Bearish Trend Examples | Technically Speaking: Trading the Trend
hello welcome to trading the trend weeks to months my name is james boyd we'd like to welcome you here today alongside with me i got my good friend michael keeley with us as well you'll see him in the chat as initials mk a fellow instructor uh you can find michael or any of us instructors on twitter we do post educational content there daily so we also like to welcome fez umass george george texas kathy dom uh sebastian mary and many others welcome to you now as we get started we talk about trading the trend weeks to months if you have questions go ahead and actually just type those in always on days or weeks where we have maybe more volatility there might be some more questions that arise we want to make sure that we really answer those questions now we know when trading the trend it's not just going to be a bullish trend sometimes the trend could be more sideways or the trend can kind of be pulling back a little bit more and we know that there's also differences between longer term trend and shorter term trend and we'll talk about that here today now just for quick as we're getting started want to uh remember that if we talk about options here today or we have questions on options remember that options are not suitable for all investors also understand that uh when we talk about examples we're going to demonstrate the function of the platform using the thinkorswim platform by td ameritrade we're going to use actual symbols they're examples they're not recommendations remember the td ameripay they do not make recommendations determine suitability of any security or strategy for individual traders any investment decision you're making yourself here to encounter solely your responsibility and also remember when we talk about investing you should review what the transaction costs are and the important factors when considering evaluating any trade and or investment now also remember the option greeks there as well now today we're going to talk kind of about where the indexes are and is there maybe a potential risk of bearish continuation we know that all stocks are not the same and definitely as we'll see in a sec all sectors are not the same but are there some examples of way maybe where the index or sectors or stocks might be kind of showing a bearish continuation trend and or pattern we'll talk about maybe some bearish stocks now this agenda here these items are really based upon some questions that have been directed towards me so i'm going to spend this session and invest it with you and answering your questions these are not the things i want to talk about per se even though i wouldn't mind of course okay but these are some questions that have been asked to me so let's address questions such as are there examples of bearish stocks okay that are maybe hitting resistance okay another question i had was wonder if you want to maybe buy a stock over time and you want to kind of do dollar cost averaging could you show us an example let's do it we also want to kind of take a look at maybe using the market watch tab underneath the quotes and really talk about here how to use scripts in terms of a bearish sense we typically always talk about them in terms of bullish but what about bearish and then as we go on each one of these items i'm going to kind of stop and see if there's any questions so let's go ahead and kick it off for trend thursday now if we take a look at the s first off the indexes and the sectors one thing i think is interesting is what in the world you actually have the nasdaq that was leading the market down it was dragging that the other indexes down and the nasdaq is positive today so so it kind of shows you that they're all not moving exactly perfectly and you're going to see that the volatility is actually slightly up now if some of you saw what i post on twitter today i woke up with a very unusual situation i couldn't find my dog jacked i was like jack jack jack jack where are you buddy went to my daughter's room and lo and behold jax was underneath the bed and he kind of went and translation was he was concerned about the volatility now he was right maybe he has some dog sense to him doesn't just have a good sense of smell but also very smart as well because the volatility has actually been a little elevated and whenever the volatility is a little elevated trends tend to be more choppy choppy is saying up and down but the higher that the volatility goes the higher that it goes the risk is that we could actually also be having a down trend in the short term or maybe even becoming intermediate to long term we'll talk about that now when we actually take a look at some sectors okay so actually just real quick so when we look at the nasdaq do we see anything turning yet very difficult that you say things are turning when the candles are still red so if this is the turn we are very very early into the turn to say the least i can't say that this is the term okay looks neutral to me and if we kind of look at those whole moving averages which kind of do a nice job for us is kind of really seeing kind of where's the dot which trend is really uh is there negative momentum and also negative trend those lines are both still red so if someone said the nasa because boss we would say not quite seeing that now if we actually take a look at the s p the s p did make a not quite a lower low okay but you're going to