Mean Reversion Bounce Underway — Short Squeeze Next

On Friday Stocklabs flagged oversold for its 12 mo algo — a rare occurrence. It didn’t close there but it was there intra-day. It did however close on the 6 mo algo. We have different time frame algos that comport with different markets, all of the things you know intuitively we measure and document for posterities sake. Lo and behold — we are storming higher again and all of the feels are present. Breadth has improved from 66% to 77% since my last blog. Some of the low float stocks are gunning higher. The short squeeze plays are next.

Even still, I have been unable to snap my cold streak and now sit listlessly around the unch mark — treading carefully but placing some bold trades in some low brow stocks hoping they might ignite. All of the work you do, sifting through charts, networking, working endlessly to find the right stock, is mostly a waste of time, unless of course you’re in it for the long haul. No one could have predicted that TRCH would trade from 50 cents to $10. These moves are not normal and it’s not supposed to happen — but they do and will continue to occur as long as people feel like gambling.

Presently I am long a few low float stocks, namely BRN, PED, and VET — positioning for a move higher in crude. A move higher in crude lifts all boats and if your boat is small and light it can lift pretty high. The other side of that coin is disaster of course, your bow cracked asunder and the position destroyed. After last week’s 8% drawdown, the last thing I want is to draw down today on a +550 day in the Dow. At the moment, it appears I am unable to extricate myself from the mud — but I will continue to spin my wheels very fast until the trading stops.