Warrior Trading Blog

$SFIX A Swing and a Miss! | Mike’s Trade Recap

momentum

Hey, what’s up, everybody. Well some really good momentum in the markets today, that’s for sure. But unfortunately, I just wasn’t able to participate in the one single stock that we had been stalking all morning due to the SSR rule.

 

For those of you that are unfamiliar with that, the SSR rule is a regulation where it will not allow you to market in to a short position on the bit if a stock is down more than 10%, which means you have to get filled on an uptick. So the stocks really weak and it’s just sort of selling off really hard, you’re not going to be able to get in very easily. You have to get filled on an uptick.

I was trying to get in a rather large position this morning right out of the open and because it was so weak, it just plans right away and I just wasn’t able to get in it. I had to sit tight, definitely didn’t want to chase it, so had to practice that patience and just sit tight and see the stock continue to make the move, which it did. It put in a massive move, a lot of money to be made but that’s okay. You definitely can’t hit them all. It’s nice to see that the momentum is looking like it’s starting to return and we’re getting the resolution on these stocks with the proper technical. Let’s take a few minutes and break down what happened this morning in SFIX.

All right, good morning guys. Well I wanted to do a recap on this SFIX trade this morning and unfortunately I didn’t get filled. As you can see here I had a 5,000 share order set at 3,440 once I saw the initial reaction take place. This is just one of those situations where I tried to take a bigger block all at once and the SSR, the Short Sale Restriction on the stock prevented me from doing so. For those of you that are not familiar with the SSR, it’s simply a rule that’s put into place on stocks that are down more than 10% that prohibit short selling or marketing in on the bit. What that means is you have to actually get filled on the uptick, which means your order has to be on the offer, all right or the ask.

What happens is even though you might play some market order or a limit order like I do below the bid, it still gets placed on the actual best offer and you will not get filled unless it upticks. Now, typically in a situation like this, make it feel half or a quarter or somewhere in between and at least be able to catch a portion of the trade but unfortunately I didn’t even get filled one share or 100 shares or 500 shares. I just completely skipped over me and this definitely stings a little bit because this was an easy $10,000 trade after that fill and in just a few minutes.

It’s almost as tough to swallow as a loss being that it’s a very clear pattern here. We talked about this for several minutes this morning about how the setup was really great, technicals were good, nice window to fill and it played out really exactly as we wanted it to and unfortunately I just couldn’t be a part of it, but it happens. All right, you can’t be able, you’re not able to grab every single trade that takes place. Sometimes these things are going to happen and today is one of those days. But it’s nice to see that the setup played out. I know a lot of traders in our room were able to capitalize on this. They were able to take at least something probably smaller positions, but able to get filled and capitalized somewhat on the move which is great. But for me it’s just one of those days where I didn’t get filled.

Could I have jumped in again somewhere along the line on another entry? Yeah, I probably could have. But that was my entry, that was my first attempt. And typically if I can’t get it done in the first or second attempt, I’m going to sit tight. And this is a situation where I just didn’t want to chase this thing, because it’s volatile as it is, the entry that I wanted, didn’t get filled, so I didn’t want to get in a situation where I was trying to chase it with a sizable position like this, and then pay for that. It’s okay. Definitely having to fight a little bit of the fear of missing out, but it’s okay. It really is. I’m just glad to see that it did resolve in our direction and a bunch of our traders in our room were able to capitalize on it.

Let’s talk a little bit about the setup here. You can see big up down on this stock. Nice move here, right to a pivot around 35.5. If you look at the daily on this thing, nice technical levels, right? Very well defined. You got a pivot right in through here at 3,540. That’s where we gaping down to. The next pivot was sitting here at 3,220. Another really nice well defined pivot and then the 100 day sitting below that. Below that you have another pocket that comes down to 2,770s, which is the next major support for this, and then the 200 day starts around 27.

Those are the technicals that we had. Pretty broken down chart here right after a big strong move higher. It had sold off here a little bit, tried to push back up towards those highs and failed today again, miserably and it’s pretty broken as we see it. I liked it because we were coming down into this major pivot. We were starting to roll over right into the open here and had a very clean pocket from 3,540 down to 3,220. You can see it filled it in about 20 minutes and the trade was done, right? That’s exactly what we wanted. That was the target on the trade, that’s where profit should have been taken. And then from here on out if you have anything left, it’s just one of those situations where you can just kind of hold it and see what happens and keep your stop at a profit, stop or break-even at least and let the trade do its thing.