kind of see that they're more equal the little concern is that over time kind of if we were to take this and go like this and maybe kind of go like this this price pattern that's been really forming over time that dylan actually says [Laughter] i wish i had a video okay there was one time when the mark was down a thousand he kicked off see he's on the stairs he's looking at me saying why are you talking to me to your friends all right a little fun there now if we actually take a look at this the sp kind of has like a descending triangle and the concern is maybe in this case could the index be actually even headed even lower than it has been okay so first off what we were going to look at we said the nasdaq the asp was the weakest we would still say that okay but the other indexes the dow included has now been drugged down with some of these others okay if we were to kind of say that maybe where could the index fall we might even say could there even be further risk down to 4 200. when you look at the market whenever the prices are actually still below their moving averages it's still raining okay so that is a concern now if we were to look at let's say the dow which did get drug down with the others here today that had been the index that actually been doing a little better job as far staying above but again kind of being dropped down too we'll cover that down 323 about nine tenths of a percent russell in this case not being down as much but kind of being a little bit more neutral so if we kind of had to give the first place a second place trophy it would be the russell getting first place here today and again we're going to think that could that rotation be getting out of some of the tech stocks and rotating more to the roster that's the same okay that's that's still that same thing now sectors wise okay actually hold on interest rates still elevated we think potentially maybe is there risk of maybe even going higher well the price or the interest rate has not even pulled back yet the likelihood of the interest rate going higher and getting above about 1.54 seems extremely high and if we actually look at let's say maybe the resistance maybe about 1.7 that's not unthinkable to think those rates could actually go higher uh 30-year mortgage rates did tip over 3 but that doesn't really matter as much unless you're going to sell your house or you're looking to get a mortgage now if we take actually look at let's say some of the sectors okay when we look at let's say the technology space just as you expect nasdaq not showing a lot okay when we actually take a look at the energy space that was kind of the lone area okay outside maybe discretionaries that was really stronger it's held in there better than a lot of these others when we look at dust questionaries broke out i think was on monday and then since kind of pulled back some some stocks in there has been stronger than the sector and we would also include tesla there as well which has one foot in discretionaries okay you don't need the car but you like the car and also technology and then if we actually take a look at financials they've actually held up i mean they they're correlated back to the market not not as bad financials hanging in there staples have just been taken out to the wood chin okay just absolutely trashed to the downside lower lows lower eyes lower lows lower highs moving averages they're not red they've been on fire okay not a whole lot there in staples and if you go back and look at industrials it's not looking very healthy so we would say a lot of these charts are sideways at best many of them are fighting for their lives to even stay above support so this kind of bleeds into really maybe a a real a problem maybe are there examples of maybe stocks where these are not just short-term pullbacks that these might be maybe more intermediate and maybe the the short term is has now dominoed on the intermediate and that intermediate domino has now dominoed into potentially longer term so when we say short term we're thinking days to weeks when i say intermediate i'm thinking weeks to months when we're thinking long term we're thinking months to years okay now you are for example thinking that there could be some bearish examples out there how many of you are thinking james i'm starting to see some more bearish examples out here now i i can't help but for example i got my good friend michael keeley here and he's a you know he's a fan of fundamental analysis and there's been a very controversial stock and it's called peliton okay now we're not talking about the peliton in the tour de france we're not talking about that type of peloton even though that'd be nice to even be in the peloton period but we're talking about peloton the actual bike manufacturing company that actually does the indoor cycling it also for example has uh you know these online classes things like that now if you take a look at this let's kind of go to the three-year weekly chart and we're going to look at this as far as like a longer term trend remember when i said longer term i'm talking about months to maybe years now if we go back about the last two years this is really at the start of coding okay back in 1969 felt like 1969 did okay we're joking it's in 2020 it seems like a long time ago but it was only 20 20. it was only last year is march and that stock was at 17 the stock 10 folds is everyone all the gyms are close and all of a sudden everyone goes out and says what do you want to do well let's let's be a hamster on a wheel and spin our legs and that's which by the way is what i like to do too but on a different platform and what you're going to notice is it's gone up but you're going to notice that there's been some concern lately the stock had a high at 171 the stock actually falls down doesn't go back up to 171 only goes up to 119. 119
