Consumer Discretionary Leadership? | Technically Speaking: Trading the Trend

i want to just do a quick sound check are we good as far as sound it was actually showing on my side that we were good to go and i just want to see just real quick i'm going to start we're about two minutes in but i just want to see if we're good just want to take a look can you actually hear me can you also see me as well just want to verify all right good all right good yeah there was a two minute delay there yeah well actually probably three minutes uh but uh no worries we're gonna go ahead and actually hop right in we welcome all of you i said on my side that we are streaming on youtube and then i look over and it actually kind of reset but we're good now we're good to go now we welcome you to actually uh trading the trend weeks to months we call thursday trend thursday my name is james boyd i normally teach at this time i do post educational content there daily check it out if you're not on twitter uh we have some great content there as well now remember as we get started remember that as we talk about options remember that options are not suitable fraud best special risk trading options understand rights and obligations we're going to be using the paper money platform for educational purposes make sure you are paper trading it's a great way to learn great way to actually get practice of what you're seeing from the online course and also the webcast as well also remember as we get started remember you should review the transaction costs and other fees and consider that as a part of the investment and whether that's something you might consider and last but not least the option greeks now today what we're going to be talking about is we'll take a look at the index and the sector update we'll talk about long-term setups okay really kind of using that as the foundation where we're starting to also see some short-term bullishness as well we'll talk about income versus stock ownership with short puts okay we'll talk about trade management and your questions now as we go again i welcome your questions okay don't think that if you ask questions it's going to slow me down just know i love your questions i love to actually include those questions in with our discussion so we'd like to welcome sk el diego a moon charles robert joe goku edward and many others let's go ahead and take a look at the spx now if we take a look at let's see the spx this was our diagonal line we've kind of had drawn since monday and if you kind of take a look at this from a longer term trend perspective but we're just looking at the one year daily chart you'll say from last week to this week did the trend change and we would say no now from last week uh you know getting into let's say thursday getting into friday we did actually see a drop down to that longer term support line that diagonal line now remember that these pullbacks are a part of a trend it's almost like a checking account you put money in and then you got you got expenses it's not just additions there are subtractions but what you want over time is you really actually want that overall trend to be growing uh in other words to make higher lows and higher highs so when you actually look at the s p this would actually kind of lead us to believe if the s p is going up we know that the s p is you know 22 23 technology about another 12 13 discretionary over a third of the s p is in two sectors the tech and actually discretionaries and my goodness gracious okay something in tech must be moving something into the discrectionaries are moving remember utilities and base materials are only three percent each it's going to be hard for utilities and base materials to push the s p up if they only represent three percent each of the s p nasdaq now if you'd actually take a look at nasdaq we didn't see the nasdaq poll quite down to that 30 period moving average and you're going gonna really notice that it kind of almost it reached out and touched that 30-day not quite seeing a little push back up kind of maybe got a little maybe potential resistance maybe perhaps forming here if we were to close here this would be pretty much the highest clothes we've ever seen on the nasdaq now i can almost kind of feel some goosebumps on some investor and i i don't know if we're going to go there but you know then it's exciting to see the index actually hitting some new highs okay now if we also take a look at the dow jones that's really been the third and again i want to show this chart really not just on a daily chart but on a weekly chart we know that there's really been like a longer term ascending triangle pattern we fell down it's been surprising though that you see the dow actually come back and there is a plot drop of dow stocks that are actually quite strong we're gonna hit those in just a sec but when we look at a really a three year weekly chart and guys and gals i just want to kind of show i mean when you kind of learn about trends and technical analysis the first thing they teach you is really just on well moving average crossovers and if the short term moving average okay the blue line which would now be the 10 week moving average because we're looking at a 10 and a 30 day simple moving average but this is on a weekly chart the condition that we've actually been in is really been the blue line crossed above the red and that blue line has really been acting as far as a level support ah there's a question and the question is the following james is there any way that we can actually go back so i could have potentially considered an entry back when the moving average crossed well why didn't that investor get in maybe at that time now whether we've got it whether we got it back in