Warrior Trading Blog

One Trade +$522 | Ross’ Trade Recap


What’s up everyone. All right, so here we are, Thursday morning, I’m going to finish the day up $522. One trade only one trade today. So hey, 100% accuracy, there’s always a silver lining, but this is sort of the third day of slow momentum. Tuesday I was red, yesterday was basically break even $142 and now today 522 is you know, $500 a day is not bad. That’s $100,000 a year. But when my daily goal is 2000, a $500 day feels very small. And $140 day yesterday also felt very small.

So it tells me that right now we’re seeing a little bit more choppiness in the market and I knew that coming into today and that’s why I basically said trade the best, leave the rest. I’m not gonna overstay my welcome. I’m not going to be overly aggressive, I’m going to be more conservative. And that was definitely the right move. During the recap I’m going talk about how multiple secondary offerings this week probably are putting a little bit of a damper on momentum. But once we get to the other side of it, I’m sure that we’ll see stocks picking back up and we’ll see as some great opportunities again.

So anyways, enjoy the recap as always. Questions, comments, leave them below and we’ll see you guys first thing tomorrow morning.

All right, everyone. So we’re going to do our midday market recap. You know, today was a bit of a slow day, but one trade, a green trade, $522.60. I had to wait until almost 10:30 this morning before I found that one opportunity and that’ll do it. So trade the best, leave the rest. Today was the day where I just didn’t see a lot that looked good. I hesitated on a couple of other opportunities because I wasn’t totally confident and that ended up being the right move. And you know, this just happens to be a period where we’re seeing a little bit of a slow, kind of slow patch. What’s really interesting is that this week we’ve seen a lot of secondary offerings. And so for those of you who aren’t familiar, when a company does its initial public offering, its IPO, they sell shares out in the market.

So let’s say they do a 10 million share IPO. Well from that point forward there’s 10 million shares available to trade. That’s the supply level. That’s called the float. Well, at any time the company can do one of a few things. They can do a secondary offering where they sell more shares onto the market to raise more money. Now they can also do a share buyback where they buy back shares they already sold. That usually increases the value of the stock because it limits the quantity, and of course they can do splits. And so splits change the number of shares available. But what we’ve seen quite a bit this week, and what we often see with small cap, lower price stocks are these secondary offerings. So they sell more shares onto the market to raise money. And here is MYND. We traded this one today as it was hitting the high day momentum scanner.

So the scanner being kind of the secret weapon that helped us find the momentum. So MYND starts squeezing up right here and I jumped in it at a $1.39, $1.40. I added at $1.47 and it ended up hitting a high of a $1.55. I sold at 54.51 and then I sold the rest as it came back down. But what’s interesting about this is that there was a headline this morning that they had announced a $2.8 million registered direct offering. So they sold shares, looks like 2,700,000 worth about $2.8 million. So it’s about a #1.02 per share. So the problem with secondary offering is that they’re usually selling these shares below current market value. So think about that. If you had an opportunity to buy a million shares of this stock at a dollar when it’s currently trading at a dollar, you know, it’s been trading at a $1.10. $1.40, $1.50, that’s a good deal. Especially if you believe the company’s going to go back up, sell it at a $1.30, well probably hold it till $2 or maybe more. You’ll make a million bucks.

So, that’s kind of what we ended up seeing. And of course now you’ve got people that own the stock and some of them at some point in the future may end up deciding to sell that stock back onto the market. And so that can create an imbalance to the sell side. So MYND, despite the secondary offering, ended up actually moving up because the secondary offering was kind of basically right at the closed price of yesterday. Now let’s look at OBLN. OBLN had a secondary offering this morning. Okay, so the stock yesterday made this just crazy move. I mean, super wild, super volatile. It pops up, 150%, it drops down, drops down and squeezes up and then comes all the way back down and then squeezes all the way back up to a $1.60 premarket, it goes up to a $1.80 and then premarket at what time was it? Let’s see, it was right at 8:20 AM, the stock is halted and news comes out here at 8:30 of a $3 million registered direct offering. So they sold 5 million shares onto the open market at an offering price of 60 cents per share.

And so what does that mean when the stock is currently trading at a $1.50? Well it means that the people that someone just bought 5 million shares at 60 cents and what typically happens is the stock comes right back down to that level. And so here you go, there’s a 50% drop premarket, stock resumes trading and is at 65 cents. Now it did bounce off that level up to 94 cents, which is a 50% bounce off the lows. But I didn’t take that trade. So that was OBLN’s secondary offering.

Let’s look earlier in the week. ONCS. ONCS also had a secondary offering, and look at this. This stock drops down. Where was this? Expects $11 million from public offering. I don’t remember, the exercise price of $3.45. Oh no, sorry. The combined price of 3.15, the warrants have an exercise price at 3.45 and so the stock went from 4.50. The next day it’s back down at $2.79.

Let’s look at CANF, another one this week. CANF I mean brutal. This was gapping up, squeezing higher, moved up to $8. This one I did really well and made $7,000 on Monday. This is a good reason not to hold these stocks overnight. Afternoon, all of a sudden at two o’clock, stock drops, gets halted. News comes out secondary offering. It goes from $7 down to $3. So you know, this is one of those things that when you see a series of stocks or companies that do these secondary offerings, sometimes when they happen in the middle of the day, when it happens premarket, the fact that it’s happening at all is going to make traders a little cautious.