then becomes that area of okay and now all of a sudden we're thinking hey could that support level that it's been trying to make potentially is that maybe starting to break now what happens when you have a really good product that people like so if you have a company like peloton okay now i can't even remember what the name of the watch was finn whiz i can't remember what that i can't remember there was a watch where people would track their steps and then everyone liked it and then all of a sudden apple came out with their watch samsung came out with their watch right other companies come in and try to take some share from that dominant leading company now one of the things we would also say here is if the sales growth starts to slow or maybe even not be as high as it was before there could be further is fundamentally but also technically so my comments here are not just let's say technical nature they could also be they have increased competition if they had increased competition they might not be able to sell that bike for as much as they did before which could actually put pressure on margins and also the thing is just the company compared to itself it might have a tough time comparing itself to previous quarters as far as what their sales were now if we actually take a look at this we're going to go to so this stock has actually falling down and it's still looking pretty rough and it has an upcoming earnings right there in about 10 28 thank you so much okay fitbit seemed to be the first one to the armband as far as counting your steps and then everyone and their mother started to actually get into wearables right and all of a sudden fitbit where did they go what are they even around anymore okay i'm kind of throwing that with peloton could they face competitive pressure because they also maybe just have situations where they're not able to kind of branch out into other spaces and maybe where their bike is not the best one others kind of get in that space now let's say the investor said they want to consider a bearish trade so first off when we think of bearish trade give me an example if i were to ask you a bearish trade for you is what like what type of trade now before i actually came to the company i knew about shorting stocks that's that's something totally different i'm not gonna go there but that's what i knew okay if we said something that has defined risk and does not have unlimited upside match loss well it might be two main type of strategies maybe a long put vertical maybe a short call vertical etc those might be the first two spots where the investor gets into the option pool and doesn't feel like they're going to drown okay now what i'm going to do is i'm going to look down this on the right-hand side and say ah okay so the implied volatility is let's say 50 60 68 41. what do you notice about that implied volatility what do you notice well is it low is it maybe medium what do you notice well that those numbers are not low okay now what does that mean if the higher the analyze implied volatility is what does that tell us about the premiums higher the implied volatility right the higher the premiums now think of it like this okay imagine you got your son a brand new corvette brand new and you gave it to your son to drive what would you expect the protection for your son to be with that car right higher implied volatility but if there's a toyota corolla that was 20 years old like i give my kids toyota camry the implied volatility is probably not as high therefore the protection is not as much same idea now what we're going to do is we're going to go to the november and one of the things that's interesting is when you look at higher implied volatility the investor can maybe sell something that is further out of the money and selling further out of the money there can still be some decent premiums now if we were to go look at let's say some opt or some strikes excuse me that really aren't in between a delta 30 to 40 we could look at the 95 can i get 100 those two are kind of in that area of a starting point of maybe which to look now i'm just kind of looking at delta 30 to 40 it's the 95 and the 100 we go look at the bid and ask spread 15 cents apart 15 cents apart interesting now if the investor said they want to sell a call spread what is that well they're selling a call where they don't think the stock could actually get above that price but if they are wrong and they could be if they're wrong they're gonna buy a call above that creates the protection and or the maximum loss now here's the deal i need you to understand here okay it's not so when markets go down investors need to have a a strategy or two in which they would say if the market were to go down i know how to trade that trend now have you ever ran into people that were captain obvious where they said oh yeah the market's going down and then you asked back to them so for example so you know the trend is going down right yeah yeah i know it's going down how much money have you made in that drop well the