june here you got in here you got in here you got in here someone got in here on any of those entries they were all risk okay so that's what you need to get comfortable with okay so that was the question okay wanted to answer that but the biggest thing is we kind of have like oh it would have been nice to buy back here but the thing is is that can there still be opportunities because there's been many opportunities along the way so the dow has actually been quite strong and if you actually look at the dow something i think is a little interesting is we're seeing the macd okay and the macd is kind of one of those uh oscillators that's uh well it's one of some technicians favorites if you actually take a look at this from a weekly chart on the right hand side that is either that's either a hanging man or for example that is a hammer now i'm not going to play that song hammer time okay but that's kind of what sometimes goes through the mind if we actually take a look at this we saw the macd was actually done a lot and then lately we're actually seeing in this case the macd is shallower or not down as far as it was before so we've got to ask that question here is the macd uh maybe showing a building up of momentum and are we gonna potentially see maybe the dow smash its way through resistance okay now that's something we want to keep watching if we continue to see these extra high lows these actually discretionary type of stocks tech utilities you name it those type of dow stocks might try to break out and this is going to be a nice segue for us if i were to ask you a question and the question is the following what dow stocks actually let's say today are showing a potential higher low what dow stops today is showing a potential 20 to 55 day high maybe like what some technicians would really call a breakout okay now stanford samson's and would have been nice to buy in 1982. that's true i was five years old okay never had that chance all right now when you look at the dow stocks i mean my goodness alive you kind of feel like you could trip on okay there was so many of them today that in the dow just kind of were like oh that's interesting now example given when you look at a couple so if we were going to look at let's say some of these dow stocks and i'll slide this up some of these stocks in the dell that were at least leading today we saw crm and some investors have been looking at crm and ray kimbrell talked about this last night as far as maybe being more of an intermediate flag and i think there's a point to that okay so let me just quickly draw this when we actually look at let's say crm someone that doesn't understand the longer term chart might say it's not that interesting but when you really kind of step back for a second and see the bigger picture you had the poll that started in march you had a rip up to about august to 284 you've been in a flag or some people call it a fleet and if you take a look at this we've saw we've seen a recent breakout on this weekly chart and we're trying to actually get a bounce now you better be looking at the bottom because we just talked about this we've actually been seeing on this weekly chart okay so it's actually gotten less bad than it actually was shallower than it was before then it was shallowest and then you're gonna see that the mackie has not gone down again think of like like a volcano okay it's building up that momentum until it pops and if you take a look at this we're kind of saying okay we've had a break out a little consolidation and what i want you to notice is it's not really pulling back to where it really broke out from leading to the idea of could there be some maybe upside potential now crm if you look at the stock on a daily chart it's deceiving and that's why i'm suggesting that a lot of people maybe on the daily chart they're deceived maybe is they're not really looking those longer term pictures of what's going on now if we look at this daily chart it looks extremely sideways and that's why maybe sometimes people miss opportunities because they're kind of on street view so to say of what the chart looks like but when we go up in the plane that three year weekly view and look down it kind of looks a little more crystal clear what a potential what the trend is now when we actually go back to this stock a lot of people talk about let's say stocks like on the week of earnings that's not necessarily how this paper money account looks at it this payment account likes to go out three to four weeks prior to earnings and then see if the stock starts to break out okay three to four weeks prior because this is when those investors might speculate now it's a bigger dollar stock so we might be thinking maybe about a vertical long call vertical short call vertical and if the investor said a probability based trade willing to accept more willing to accept less income and higher probability would they consider maybe in this case a long call vertical or a short put vertical if they wanted to see for example i'll go to CROX in just a second laura and mickey d's so if we were considering maybe a probability based trade a long call vertical or a short put vertical well let's go take a look if we're thinking more probability based okay we'd probably be thinking maybe a short put vertical now if we went out let's say 20 to 50 days to expiration with maybe a delta between 30 to 40 okay well it we might be looking at the 242 and a half okay now if we kind of widen out the spread five points wide pretty standard we'd be looking at that 242 242 and a half and the 237 and a half right click on the bid okay go to cell and then go right to vertical now what i want you to notice is if we take a look at this this does not have unlimited upside