Trader’s Digest: The 10 Stories We’re Reading Right Now
Wonder what traders are talking about today?We’re here with the top 10 stories we’re sharing with colleagues today, covering topics like:How you can use the 8 & 21 day moving averages to judge the market trendBitcoin’s latest adventure above $12,000+What the suddenly-shaky Nasdaq is signaling to youAnd more!So check out these links right now and get up to speed: 1) Scott Redler’s Moving Average Breakdown (T3 Live)Learn how Scott Redler uses the 8 & 21 day moving averages to understand the market trend, and guide his trading approach. Read the Article -> 2) Bitcoin breaks above $12,000 for the first time (CNBC)Bitcoin broke above the $12,000 mark Wednesday morning Asia-time, as the cryptocurrency continued its march higher.The digital currency quickly leaped further. Read the Article -> 3) A $60 Billion Scramble Awaits ETFs in Google, Facebook Reshuffle (Bloomberg)A planned overhaul of how industries are defined by two of the world’s biggest index providers may prompt money flows in and out of 26 exchange-traded funds with assets exceeding $60 billion. Read the Article -> 4) This VIX Signal Has Happened Just One Other Time (Schaeffer’s Research)Something strange happened last week as the S&P 500 Index (SPX) gained over 1.5%. The CBOE Volatility Index (VIX) spiked 18%. It’s strange because those two indexes typically move in opposite directions. Read the Article -> 5) Jeff Cooper: The Nasdaq Got Punched in the Face. So What’s the Plan Now? (T3 Live)Stocks gapped higher on Monday’s open on what felt like the 40th rally on the tax deal.The gap was accompanied by strong breadth which waned quickly. Read the Article -> 6) BofA: “In Every Market Shock Since 2013 Central Banks Have Stepped In To Protect Markets” (Zero Hedge)There is a reason why those calling for a crash, or even a market correction in the past decade, have been carted out feet first: central banks, and noweher was this more obvious than the shocking aftermath of Brexit. The UK’s Brexit vote (Jun-16) marked the point when the buy-the-dip trade became a self-fulfilling put, according to a new analysis by Bank of America. Read the Article -> 7) Here’s how Uncle Sam could snuff out a Santa rally in stocks (MarketWatch)From the Captain Obvious camp comes this observation: There are two things likely to happen by year’s end — the market heads for a big shakeout, or the traditional final flurry of buying pushes stocks to new highs. Read the Article -> 8) China’s phone market is now dominated by five companies, none of which is SamsungChina is the most unique smartphone market in the world: a phone maker can be a global sales leader without ever treading beyond Chinese borders, and small upstart challengers can suddenly explode in popularity from out of nowhere. Read the Article -> 9) ‘Swiss-made’ label lacks precision for watch industry (Reuters)If you buy a “Swiss-made” watch thinking it’s almost entirely produced in Switzerland, you might be mistaken. Read the Article -> 10) Interview with James Bianco, President of Bianco Research (Technical Analysis Radio)In this interview, you’ll learn about James’ approach to interest rate and intermarket analysis, as well as Bitcoin, sentiment, and market indicators. Read the Article ->
Continue Reading -->Secrets of Trend Analysis: The Power of the 8 & 21 Day Moving Averages
Moving averages are one of my most important trading tools. They help me figure out:1) Whether I want to be in a Portfolio Approach or Tactical Approach2) Which stocks I want to be long or short3) The strength of the current market trend In fact, if I was a beginning trader looking to build my net worth, moving averages would be my #1 focus. In this lesson, you’re going to see the power of judging stocks and the market using the 8 & 21 day moving averages. First, let’s run through the basics so we’re on the same page.What Is a Moving Average?A moving average is a stock’s average price over a certain time period. We’re going to focus on the daily time frame this article. A daily moving average is the average of a stock’s daily closing price. For example, the 50 day moving average is a stock’s average closing price for the last 50 days. Every day, the newest closing price in the moving averages replaces the oldest, which is why we call it ‘moving’ — it’s changing every day. Here’s a simple chart of Apple (AAPL) with its 50 day moving average. Simple