market's going down i'm not asking you if the market's going down did you put on a trade that matched that trend so sometimes we kind of miss the point that when it's not just looking at the trends and having some ideas it's what trade did you put behind that idea so if the investor said james it's kind of this is more of a technical fundamental case here potentially and if the investor did 10 contracts let's see what this would be well what you're going to notice in this case is the max profit for 10 contracts we're not sure if it's 10 contracts and the answer is it's not going to be if we said in this case the paper money account could risk 1500 this is too much we're gonna have to probably go down to about half that maybe four of those and if we went back and said is that more than 1500 and the answer is no it's at 14.52 so in other words if this stock were to go up and even surprise this paid money account the loss would not be more than 1452.
okay now the bad part about this is the max profit is 548 dollars so if this stock were to fall all the way to zero it doesn't benefit all the way to zero there's a maximum gain built in and it's the credit per contract okay now as an instructor as a teacher or fellow investor i don't think there could be anything worse than not knowing if the market were to go flat do you have a strategy for that if the market were to go down do you have a strategy for that because what happens is you don't want to only be doing okay to good if the market was only going to go up you want to be aware of other types of strategies okay and also be aware of how to trade different types of trend now if the paid money account says okay it's going to sell this it's a call spread are there any questions on what we discussed okay trade number one is a short call spread on peloton and the idea maybe is could peloton be a little bit under pressure with some competition that might really hurt kind of their fundamental uh case and also the valuation of the company could it mean revert so when i say mean revert what i mean is sometimes when these stocks when they go up because they actually drop back down like the whole entire move never happened okay not saying that's going to happen but we're saying maybe there's some increased risk here okay now what i want to do is i want to kind of take a look at a in this case uh a second example so when we talk about a bearish example okay i'm going to pull up just give me one more now i i feel like i can have uh maybe some people be really upset when i actually show this message next example let me kind of just show you there was a stock called adobe that was doing quite well and then all of a sudden it just looked like it just roll rolled over and it's really been under pressure now i need you to understand something okay when the markets drop it's a natural reaction to say go find some stocks that have been performing poorly that's completely natural but if you really went out there and tried to do that that probably doesn't work very well okay so the stocks that for if the market's been going up and the investor picks the stocks that have been going down have those stocks been correlating a lot with the overall market in general they have do the stocks that have actually been underperforming do investors are they likely to have gains in those stocks where they haven't been really doing anything or doing well at all they're unlikely to have gains in those but the stocks that have been moving up with the market maybe even outperformed which stocks do you think investors are more likely to have profits in stocks that have gone up with the overall market and even outperformed so high correlation or stocks that have been not moving in tandem with the market stock maybe even has been going down or flat do you think investors are likely to sell those stocks no i put it yes but unlikely now if we take a look at this if if the market starts coming down the stocks where investors have gains they might be kind of thinking geez i might want to start to sell some of this trend because they have some profits the stocks that have been underperforming the market they actually kind of start to come up a little bit that's how we kind of solid energy stocks right mark was up here energy underperformed market starts to come down uncorrelated stocks actually start to go up and so my example is going to use now don't hate me for saying this okay costco now if you take actually look at costco i'm not arguing the case in terms of its fundamentals okay we know that costco has been strong and there's some people they have a costco flag in their front yard at least it seems like okay now if we take a look at this sometimes what has been good can sometimes be too good and it might not be necessarily able to continue that much good now the second type of trade that we're going to look at last example in terms of bearish is can the investor maybe try to do something that has more upside potential okay we did the short call spread first but that has a built-in maximum gain that is not as high as what we're going to show now well one of the things is when stocks start to go down people could say well i'm just going to go out and buy pets but we would push back on that and say well how many puts did you buy recently and the fact of the matter is when people have their portfolio going down or their stocks going down financially speaking their emotional