the upside on this is just a dollar forty nine now an investor might say james i see the longer term trend on the daily but what's the buy well i want to see the stock move up more okay okay okay okay well this is a public-based trade we do not need the stock to move up at all if this stock 30 days from now went nowhere nowhere you could still make the credit what's the max loss the match loss is going to be the difference in the spread okay or the spread minus that uh credit and it's 351. now if the paper money account could risk fifteen hundred dollars tell me how many positions or contracts this paper money account is going to do yeah i'm thinking about four here let's double check so if we actually do four confirm and send let's review it yeah okay so if we can actually do fifteen hundred dollars we're really actually talking about you know fourteen hundred dollars now when we actually take a look at that 596 that's for the four contracts total less than 520 because it's for four contracts we are in an ira account when you kind of take a look at the buying power effect we really see in this case that it's well fourteen hundred and four dollars so that that money is kind of being set aside okay for the potential or for this trade okay so max profit max loss there it is break even now that's what the investor wants to do gonna send that order now the one one question that kind of came up is regarding let's say strikes just real quick okay so first off when you can take a look at these different strikes uh we only tend to focus typically on the monthly options okay you're gonna see that this has kind of like the weeklies and then there's something even a little bit more awkward it said seven forward slash 100. that kind of makes you wonder if maybe crm historically bought a company and those old shares of the company that they bought had a certain conversion rate okay and if it looks weird there probably was something like a potential historical buyout where it was absorbed or bought out into the company you can call the trade desk and say i'd like to find out more but if you say i'd just rather take the standard weeklies or the monthlies and not kind of get into something that might have some more red tape on it okay all right now uh bill actually says for example short call vertical now one comment we would say to that is when we have so think of like a uh when we kind of take a look at this think of it like a triangle okay the base of the triangle is the weekly chart that is what matters the most so if we looked at this for example this chart and we said this chart is really showing the price above the 10 the moving average crossed over doing a truly a bearish trade on that type of chart on a majority basis would probably lose over time is the paper money account gonna show that yeah okay because why because we're gonna wait the weekly chart the most second tier waiting would be what's on the daily chart now the other comment came in regarding uh mickey d's now let's kind of take a look at this so if we take a look at let's say uh mickey uh let me just kind of show you this so on the left hand side i got the dow jones now when you looked at the sectors today okay and let me just back up for just a second because a lot of you are kind of saying james mcdonald's james crox james nike i'm going to take one step back okay now remember as part of the due diligence daily okay if we take a look at let's say the sector okay the ixy when we look at this sector okay now you know what's really nice about the weekly chart is it just kind of takes a lot of the static noise out okay and when you look at the weekly chart it just kind of it looks so simple doesn't it it really and it just kind of shows maybe these higher levels now sometimes people even like to change the view even a little bit more okay so in other words you can go to a style and you could change the chart type to not candle but you could also change it to maybe hop on hyphen ashi i probably said it wrong okay hakanashi but now if you actually come down this will kind of take some of the static out even more and there's a different formula of of why it looks different but boy from a trend perspective it really makes i mean i'm just going to tell you how maybe i feel it sometimes make you it makes you feel foolish of how someone wasn't in the trend at least that's how it makes me feel sometimes okay let me let me explain to you what i mean by that so what you're going to notice is we see that for example that the price runs up and then it pulls back so this little red and green candle this really represents a higher low then the stock runs up again and then it pulls back when we look at these red and green candles side by side that represents a higher low runs up again pulls back higher low runs up pulls back higher low again runs up pulls back higher low again runs up pulls back higher low again so what you've been seeing is whether we look at here here here the sector of discretionaries has been moving up now does that mean that investors are in it no people can be professional watchers okay now if we take a look at this what you're going to notice is we would ask the question like number one could an investor buy the sector that's an option could maybe an investor maybe buy some industry groups within the basket of the sector that's the second option the third option is to say what stocks drive that performance so in other words if i said you if someone were to buy the basket of discretionaries what companies really drive that basket okay can anyone actually tell me that what stocks actually are really the in the basket of the discretionaries so if i said to you companies like what so for example if you said what