vs. Exponential Moving AveragesThere are 2 types of moving averages — simple and exponential. A simple moving average is a straight average of the stock price. An exponential moving average gives recent prices a bigger weight, so it does a better job of measuring recent momentum. Going forward in this article, we will only use exponential moving averages.The 8 day moving average will be shown in magenta.And the 21 day moving average will be in red.The Power of the 8 & 21 Day Moving AveragesTraders often ask me why I talk about the 8 & 21 day moving averages so much. Whether you see me on CNBC, Twitter, or the Virtual Trading Floor®, odds are you’ll see me talking about them. It’s because these moving averages are the most accurate short-term road map I’ve found. The 8 & 21 day moving averages are the most accurate short-term road map you can find – @reddogt3 Click to Tweet This Tip from Scott Redler! A Chart’s Worth a Thousand WordsLet’s rewind the clock back to the Brexit in June 2016. The day before the Brexit vote, the SPY hit $210.87. And the day after the ‘shocking’ vote, it hit $188.65.If you were focused on the headlines, you were feeling pretty scared:A Statement of StrengthBut let’s extend the chart to see what actually happened. As you can see, SPY started bouncing, and on June 30, 2016, it reclaimed the 8 & 21 day moving averages:That’s a statement of strength. Why? Because it meant momentum was shifting back to the upside. And in this case, SPY briefly retested the 8 & 21 day moving averages before rallying above $219:Price Action vs. OpinionsEveryone had an opinion over what the Brexit would mean. But as you just saw in the charts, our opinions didn’t matter as much as the market’s. When SPY reclaimed the 8 & 21 day moving averages with authority, it screamed that the bulls were retaking control. And that’s an important lesson for you: when a stock/index/ETF reclaims the 8 & 21 day moving averages with authority, PAY ATTENTION! When a stock reclaims the 8 & 21 day MA’s with authority, PAY ATTENTION! – @reddogt3 Click to Tweet This Tip from Scott Redler! How I Use the 8 & 21 Day Moving Averages to Manage Market ExposureYou just saw how a big break above the 8 & 21 day moving averages can mean a big move higher. Now let me show you how I use the 8 & 21 day moving averages to get less aggressive, or even bearish. I have two primary approaches to the market: a Portfolio Approach and a Tactical Approach When the SPY is trending above the 8 & 21 day moving averages, I am in a Portfolio Approach. I’ll usually have 4-12 long positions in stocks showing relative strength, and occasionally even more. When the SPY breaks the 8 & 21 day moving averages, I get in a Tactical Approach. I start taking profits, especially with weaker names, and I may even put on SPY or IWM hedges. Portfolio Approach SPY above the 8 & 21 day Long w/ 4-12 positions on No hedge unless we get extendedTactical Approach SPY breaks the 8 & 21 day Start taking profits Hedge with SPY/IWM shortPop Quiz!Here’s a chart of the SPY with its 8 & 21 day moving averages:As you can see, it reclaimed the 8 & 21 day moving averages with force. After that happened, would it be better to be long multiple stocks? Or short the market? Click here for the answer! Long!! It would be better to be long, because the SPY made an aggressive move above the 8 & 21 day. That’s a sign the bulls were retaking control. And as you can see a huge rally ensued! P.S. That was the post-election rally, when the market skyrocketed after some initial volatility. Like the Brexit, the post-election headlines were scary… but the price action was awfully bullish. A Final Tip on Stock SelectionYou’ve already learned how to use the 8 & 21 day moving averages to detect a change in trend, and how to use them for portfolio adjustments. I’m going to give you a final lesson in handling momentum stocks… specifically, how not to get run over by one! If you take one lesson away from this article, it’s this: NEVER short a stock that shows momentum above the 8 & 21 day moving averages. NEVER short a stock that shows momentum above the 8 & 21 day moving averages – @reddogt3 Click to Tweet This Tip from Scott Redler! This is most true with controversial momentum names. Take Tesla (TSLA). In late 2016, the headlines were pretty rough:But as you know, the price action is more important than the headlines. Tesla reclaimed the 8 & 21 day moving averages, and rode the 8 day up from $190 to $287+.No matter what the headlines and fundamentals are saying, you never want to short stocks like this. I’ve seen a lot of traders fall in love