state of mind is kind of beaten down right and so it's unlikely that those investors would say you know what i'm gonna do dead gummy now i got an idea i'm gonna go out and buy puts on top of everything that's been going on we would doubt that okay now we would say to those investors prove us wrong okay maybe maybe they maybe they do okay we'd like to see it though now if the investor said look they want to maybe buy put maybe they want to buy a put something that is at the money or one strike in the money okay i already see the costco flags coming up i told you you're out there okay now the investors say but yeah i just don't want to pay that whole 12.35 now remember whatever they buy to put for that stock needs to drop to break even so if the investor buys the put the break even is oh my gosh 437 because remember the investor has the right to sell the shares at 450 the right ain't free brother or sister and now what you're gonna notice is it has to go down by the premium okay so if the 450 minus that 1235 and so at expiration the stock has to be at 430 750 430 765 or lower just to break even now the lower that number is boo the lower the probability the strategy is okay now some investors say i don't want to break even that low what could they do well what they could do is they could right click on that ask price go to where it says buy go right to where it says vertical and when they do this they're buying that put but they're doing something where they're saying can something help me increase the probability of being right and at least being below break even when i have a greater chance of actually uh having a greater chance of actually getting the maximum gain or maybe near it well now what you're going to notice if the investor says i'm going to buy the 450 an example given let's say the investor says they're going to buy the 440 widen it out a little bit what could the investor lose 378 dollars by buying that put what does it do it kind of numbs that time decay it's almost like a little band-aid kind of maybe not having that time decay drip as quickly which is helpful okay because the less time decay the less the stock has to actually drop down when we go to confirm and send what's the break even now it's not 437 it's 446. the higher the break even is and if that break even is closer to the current price there's a greater probability that the investor could be right now what you're going to notice is that we were just going to look at this in terms of let's say four contacts same idea if i were to go let's say four contracts and let's verify what this risk is and i'm thinking it's going to be too much probably going to be two no we're right there so the max losses right around that 1500 now what do you notice about the max profit okay what do you notice about the maximum profit relative to the short call vertical what do you notice what do we notice it is a lot bigger than what we actually saw before with that previous example the short call vertical is a probability based training a higher probability based trade and such the max loss max gain max profit is lower this is a little bit more directional and if the investor is right on the direction okay the investor wants the stock to get at in or below 440. and if that stock is there they could actually have a maximum profit of 24.80 now here's the problem okay let's say the investment said james all my positions in my portfolio are bullish they own apple they own microsoft they own nvidia they own uh they own uh starbucks they are walmart they own costco but all of a sudden wonder if the market is not really bullish what's maybe bad about that what happens if the market is bullish then all of their positions most likely or the majority of them are starting to drop so by adding even a bearish trade or two or maybe three is not going to make the portfolio bearish but there's something that if the bear the bullish trades go down there might be something to kind of offset maybe some of those bullish trades guys that's very very important now here's the deal it goes completely counter to what people think because sometimes these stocks that have high relative strength that have had a high correlation to what the market is these sometimes can be the stocks that could go down maybe the most okay now another stock that i think actually could be at risk is i can't believe i'm saying this i mean slap my hand for saying it microsoft this is another stock where the stock went from 230 to 305 okay 230 to 305 in like three months and when investors have been buying the dips buying the dips buying the dips when this stock actually starts pulling back those investors might want to exit or get stomped out these are the ones potentially that went up a lot more and if they start to fall they could actually drop maybe on a high percentage it's like real estate okay the higher they go up doesn't mean they can't come down now let's kind of now talk about some examples of bullish now i want to kind of take a quick timeout okay let's go to station identification and let's also uh go in this case to uh questions okay uh now tmtm says this is just me the high flyer seems to go up today when others are mostly down i don't know which one high flyers you're talking about i give me a little sense tmt and which ones you mean by high flyers now uh is this uh the other comment from uh hollywood is is this the opposite of a long call vertical yeah you could