is discretionary you realize that uh maybe if you said what's in the basket and some of these potential uh stocks top stocks you've got to imagine that probably amazon is a big one tesla would be probably a big one home depot mickey d's nike starbucks lowe's target you name it okay these are some of the big horses in the area that really can drive performance so let's go take a look at mickey d's right now okay now if you asked me and said what was one of the biggest mistakes you actually made in your investing if you could go back to 1996 uh what was one of the biggest mistakes the biggest mistakes i think that some investors make and no one really impressed upon my mind is i underestimate the importance of the weekly charts you need to understand that institutional investors are probably not just day trading okay they're probably trying to build assets and have those assets grow over time and have a higher assets under management and maybe make potentially more fees that's what's in it for them what they're trying to do is help the client grow their accounts to meet their financial goals so they're not trying to get in and get out get in get out i mean art maybe could they be doing some of that maybe sure but they're trying to find positions sectors over time they really have longer-term growth that they can actually ride that stock and sector over time now one of those stocks actually when we look at let's say the weekly chart of mickey d's and i asked this question on twitter a little bit ago is mickey d's is it the golden arches okay or for example is it a double top trap now if we kind of take a look at this chart kind of looking from the candle you kind of see that it's sold off to the 30-week moving average and then what you're going to see is it's actually kind of pushed back up now i want to kind of go back to let's say the weekly chart the one year daily and if you zoom in okay we kind of take a look at this and zoom in here's what the chart looks like now if you kind of look at the dot that's kind of the tops one two three four we kind of have a number of touches and we're getting this is really if we close here would be the highest close we've actually had okay now the one thing i want to bring up that laura i think laura is asking and i want to kind of double check this okay so if we actually look at let's say correlation and this is looking at the correlation let's say to the s p this has really been showing if we look at let's say the correlation relative and and i i think we kind of want to look at relative strength but if we look at a correlation really to the s p it actually has a pretty high correlation so that was a question on correlation lately that stock has had a pretty high correlation to the s p 0.866 right now if we

said in this case well what's the relative strength okay let's say to the s p okay well let's take a look at it well when we actually take a look at this what you're going to really notice is the s p is the red line the green line is really the performance really of the um really the the performance of the mcdonald's so the red line is the benchmark the s p this has shown a history of underperforming now this begs the question could it maybe be something that's trying to be more in line with the index now guys and gals do not think that every stock that the investor has to buy has to be something that's performing with or outperforming it's not true okay but the idea is can it maybe make up some of that distance and perform more in line with the benchmark the other question we might ask is maybe how is this what's the relative strength of this stock compared to let's say the sector that's another question okay now if we take a look at this the paper money account is going to maybe do something a little bit more directional okay the paper money account in this case is going to kind of do something where it could try to focus on profitability maybe not as much probability but profitability potential number one it's gonna actually uh in this case it's gonna go long the call okay long the call now if you take a look at let's say the implied volatility the implied volatility is 21.5 okay so if the investor were to buy a long call with 20 and one and a half that would suggest that these long calls are probably not that expensive if that implied volatility was really about 21. the second thing we're actually going to do so number one we're going to go along the call law it's going to be positive delta and uh which is the bullish trade but that's negative theta okay now what this paper money account is going to do is it's going to right click on that ask and it's going to go where it says buy and then it's going to go right over to where it says in this case vertical now what you're now going to see in this case by vertical and now what it's going to do is it's going to go long the call yes and it's going to widen out the strike guys and gals we don't want to make this complicated it's not that complicated okay it's a simple answer if you want to buy the 237 50s and do the 240s what's going to happen well when you position size you're going to have twice as many contracts if you have twice as many contracts you have twice as much in commissions so why does the pay money count actually widen up the strikes to do less contracts and less commissions that's it that's all there is to it all right so here we go now the debit is really how much the investor is paying and really in this case how much they could potentially lose so if this stock were to cracks down to zero no more gold golden arches okay they they shut the place down stock goes to zero everything's sold off okay the stock gets crushed to zero well the most they could lose is 243.