Continue Reading -->99 of the Best Trading and Investing Quotes Ever Said
A good one-liner will never make you money in trading. But quotes can help you understand the mindsets of traders and investors that are more successful than you. That’s why we’ve put together 99 of the best trading and investing quotes ever said, from 99 different market experts. We kick it off with Warren Buffet… …and we’ll end it with a downright chilling remark from Bernie Madoff at #99. Can you make it all the way down that far?1) The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.-Warren Buffett 2) If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.-Bernard Baruch 3) I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.-Jesse Livermore 4) Traders need a daily routine that they love. If you don’t love it, you’re not gonna do it.-Scott Redler, Chief Strategic Officer of T3 Live 5) Our main job is to know when to embrace risk, and when to hold back.-David Prince of T3’s Inner Circle 6) You don’t make money by trading, you make it by sitting. It takes patience to wait for the trade to develop, for the opportunity to present itself. Let the market come to you, instead of chasing the market. Chart patterns are very accurate. They have proven their accuracy and predictability time and time again, but you have to wait for them to develop.-Fred McAllen 7) Are you willing to lose money on a trade? If not, then don’t take it. You can only win if you’re not afraid to lose. And you can only do that if you truly accept the risks in front of you.-Sami Abusaad, Head of Strategic Day Trader and Strategic Swing trader 8) We don’t care about “why.” Real traders only have the time and interest to care about “what” and “when” and “if” and “then.” “Why” is for pretenders.-JC Parets, Founder of All Star Charts and Eagle Bay Capital 9) The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.-Paul Tudor Jones 10) “The biggest risk of all is not taking one.” -Mellody Hobson 11) Trading is not for the dabblers, the dreamers, or the desperate. It requires, above all, one steadfast trait – dedication. So if you are going to trade, trade like you mean it!-Rod Casilli 12) Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.-Albert Einstein, Theoretical Physicist & Nobel Prize Winner 13) The most important 4 words to a trader are “IS IT F*CKING MOVING?”-JR Romero, T3 Live Momentum Express VTF® Leader 14) You learn in this business… if you want a friend, get a dog.-Carl Icahn 15) If most traders would learn to sit on their hands 50 percent of the time, they would make a lot more money.-Bill Lipschutz 16) The four most dangerous words in investing are: ‘this time it’s different.’-Sir John Templeton 17) The most important three words in investing is: “I don’t know.” If someone doesn’t say that to you then they are lying.-James Altucher 18) I always define my risk, and I don’t have to worry about it. I walk into the pit every day with a clean slate, so that I can take advantage of what is going on.-Tony Saliba 19) A risk-reward ratio is important, but so is an aggravation-satisfaction ratio.-Muriel Siebert 20) When you genuinely accept the risks, you will be at peace with any outcome.-Mark Douglas, Author of “Trading in the Zone” 21) Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.-George Soros 22) People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game.-Peter Lynch 23) The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.-William J. O’Neil 24) I think to be in the upper echelon of successful traders requires an innate skill, a gift. It`s just like being a great violinist. But to be a competent trader and make money is a skill you can learn.-Michael Marcus 25) Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.-Bruce Kovner 26) Price lies all the time. Facebook can be valued at $40 billion and then $20 billion and then $200 billion inside of a four-year period of time. Which of these prices is the truth? None of them. But all of them were momentarily true, until they were rendered a lie, and a new truth was forged in the fires of the marketplace. Sunrise, sunset. Prices change and, with them, the truth itself.-Josh Brown 27) Markets can remain irrational longer than you can remain solvent.-John Maynard Keynes 28) In trading you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.-Ray Dalio 29) A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business.-Van