say that okay so a long paul vertical debit shred debit spread meaning you gotta pay for it the opposite of that is just a long put vertical correct okay now the other thing i would really say is also the importance of knowing the verticals is when markets actually go down the volatility can be high okay michael keeley i mean he can back me up on this i remember when the vix was in 89 okay i remember when the mix was at 65 okay there's times when the when the market goes down and volatility is high buying puts could be a very very very very low probability type strategy so knowing about verticals short calls and long put verticals that's a great place to get into the option pool and really learn how to bearish swim okay because sometimes you're not going to always get trends that are going up we know that we've lived for long enough we know we don't even get tense going up now let's kind of take a look at uh a question uh now coming from meals maybe time to buy microsoft maybe good fundamentals well i want to kind of bring up this example okay so what i'm going to do is i want to look at two stocks if you don't mind and there's been a stock that has just been absolutely smashed okay and that stock is just do it no it's nike now what you're going to notice is when you look at the chart it's just been so the chart just on the right hand side looks like a torpedo down to the support level and it's not even necessarily we're still questioning if it's still finding the support now when stocks go down one of the hardest things is to be patient now how many of you would actually say being patient is very difficult in other words you like apple you like microsoft you like nike or whatever the stock is and you're saying i know what i'm looking for but i'm just not seeing it yet now i want to speak to nike and i'm going to look at maybe an example like apple or microsoft but when we actually kind of think of this the question was from someone we're going to talk about this briefly five minutes or less is dollar cost averaging now when i'm thinking about dollar cost averaging we're going to kind of use the pyramid analogy okay so when i draw this pyramid we're kind of thinking about entering and maybe when the stock has fallen down near a support level where the investor thinks there might start to become buyers now what you're going to notice is based upon this unbelievable diet it's unbelievable is the investor is only taking a small portion of actually the initial position okay so let's example say that the investor said look james i can buy 200 shares of stock that's their budget and so let's kind of think about this in terms of percentages so in that first little section let's say the investors said look i'm only going to buy 20 okay of the 200 checks okay so notice that smallest amount if the stock would even go down to let's say 140 it's gonna buy let's say 30 percent i know it's 20 plus 30 now we're at 50 of the 200 shares and then what the investor's saying look i want to make sure that if that stock goes down to the unbelievable horizontal support level where they really think it has a greater chance of bouncing they have the most amount of pow pow or some investors call powder called cap okay they might say i want to make sure that i have 50 of the 200 shares to enter okay near that longer term support such as that 130. now guys and gals when the stocks are going down everyone thinks no you just have to get in all at once okay you don't have to the investor can kind of get in a little get in a little bit more and then get him okay now some people say well james the lower it goes are they really beep beep beep backing up the truck and getting in i'm not going to reference it like that but some people will say things like they're going to back the truck up and get in what does that even mean they might be saying they're going to have a bigger position size near that area support whether someone that gets in let's say closer at the top or the middle of that channel or the bottom all of those entries have risk okay and the investor doesn't know that 130 is really going to be the floor so let's kind of show this the first is the paid money account is going to buy 40 shares then it's going to buy 60 and then 100.
let me show you how this is going to work the payment account is literally going to right click okay it's going to right click on buying some of these shares right here now right now we would actually kind of have to say that geez is there really a good time to buy the shares i mean is it setting up to be a time well the investor is kind of saying i don't know if right now is the right time i'm just going to start to build a position when does the investor get the cheapest prices when everything looks horrible okay now what you're going to notice is the investors only buying 40 shares of the 200 they're buying it pretty much at this first level support they come in go confirm and send and notice it's a small position so if that stock were to go down more okay they have some extra capital and they're trying to build a position but the first position is not that big so if it goes down further and further further directionally it's not as bad okay so here we go so next so now what you're going to notice is we're going to go down to kind of that midpoint of the channel we're going to right click right there we're going to go to actually where it says buy now once we go to buy