Feeling Vulnerable

This morning I made an effort to book some gains, to pay down and book a few losses, and scratched out of a position to get smaller quickly. The comments out of the Fed today are very odd, and very timely considering what we’ve discussed during After Hours with Option Addict.

“This genre of stock is very vulnerable right now.” All stocks following sentiment cycle, WHICH HAPPEN TO INCLUDE SOCIAL MEDIA, BIOTECH, and SMALL CAPS, are vulnerable to fast moves here. How you view this message will help you immensely in the coming weeks.

To this point, I see only a handful of growth stocks (Yellen candidates) at the lower end of their multi-day ranges. All of them being supported and defended. Forget the broad market for a minute. Should they lose their ground, start to worry.

OA

I spent a considerable amount of time last week trying to explain what I refer to as a “fat pitch” in the market. Every year, you get maybe a half dozen great opportunities to make way into a market. These fat pitches serve as great entry points that don;t generate much in terms of portfolio heat, and will usually start our cycle of risk over again. I spent the entire month of May talking this out day by day until our first fat pitch of the year was thrown. The bulk of our members took a swing, and have corrected their mistakes from earlier in the year, in a short space of time.

Here we are again. We faced the second big pitch of the year last week, and already starting round two of portfolio melt-up mode.

My single best piece of advice right now is to focus on managing your July positions. You get gains, take them. You get to breakeven on something and still like it? Roll out. At the same time, continue to trade around this task by taking advantage of the great entry points we discussed in “risk stocks” through longer dated (minimum August) positions.

On the day I picked up DDD calls and JRJC shares.

More later…

OA

Weekly calls helped set the weekend off on the right foot. These calls that were bought earlier this week under $2, are now trading at $18.

As a reminder, I will post a video in place of my appearance on After Hours with Option Addict this evening. Those that could attend stopped by for a market hours webinar this afternoon.

Keep focused on that watchlist I posted yesterday, as it will be our focus on Monday.

Also, I am going into PCLN July calls here into the close.

Enjoy the weekend, holler at me if you are in Vegas.

OA

Please login to the After Hours with Option Addict site for details on how to login to an earlier than usual session. Today we’ll be discussing the market in real time, as opposed to After Hours. I have an internet tech coming after the bell to fix last nights issues. If you cannot attend, I will have a recording up after the market close.

See you there.

OA

Many of you might relate to this, and what it suggests your struggles might be pertaining to trading.

I’ve spent the morning looking for a particular set-up. Many growth names have been following our sentiment chart to perfection this year, and many stocks seem to be in an aversion phase. See chart below…

As you can see, this type of a move usually offers fast results. For traders that find themselves under positioned in these names at their current discounted prices, it doesn’t take much to get them in a position to chase performance. As noted, there are a number of stocks in this position this week that are leaving long tails over the last few days. Take a look…

Here’s my buy list.

OA