn’t trade it. It’s just not really enough range to get moving. That’s SGMO.

SYMC, that was a stock that is a deal name with AVGO. Those two were gapping. I just stay away from deal names because again, this is the type of action you typically get. Sideways chop, untradable. Especially with some news like that where you really don’t know the outcome of the situation. That’s just how deal names trade. So, stayed away from that.

The other one, ITCI, that was gapping lower. This was on some data as well. It’s a bio stock. This one actually, even though again it’s far outside of my minimum threshold of $20, this one actually did have a pretty interesting technical setup. I did keep this on close watch but as my fear was confirmed that just not going to get much rage, I didn’t trade it. If you look at the daily on this, what’s interesting here is you had this major pivot around 1030, 1025. It went back some time here. It’s a big pivot in through this level. If it got through that, I could have seen this quickly fade down towards around nine around this last relative pivot here.

I was actually keeping this up because you were moving through this traffic, you were starting to move through the pivot, and it started to look interesting technically if you got below that. However, my fear on these names I you don’t really see that big of a move. All right? Then as you can see here today quick hard fade out of the open. Then just kind of chops sideways for the rest of the morning. Little break of the pivot confirmed by volume but no continuation. No continuation. That’s a problem. Can’t trade momentum if there’s no continuation. Right? That’s the issue that we had with this stock.

Now, probably scalp opportunities in this if you’re trading on the breakdown. Could you have got 20, 30 cents? Of course. But again, that’s not the strategy that we’re trading in the large cap room. We’re looking for stocks that have the home run set up that open up in the big windows and give us huge potential. You know, I didn’t really think we’d see it today. It’s just the technical setup was interesting. In the event that it really started to pick up momentum, it would have been a stock I would have considered. However, I would have been much… Had much lower size on the play. But technically worth keeping on watch again. Backed with all your major moving averages, sitting at a major pivot. That’s why it was worth the watch. However, it didn’t pick up the momentum we wanted through the break, so we didn’t trade it. That was why there was no trade on that.

Now, the last one we had on watch today, which was probably the one that gave the most opportunity, was AMRN. We’ve been watching this stock for several days simply because of it’s daily setup. It’s just been consolidating sideways. Really tight range here. Trying to bust through this trendline. Having troubles doing it. Testing the last couple days on increased volume. It’s trying really hard to get up and go here. This did provide a lot of opportunities the last couple days on some opening range moves, but we were looking at it again today. If the volume was there. It was definitely lighter today, so I didn’t really see the trade on this. Being that the market was fading out of the open and consolidating on the lows and this was moving higher, I didn’t see that we’d really see that big momentum push that we’d expect on a breakout. So I decided to sit tight.

Now for those of you that could have traded it and break below [inaudible 00:07:09], was there profit there? Sure. 2330s down to 2290s or 80s. Sure. There’s a good percentage point or more in there. But again, it’s not setting up into a big home run trade. It’s not going into a big window. If it were moving on volume, and the market was in alignment with this in the morning then this would have been a good opportunity or at least a good potential opportunity to keep an eye on for a big breakout. But it just couldn’t get the volume it needed to make that push.

Again, just a slow day. Not much to really do. It was good to not be aggressive and not even to take a trade. We’ll sit tight. Earnings will be coming up soon again and there will be some better catalyst to trade and move these stocks around. Again, I’m summertime. This is expected but just wanted to run through today’s action and talk to you a little bit about why I didn’t really see an opportunity and why it’s good not to trade when you don’t seen an opportunity because you just get caught in the chop. All right? We’ll sit tight here, and we’ll see everyone back here first thing tomorrow morning.

Hey, everyone. Thanks for watching the videos. I’ll continue to make sure that all of the watch lists, as well as the recaps are available to all of you. Make sure you subscribe to keep up-to-date on what’s hot and what’s not in the market.