we're going to say edit that order we're going to say that not day not day we're gonna go gtc and we're gonna say you know if you come down to the bottom that middle point of the channel it's gonna try to add a little bit more okay 60 shares of stock we said adding that 30 of 200 shares which would be 60 and now what you're going to see is it's saying buy some more shares of the stock if it goes to 139.35 now do you think investors like warren buffett some of these guys and gals out there do you think institutional investors kind of maybe building inventory and falling prices do you think they might do that or you think this is just completely random so here's the deal the paid money accounts behind 60 shares if it goes down the midpoint of the channel it's a gtc notice it does not actually have a stop because it's with the idea that when the position were to get fully entered the stop could actually be set below the bottom of that channel where's the bottom of the channel 132. it's going to right click on the 132. buy it's going to come in and it's 50 of 200 shares and now what you're going to notice is someone said well what are you doing well i'm trying to buy a stock that's been caught up in a pullback on maybe something they think has good fundamentals good long-term prospects maybe a leader in the space and the investor says i'm trying to use some of the short-term negativity okay in terms of actually getting in some quality names and they might do this on apple microsoft nvidia the key is that the investor is actually going in lighter initially adding a little bit more if it goes down and they're saving the largest chunk of that capital really than if it were to go down to the bottom now the other way you can kind of look at this as a diamond formation where the biggest chunk is in the middle because you got to understand what's the likelihood of the stock coming down to 132 where that's 50 of the position it is lower probability but we're talking about a a triangle type of dollar cost averaging confirm and send send the order so what you'll now notice is those 140 shares here 60 hundred now i cannot tell you how many times you've actually seen pullbacks and said oh my gosh i wouldn't i would have loved to get in the problem is there was never any orders to get in were there there were what happens is investors fail to have a plan okay and then the stock potentially goes back up and that whole pullback like the investor was just like an amusement park just watching something fall and they just sat there and watched it okay the biggest actually thing is does the investor really want to become okay their shareholder now again i want to kind of state this the investor needs to be forecasting that maybe mult these multiple levels of support can be a tougher area to break okay now the risk is if this stock were to break this level support 145 what's the risk the risk could actually come down to the midpoint of the channel the the other part of this in this case is if it comes down the middle is they're likely to come down the bottom yes that's why it's actually kind of sprinkling in the entry now what i need you to understand if you think about what institutional investors might do is they're probably trying to add or dollar cost average into positions when the volatility is rising because people a get stomped out of their positions and or they also have a little situation where they just kind of become nervous and they sell okay all right stella says how did i draw the pyramid okay so all i did is i just went down uh right on the drawing tools i went to the diagonal line and i just was using the diagonal line as a way to kind of draw the pyramid okay and that that way i kind of was that way you could follow along okay next question uh now so here's the deal if that stock were to buy 40 shares 60 shares it's waiting for that last position okay to fill and then the stop is really going to be below 132. if this stop was actually let's say below 132 132 97 less three percent standard stock stop loss 128.98 okay 128.98 all right now let me kind of move
into the next topic okay so remember these are all things that people have actually asked me to discuss and so we are the other thing i want to kind of touch upon here in the last five minutes is kind of talking about some market watch script review of the s p 100 and the dow in the current market it has been harder to really see stocks that have been trending in terms of just stronger trends okay now right on my twitter page okay if you scroll down one of the first things i actually post i also included bearish scripts that are added to the s p 100 now what i did is when you click on this it's going to show you this visually i think this is going to be hard for you to see as i'm kind of on my laptop and it's hard to zoom in so what i did is i actually kind of copied and pasted that now by the way remember there's a forward button right there click forward and it shows the s p 100 broke it up in half okay that way you can see it better at home i actually kind of just put it on a word so i can zoom in a little easier and i think it's easier for you to see now one thing i kind of want to show here so we're talking about the s p 100 and one thing i want you to notice is we want to look at two columns the two columns we want to look at is the 10 period moving average on the 30 period moving average and what you're going to notice is if