It’s making me a little cautious because I’m thinking, well geez, this is the, we’ve seen like four or five secondary offerings this week. I’ve gotta be careful that I’m not holding a stock into an offering obviously, which is fine because I wouldn’t be holding in the afternoon anyways. And I don’t trade premarket. And it’s very uncommon that we see the offerings in the first 30 minutes of the day. Knock on wood, I don’t know that I’ve actually ever seen that. So I’m reducing my risk there. But the other downside is that a stock, like CANF in a hot market, well this might’ve held up here and then on the second day squeezes through 9, 10 goes up to 11, 12, 13, 14 so it could have given us two days of momentum. Same with ONCS. ONCS could’ve given us multiple days of momentum. OBLN could’ve given us multiple days of momentum, but instead, because of the secondary offering, it crushes that momentum.

And so it’s really important to know when to put the pedal to the metal and when to be a little bit more conservative. And right now is the time to be more conservative, to be more selective, to try to avoid having losses, to certainly avoid overtrading during times a day where the volatility could be unpredictable or where news could potentially come out. And so, today’s a day where I was pretty picky about what I was willing to trade, but I found my way to $522 of profit on a trade right off the high day momentum scanner. Seeing that the secondary offering was already in, I wasn’t worried about a second one happening today, although I was concerned that the 200 moving average was going to be an issue for upside momentum and it seems that it was.

So, this is one of those kind of things where when you deal with sort of choppy markets like this, it really helps to be trading with someone that’s been doing this for a long time, that can help you have that voice of reason that this isn’t the time to be aggressive or these types of stocks are going to be particularly difficult. Or the fact that we’ve had five secondary offerings this week is going to weigh on momentum because we’re not going to have second day continuation and we’re not going to have as much of those really big parabolic moves. So, it’s just something to be mindful of.

Again, I would’ve loved to have been able to be more aggressive today. I’m still bummed out that I had the red day on Tuesday, but got back into the green yesterday and a second green day today is good. Even if these are small green days, green is good, that’s what it’s all about. So progress is being made and hopefully we can finish off the week tomorrow with, another green day, some more profit and I’m not sure that I’m going to get back the 4,700 that I lost on Tuesday. I really haven’t put much of a dent in that, but you know what, I’m still up well over $50,000 on the month and we have one, two, three, four, five days left in the month.

So with my $2,000 daily average, I should be able to get another $10,000 of profit out of the month of May, get myself up towards 60, 65,000. I’d have to pull up my lightspeed to see exactly where I’m at. But in any case, this will still be a good month. It’s not going to be $100,000 a month unless we see something insane happen next week, which you never know. The market is sometimes surprising us, but probably finish the month somewhere around 65,000 and I’m okay with that. That’ll be a terrific month and I just have to be grateful for the fact that we can all sit here in front of our computers from all over the world and access the market, make a little bit of money each day without having to clock into a traditional 9 to 5 job. I mean it’s really a blessing. So some days are more exciting than others, but every day is a learning opportunity.

All right, so yep, reminder, everyone market’s closed on Monday for Memorial Day, also we’ve got our Memorial Day sales that started last night actually. So the Memorial Day sale is running and you guys can see on the website, anyone on YouTube and Facebook, of course. I believe that coupon code is 30 Warrior. Yeah, 30 Warrior. That’ll give you 30% off statewide. 30% off a month of the chat room, 30% off the annual chat room, 30% off the Warrior Starter Class or the Warrior Pro Class or the Trading Simulator. All right, I really encourage you guys who have been kind of sitting on the fence on the sidelines thinking about getting into it or you’re just in chat room. You’re thinking about upgrading and getting into your education, getting into the classes to do it. It’s really a great time to start studying the market through the summer is often a little bit slower, which makes it a really good time to be trading in the simulator and getting yourself in really good shape for when things start to pick up coming in the fall.

Not that money can’t be made in the summer. I had a summer when was it? Was actually the best summer that I ever had. I had about $95,000 over the course of the three months, June, July and August and there was an article on the Huffington Post about my trading during that hot streak. So summers can be great, summers can be slow. It’s not a matter of the time of year really as much as it is a matter of what’s going on with the small cap market. Are we seeing momentum stocks, are we seeing parabolic stocks or are things kind of slow?

Inner circle at right now is full. So we’ve got the inner circle programs for students that want to work and have a one on one sessions with me. I do the one on one sessions in the afternoons but there’s only one of me. So we are booked right now. We’re full on enrollment and yeah, so that’ll be probably the case for the rest of this year. I don’t think anyone else who will be able to join the inner circle until 2020.

So anyways, that’s about it for me here. I will see you guys first thing tomorrow morning. Hopefully we have some good stocks on the scanners and be able to make a little money and finish this week feeling good and then go into the long weekend just on a good note. So that’s the game plan. I’ll see you guys first thing tomorrow morning. Bye everyone.

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