the max profit year for the one contract is really 247. now remember if this payment account could really risk 253 per contract and it's acceptable risk is fifteen hundred dollars how many contracts would this paper money account be doing how many if it could risk fifteen hundred dollars in this 250 per contract how many would it be doing well if our math is right uh i think it's gonna be right around at least five okay at least but may he be pushing oh there it is six okay so now what we see in this case is we have a max profit 1500 max loss 1500 and how much money is being tied up whatever the investor could potentially lose and this is in an ira account now this does not have the same probabilities as the short put vertical this is more directional the other thing is it needs the stock to at least hold where it is now at least but better yet to really you know to make the maximum gain close above the 242 and a half which is not that far from where we are now now i don't want to make you wait any longer okay so some of you were talking about mickey d's some said nike some of you actually said james crocs okay i'm coming i'm coming i'm coming now one thing i want to kind of make sure that we're clear on let me kind of show you something okay so some of you if you some of you are kind of saying james where would i maybe if you weren't doing these webcasts where could i go to maybe kind of see an update of the market where could i go to maybe kind of see a maybe an update as far as sector performance and maybe what stocks could be potential full flags or bounces or potential breakouts well what i do is i on a daily basis i post educational examples some of my posts are just kind of my regular everyday life some of my posts for example are let's say uh stocks that are hitting 20 55 day highs longer term trends like microsoft today hitting a brand new high other stocks of mine i talk about for example just the tech sector in general the other thing i want to kind of bring up is also with this is just a quick comment before we move forward is yesterday i actually kicked off a lot of you might not know about this but every wednesday really at 2 p.m eastern for 90 minutes okay this is one of my posts here today it's called twitch tv by tv ameritrade okay now if you go and you can click right on this it's a 90 minute session where i talk about things like we would in the webcast but i also probably spend about half of the time just doing kind of more a question answer format well how is this different well this this twitch tv with td ameritrade is where we talk about technical analysis fundamental analysis options future forex whatever whatever goes okay it's not just on technical analysis we'll talk about things that we think is important and we do paper trades that's every wednesday kicked off yesterday okay live we also record it and i posted that recording from yesterday you don't know about that now you do okay every wednesday i'll be doing that from 2 to 3 30 eastern check that out on my twitter page now want to also go back to that second stock that was brought up regarding crocs well let's kind of let's take a look at crocs now last week i posted a picture of my feet i wore crocs outside and then i got sunburned in the holes okay and then i took my shoe off it looked like a dalmatian on my feet okay so it's kind of funny now well what it wasn't because it hurt now if you look at crocs that has actually been a stock in this case that has really had well it's been an uptrend for quite a bit now it's been talked about quite a bit okay now last march the stock was at eight dollars yeah that hurts okay now if you take a look at this that 10 period moving average has just really been the really the sub floor if you want to call it the floor of the stock and it's been tippy-toeing off that and then moving on now today's actually push was actually quite strong that was actually by the way the highest earnings per share we've actually seen in the last six six or seven quarters and by the way fundamentals matter you'll kind of see that sometimes that kind of can go almost lockstep and if you actually take a look at where it is now that stock actually went up about 12 today okay now if we take a look at this we might say i missed it i don't know did we did the investor what was actually investors willing to pay 12 higher than where it was yesterday well maybe actually there was a it was their earnings forecast right now here's the deal if i were to ask you the question what do you think the old resistance is what do you think the old resistance is okay now h8 sense is twitch available through the youtube platform they will post that recording i believe it's tomorrow morning on the trader talks channel okay uh if you went to let's say twitch.tv and you just search for td ameritrade you will see our channel every wednesday i will also post the link to where we're going to be actually going live okay now so here's the deal if we said on this chart where's the resistance well we might say in this case well i think the resistance is potentially really about 120. now after a 12