the stock is below the 10 period moving average okay let me get a different color here if it's below the 10 period moving average we will see a red it's zero with a red background right if it's actually showing the number one with the green background it's actually saying that stock is above the 10 period moving average but ver verify so as a bullish trend investor investors are dealing with many many stocks more than not where they're below the 10 and the 30 period moving average that's that's been tough right in other words if the investor says i want to get in some stocks what they could get into based upon momentum and trend is less if we scroll down to the list of the second list okay 50 shares 50 stocks each what you're going to notice is my goodness gracious do we have more stocks above the 10 to the 30 thus represented by green or do we actually have more stocks that are below the 10 and the 30 okay now what you're going to notice is when we take a look at call hold that's a bullish bounce set up when we actually take a look at for example chd that's a bullish bounce setup cohold is closed above the high of the low day bullish bounce up close higher gap chd that's a bounce up the opposite of those two our cohold would be closed below the low of the high day i post about that earlier today on twitter talk about what it is that's called a bearish bounce and what you're going to notice is when you take a look at how many stocks in the sb 100 have examples of bearish bounces so what it's going to show is it's red with the number one because it's actually saying it could be meeting that criteria so the stock like met the stock like khc there's a lot more stocks that are showing bearers bounces down so when i say a bearish pound sometimes when the price has gone it's down the prices come up up up and all of a sudden the stock starts to move back down that's what we mean by a bearish bounce from resistance now the other thing what you'll notice is in the flag column you'll see that there's kind of a lot of these red uh kind of backgrounds where it says bear the tax again bear flags are those lower lows lower highs and the price drops down potentially are they showing those on every one of the stocks no but the investor can use those scripts as a way to kind of really gauge which ones are being more bullish or bearish if we just took a visual look and are there more stocks above the 10 and 30 versus more stock than or not clearly there's more that are down that's why we spend a little time talking about some bearish examples we also want to kind of kind of link those two together when we talk about bearish closed below the low of the high day and if you take a look at that that's the bearish version of kohl okay and it's just simple you don't need to run 22 different searches these are really this each column script each each column is really like running a search and the summation is on one page so if efficiency is kind of maybe the top of your order these are not guaranteed for accuracy but if you said hey i like that i think it's productive i think it's efficient those are some of the things i naturally look at anyway take a look at it right on top of my twitter page you actually see those scripts there listed now i'm out of my time here today but i want to kind of go back and let's kind of just sum up the market when we take a look at this if we were to let's say look at the s p uh we're you know the biggest thing that we really need to see if someone is bullish this paper money account all year long has been predominantly bullish putting on one two or three bearish trades is not going to change the bullish stance of this portfolio it's critical that these support levels in the market start to really hold and that's going to be something that we really want so keep an eye on them the investor is probably also keeping eye on let's say energy stocks some of these stocks that are outliers like we talked about yesterday like netflix etc these are going to be what we call the minority and if those stocks actually go up these minority stocks that are maybe bucking the trend of the index in the sector you don't see as many of them but if they run they could okay and you know they're also probably going up for a reason okay there might be some other fundamental underpinnings underneath that what's causing the move so i'm out of my time here today i want to thank you so much for your comments your questions and your participation i'd also like to welcome uh thank you for uh you know uh having a little fun with me with showing uh just kind of discussing my dog jax tried to also take examples or questions that i was getting and then answer them in a second that has been recorded as well if you say james i don't have those scripts you can feel free to go to my twitter page right at the very top you'll actually see any of those scripts if you said i'm interested in some of those you can go right to the top and if you go look at that right here the first thing at the top you'll actually see this there's a reference there of scripts that you can grab so take a look at those now remember with what we discussed here today okay we talked about we demonstrated the function platform we needed to use actual symbols we did again stay tuned for our next webcast coming up right at the top of the hour i wish you a great thursday i will be on twitter throughout the day and tomorrow
2021-10-01 22:14