If we look down into a faster timeframe here I’ll show you exactly what I was looking at to try to get short on this thing and again it just kind of move so quick that didn’t want to fill me. Here is what we saw out of the open. Now, it was a little bit of a whipsaw move to get started, but that’s normal for the stock and I want to see a retest up somewhere near 3,540s or 50s into this big resistance area. Just didn’t happen. It got caught up by VWAP here. Started to fill. I actually was going to take this, but lately we haven’t been seen the momentum or continuation really work out that well. So what I was going to do is wait until it broke down below that opening range low and then put it a pivot below that.

You can see that was the right decision because if I would have gotten short here trying to anticipate the breakdown, I probably would have been stopped out backup near 35, right? Because if I’m a 5,000 share position, I can’t really let that go past me or against me a point because that would be a painful situation as well. I probably would have stopped out once it didn’t break.

But again, this is a great example as to why we’ve been waiting for those opening range levels to break and then pivot below them, right? What happened is we came back up again, we retested and once I saw this double top put in right here, where we saw this double top get put in, the first attempt higher here failed it. Tested again it failed. This is where I started to try to get short. We were trading like 3,470s or so, and when I fire a in order to the short side it goes 30 cents below the bid. All right, so my order I shot it out there at 3,470s when I press the button and you can see my order window is at 3,440. All right 3,440, so that’s 30 cents away from when I press the button, so it was at 3,470 and that means that it was trying to fill me all the way down until it hit 3440.

I essentially had a limit order out there to fill me 5,000 shares of SFIX all the way down to 3,440. But what happened here is as soon as it turned over, it pretty much just plunged right away, right to 34 bucks, really no chance for me to get filled on any uptick. This is a 15 second chart and you can see that there was virtually no uptick at this point right here and that’s when I fired the order. That’s why I didn’t get filled. If I had a smaller position, 1,000 shares or 2,000 shares or maybe did it in 500 share blocks or something, would I have a better chance of getting filled? It’s tough to say, maybe, maybe. But for me, that really wouldn’t make much sense for this trade and I was trying to get the size that I had out there and unfortunately I just didn’t get it. You can see what happened here now. This is what’s important, this what I want you guys to understand. This is what will help you identify the better trades.

Here’s where you get the retest, right? Remember when we’re talking about the opening range low. We have the opening range low right around in this area pretty much the zone. Remember I said earlier that I want to see it take out the opening range low, retest from the underside and fail, this is what happens right here. All right, very important that you understand this because this is what will give you that extra confirmation to see that trend continue and it happened right here. All right, it pulled down, came up retested, fail and that’s where you could look to get short. That’s what I was looking to happen on the open. All right.

Could have one short again right here, tried to fire another order. I sure could have, but at this point I was a little bit worried about a chase and with the size I had, I didn’t want to get whipsawed around and I just decided to sit tight and be patient on it. It did continue, very nice move very well defined, controlled move right to the support and beyond. I just want to touch on this a little bit again guys so you understand what we’re looking for, for the entries. Because the entries really everything. You could be a very good Trade Manager and understand when to get out and cut your losses. But it really all depends on the entry and you got to be able to nail that down before you do the next part of the trade, which is the management part.

I just want to make sure that this is very clear as to why I didn’t take the trade on this first breakdown, because we really didn’t have a pivot yet. And with the mark we’ve been in, I want to see more confirmation, and that’s what this is right here. We take out that pivot or that opening range low, we retest and we fail. That’s really what you should be looking for all your trades, whether it’s a long or short, you want to see those pivots confirm before you actually pull the trigger. It will save you a ton of headaches, it’ll keep you out of unnecessary losses, and it’ll give you that extra confirmation.

SFIX, really nice move. I hope some of you were take advantage of this because this is a really great momentum move that we really haven’t seen much of lately. We’re starting to see a few more of them come back now, but this one was a really, really good one and it’s nice to see that continuation after the break down.

That was SFIX, nice move there. BA, our swing trade is still really going strong here. I mean it’s just on a tear higher, breaking yesterday’s highs we’re up another seven or eight points today just a really nice move from that breakout we were talking about all that triple top and a good volume coming in the last two days and nice resolution. Even with the market sitting relatively flat. Spy sitting relatively flat. You can see just kind of chopping around, not much going on but that BA is still remaining extremely strong. Nice job to everyone who was able to take advantage of that as well. But for today guys, I’m just going to sit tight and we’ll be back at it first thing tomorrow.

Oh hey. I didn’t see you there while I was just working on the dream board for my next home run trade, hopefully it comes soon. Until then, make sure you subscribe to get email alerts anytime I go live or upload new videos. Until then, happy surfing.