Continue Reading -->Traders Don’t Have the Tax Bill Blues… Yet
Two weeks ago, I said “volatility is finally picking up!” Just like we’ve seen throughout 2017, like clockwork, the bulls came back in to push all indices up to fresh record highs. On Thursday, the S&P 500 set a new all-time high at 2657.54, with the Dow Jones Industrial Average crossing over 24,000 for the first time ever. Traders have been buying because they expect a tax reform bill. But on Thursday evening, the GOP push hit a wall as some lawmakers objected to the bill because of concerns over the Federal deficit. That sent futures down Friday morning, so let’s see how traders are feeling in the face of sudden uncertainty. (click here for a primer on the sentiment indicators below) 1) VIX Spread – Bullish Yesterday, I pointed out that the VIX was surprisingly strong despite an impressive stock rally. This morning, the VIX is up 2.1% at 11.52, giving us a 3-month spread at 3.33, indicating traders are bullish. But keep an eye on the VIX. It’s been up for 5 of the past 6 days, and if equity markets weaken, it could spike. This gives us a 3-month spread of about +3.95, which means traders are very bullish. (click here for a primer on the VIX spread) 2) CNN Fear & Greed Index – Neutral The Fear & Greed Index is 73, up substantially from 54 last week. This index operates on a 0-100 scale, so a reading of 73 qualifies as moderately greedy. 3) AAII Sentiment – Neutral The latest AAII Sentiment Survey shows that 35.9% of individual investors are bullish. This is flat from last week’s 35.5% reading, but it’s still way off the 45.1% level from three weeks ago, which itself was the highest since since January 5, 2017. The long-term average is 38.5%, so a reading of 35.9% is basically neutral. 4) CBOE Equity Put-Call – Bullish The CBOE Equity-Put Call ratio was at 0.55 on Thursday, which is well below the 0.655 long-term average. The 10-day moving average is 0.574, which is very, very low. In fact, it’s the lowest 10-day moving average since December 16, 2016. And the 3-day moving average, which I use to measure short-term bullishness, is 0.590. That’s the lowest since December 21, 2016. These numbers point to aggressive bullishness. Conclusion Out of 4 sentiment indicators, we have: 3 bullish (up from 2 last week) 1 neutral (down from 2 last week) 0 bearish (flat from last we) The permabears are still saying that everone’s all-in bullish and 100% complacent… and they’re right. However, keep in mind that sentiment was even more positive back on October 6 when I declared: Let’s not mince words: the bulls are clearly insane. They think they’re destined to ride into the sunset on a magic carpet made of cold hard cash. Of course, I hedged myself by adding that “the bulls may be insane… but they may also be right.” And they were right! All the indices have hit multiple record highs since then, while the bears are still on the floor crying. But maybe things are changing. Tax reform is now a mystery and the VIX may be on an upswing. If the bulls rush to the exits, they may face some trouble — there’s an awful lot of them, and only so many can fit through the door at once…
Continue Reading -->T3’s Top 10: Our Most Popular Articles for November 2017
What’s popular with the thousands of traders that make up the T3 Live community? You’re about to find out with our top 10 articles for November 2017, ranked by visits to our website. You can get a look at a top trader’s account statements showing $78K+ in profits from 4 weeks of trading, watch Scott Redler’s best-ever webinar, and even learn to game plan like a top trader. We’ll start with number 10 and work our way down to number 1: 10) $78,059.89 in 4 Weeks of Trading Earnings Sami’s no one hit wonder. Watch this video and you’ll see Sami’s actual account statements that show $78,059.89 in net profits since October 16. 9) You Just Lost $5,000 Trading. What Do You Do Next? How can you recover after a losing day? What do you do when you’re frustrated and angry because you know you could have done better? 8) How Implied Volatility Works In our introduction to options trading, we discussed some basics of options, like the differences between calls and puts, how options contracts work, and why options is a zero sum game. Now we’re going to dig into the single most important options pricing concept: implied volatility. 