pop do you think there might be some investors that might profit take some might that be a little not unusual that if a stock goes up 10 in a day in a day there might be a little ringing of the register for some short-term investors now remember you got to think of who's really driving the stock it's a short-term investment in long-term investors i mean who's driving it right so if those longer-term investors really push that stock price up where could the potential support level be well number one it might be at the intraday low which is maybe at 125. it might be let's say in the gap the middle of maybe this gap about 122 or it might be at the resistance right about 120. now if the investor said you know what if these institutional investors pump that stock up that high in one day okay stock got pushed higher okay in one day to that magnitude there's probably a pretty good reason for that now you could we could sit here and argue all day long and say show me another example that did this okay i'll show you another example nike was in a complete downtrend nike gaps to the upside we thought it can't go any higher it looks like a hanging man right but i don't think you if you kind of said what's more important the candle or the institutional volume is that even is that a question the candle is that more important or is it the institutional money flow you answer that for yourself okay now the paper money account if we go back and say crocs if we go back and actually look at this the pay money account might say look i'm not going to buy the stock but the investors might say look i might consider the investment sales maybe selling a put they might say look the implied volatility is still at 45 percent yowie remember the higher that premium is the bigger the premium the bigger the premium the lower the break even the lower the break even the greater the probability the investor could potentially benefit but you already knew that didn't you or you still hung up on the candle type now let's talk here now that we've set the table you ready so now if we take a look at this wonder if the investors said you know what james i want to sell that 125 i think the stock could maybe even pull back a little bit okay and could sure but what if it actually pulls back to 125 remember if the investor sells the put they have an obligation to buy the stock from down to expiration at 125 but they get to get they get to keep the premium so if they get to keep the premium they're really the break-even would really be 121.70 now

if the investor clicks on that 330 again we need to think through and say okay what's the obligation well the obligation is to buy a hundred shares of stock at the 125 100 chips okay now one of the things that kind of got brought up last night in the options strategy virtual workshop is one or two people said i would never do cash secured puts because it ties up too much capital what could the investor do to tie up a lesser amount of collateral what could they do tell me what this paper money account could consider so if we actually go in and send this what you're going to notice is in an ira they're going to really want us to really tie up more capital and that buying power effect and i don't know why this is not showing but it's going to really show probably about twelve thousand dollars a buying power in other words a cash secured put yeah so all we're going to do here in this case is we're going to right click on that 125. now we know if we sell the put there is a risk and the risk is ding ding ding ding ding ding the stock could go to zero well how do we actually stop that loss how do we make it where the risk is not down to zero well we know if the investor buys a put that gives them a right okay gives them a right well where where might the investor want to buy that right now we talked about historically maybe buying a put where the delta was less than 10. something that is out of the money that doesn't cost that much because if it doesn't cost as much the investor gets to keep more of the premium now let me ask you a really hard question you want to keep more of the premium or less chase don't don't mess with me right now is that your question it's not a true question okay you want to keep more of the premium or less now option number one that has a delta 10 or less is an eight delta the second option the investor could look at in this case is the 105.

now notice if you sold the 125 and did the 105 the investor is really keeping the well more of the premium and what that does is it makes it where it enhances the rate of return so in other words when you look at the credit relative to let's say the max loss it's more attractive the risk is not down to zero the risk is really down to 105. now the investor said okay this is what i'm going to do now we're going to see that it's going to tie really up less capital okay less capital so we have a 20 wide spread which is really like a cash secured put with a built-in protected put max profit 305 max loss 1698 so in an ira account it's going to be showing how much money is being tied up 16 or let's just call it 1700 so my point of bring this up is if we kind of looked at this and said look we need to fully understand there's a potential obligation to buy the stock at 125 or in other words a 12 500 investment how much money is being tied up though well that's 1700 and compare that to the potential profit of 302. now here's what i need you to understand and why we want to make this a part of the agenda when the investor buys the stock and if they were on this stock they would have to buy the stock 100 shares at let's say 132 that would be a 13 200 investment they would need the stock to move to make money and they put 13 000 in if the stock after 30 days did not move at all how much did they make zero so they put a thirteen thousand two dollar investment in stock didn't move it off they didn't make anything but on the short vertical put they do not need the stock to move and if the stock didn't move at all they can make 300.

if we kind of took a look at this and say how much is it tying up here in this case do that's about 1700 and matter of fact the stock can even go down somewhat well actually quite a bit the stock would actually go from 132 to 121.98 anything above 121.98 it's made some potential gain now my question is to you as stock investors is what's your probability of making money as a stock investor what's your probability mike flatt used to come and say that when you're in a stock trade what's the probability 50 50. but if you actually said what's the probability of actually having the stock above 121.98 or 122.

what's the probability of actually being above 125 okay where do you have greater probabilities and that's the question to you do you want to have greater probabilities if you're saying james i'm kind of sick of having a 50 50 shot then the investor might say i might consider tax secure puts where i have a better probability of potentially trying to number one make income and then number two trying to buy the stock at a potential discount now let's go just real quick to roy roy says you could sure get assigned on something like that spring okay well ray roy what why is that any different than any cash that could put how is it any different if the investor just sold the 125 put or they did the 125 105 put how's that any different roy i don't see it's any different now remember what we always said and what's in the online course the investor would not probably sell puts unless they wanted stock ownership okay whether the investor sold the 125 or the 125 105 i don't see how you'd have any greater odds of being assigned okay you have the there's always that assignment risk the assignment is potentially that the investor could be buying the shares from now into expiration now if the investor sends that order okay there it is now i want to kind of go back to something okay when you look at this chart why did the paper money account sell the puts well because we looked at the longer term chart and we actually saw that for example it had actually been in a longer term upward trend the 10 period moving average had really acted like a level of support over time and if we kind of take a look at this is when we look at this daily chart and we said we got to ask that penetrating question why in the world would institutional investors pay 12 10 higher than where it was yesterday why now could they be full absolutely but if that stock and she went up in that magnitude these institutional investors probably did not shoot all of their capital in one shot so what i'm saying is if you go back and maybe look at a template like let's say like nike did they actually put all of their capital in one shot well that that big to the up obviously that was huge but what you really notice over time is when that stock actually went down the next day well the stock did the next egg they pushed it back up when it went down the next day what they do they pushed it back up when the stock went down way to do the next thing pushed it back up and this little bitty drop right here what they do a couple days after they pushed it right back you got to ask yourself are you really following the institutional money you sure right you really follow the institutional money if they put that much money in they might know some things of what they think that stock could be worth in the future if the company were to hit that forecast now the question really also is that is is the investor following institutional money are they really following the trend and sometimes what happens is the emotion of the investor gets involved and it robs that investor of riding the trend are they really a technician are they trading emotion okay so technical technical analysis is not the study of emotion or being emotional is taking a look at what the price and volume is giving and then trading that investing in that okay all right now if we take actually look at let's say now roy is actually saying where did you track an institutional money flow so what i'm suggesting is now if you put let's say volume on the chart so if i went to application settings and when i actually look at let's say uh you know actually let me go back so i'm gonna bring up let's say the uh equities let me bring up the volume roy what i'm actually saying is when you take a look at let's say uh and we're gonna bring back up so here's the example of let's say nike okay when that stock actually had that gap when you look at the thrust of volume who do you really think that was do you think that was maybe a wreath a group of just retail investors or do you think of that magnitude do you think it probably was majority wise institutional money flow when you take a look at let's say something like crocs now i am not i'm not diminishing the fact that it can't be a good chunk of it retail i'm not saying that because i think over time i think they've realized institutions have realized these retail investors they have money too now if you look at this what you're going to notice on crotch pump uh a push large push on the volume large push on the volume large push on the volume okay so when you see these really big pushes on the volume i'm saying that absolutely can be retail but you have to really really wonder which institutional investors plural are pushing or really pumping that volume higher now and so we're just we're throwing that out there and saying now it could it be my neighbor or my other neighbor but when you kind of think of when retail investors buy stocks let's say if they bought 100 200 300 shares of stock you would need a lot of institutions a lot of retail investors to really go to that magnitude okay so just look at regular volume okay and when you see that type of distortion boy it sure makes you wonder okay now roy says it's also the same thing on the sales yeah i think you could say that too okay but here in this case we have the price we have the price going up with that type of volume all right now i want to go back just real quick so let me just kind of uh kind of take a look at the filled orders here today so number one was um yeah so here it is mickey d's that's number one the second trade we actually talked about was really crm and the uh the other trade we actually just brought up what was that third trade that we actually just brought up well we just have crocs so those are the three trades we did now the reason why we actually brought those up is because when you look at really discretionaries that's really an area also with technology that's really showing some strength but i want to kind of maybe give a bronze medal if we can maybe also to health care health care is also one of those areas that has pushed higher dan or her dhr which is in this pay money account really has also been helping that space out as well so probably really tech does discretionaries and health care and by the way when you look at those three sectors they probably represent 45 46 of the s p and you can see that those three sectors are really dragging up the s p now i'm not really out of my time here today but i want to again i want to kind of remind you uh remember that coming up next week we kicked it off yesterday twitch okay i'll be doing a session 90 minutes now if you watch that recording from yesterday okay if you watch that recording you'll notice i spent half the time just answering questions half okay now remember what's different on that twitch versus let's say a regular webcast is we we don't have a set uh technical analysis only we talked about fundamentals we talk about options we talk about technicals okay we talk about macro okay all of it so if you say james i'd really like to have a class where we really combine these disciplines of fundamentals technical stock investing options and i can see how it all interrelates to each other there it is happy birthday to you and so that will be a class that we'll be doing from now on check it out wednesday two eastern i'll post a link every time we do it so i'm out of my time here now remember with what we discussed we've talked about it from a paper money perspective you should also be paper trading to get practice of the things you're learning about really on the webcast to really ensure that you understand it and also as you practice you're going to have some questions as you do and also as you practice you're going to really learn learn about the strategy and also how to use the thinkersim platform stay tuned for our next webcast coming up just shortly thank you so much for coming to trend thursday we would talk about trends being longer term the foundation and then really talking about some of the shorter term price movement that might be supporting the longer term trend as well thank you so much take care bye

2021-07-29 16:26

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