7) 6 Tips for Picking the Right Stocks for Day Trading You can spend years learning about moving averages, gaps, trendlines, and indicators. But if you’re day trading the wrong stocks, you’re setting yourself up for failure. 6) Black Room Game Planning with Sami Abusaad Ever want a look at a top pro trader’s watchlist? This is your chance to get the inside scoop on Sami’s top trades. 5) Video | Knowing Exactly When to Trade Rob explains how to get that feeling of conviction by knowing exactly when you should be in a trade, and WHY. Enjoy today’s 9 minute training video. 4) Sami Abusaad: $12K+ in Profit in 1 Day with Nautilus Nightly Game Plan Moderator Sami Abusaad takes you through an Earnings Play in fitness equipment company Nautilus (NLS). In total, Sami earned $12,115.50 in this one-day trade! 3) Trading Scans | The Foundation for Winning Trades In this special video, you’ll learn how using trading scans can unlock highly profitable opportunities. You’ll learn how to spot potential capitulations at the end of a momentum trade, plus explosions to new trends. 2) 6 Tips for Picking the Right Stocks for Day Trading If you ever find yourself asking yourself “what should I trade now,” then this article is for you. We’ve put together a list of 6 simple, effective tips for picking the right stocks for day trading. 1) Scott Redler Talks the Red Dog Reversal, H-Sell Setup, ROKU, and MORE! In this special live training webinar hosted by TradeStation, T3 Live Chief Strategic Officer Scott Redler breaks down his 2 favorite trading strategies: the Red Dog Reversal, and the H-Sell Setup.
Continue Reading -->Black Room – Profitably Trading Unexpected Gaps
Black Room Lessons Profitably Trading Unexpected Gaps Sami shows you how to spot the most profitable gap plays.>> CLICK HERE TO JOIN SAMI IN THE BLACK ROOM <<.
Continue Reading -->Trader’s Digest: The 10 Stories We’re Reading Right Now
Wonder what traders are talking about today?We’re here with the top 10 stories we’re sharing with colleagues today, covering topics like:Why a top strategist thinks Bitcoin can hit $100K+How a expert trader builds his afternoon watch listFinding high-probability trades midday when the market is selling offAnd more!So check out these links right now and get up to speed:1) Bitcoin is ‘digital gold’ for millennials and could reach the ‘$100,000 range,’ says strategist Tom Lee (CNBC) Bitcoin is essentially “digital gold” for millennials, and the cryptocurrency could easily achieve the $100,000 range, Wall Street strategist Tom Lee told CNBC on Wednesday. The digital currency surpassed $10,000 on Tuesday and was approaching $11,000 Wednesday morning.Continue Reading ==>2) Goldman Warns Highest Valuations Since 1900 Mean Pain Is Coming (Bloomberg) A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors, according to Goldman Sachs Group Inc.Continue Reading ==>3) How to Build an Afternoon Trading List (T3 Live) In this exclusive video, you can see how legendary trader Sami Abusaad builds his personal afternoon watch list.Watch the Video ==>4) Interview with Charlie Bilello of Pension Partners (All Star Charts) This week on the podcast we have Charlie Bilello, Chartered Market Technician and Director of Research at Pension Partners, LLC.Continued Reading ==>5) Finding Trade Setups with the Quant Edge Strategy (T3 Live) In this special video, Rob Smith, creator of the Quant Edge trading strategy, breaks down some relative strength plays amid a mid-day selloff. Watch the Video ==>6) If you love Amazon, then this high-flying stock could be a sure bet for 2018 (MarketWatch)Laying down his top predictions for 2018, this strategist says Tesla shares could nearly double to $600 next year and reach a market cap of $100 billion.Continue Reading ==>7) Why Bitcoin futures and a shoddy market structure pose problems (Financial Times) There’s a popular opinion in cryptoland that the launch of bitcoin futures by the CME in December will trigger an investing rush as institutional investors and hedge funds wade into the market in size. This in turn, the theory goes, will see the price zoom even higher.Continue Reading ==>8) 9 Ways to Destroy Your Account with Options (T3 Live) Options trading is fun. Options trading is sexy. And options trading can destroy your account if you don’t know what you’re doing.Continue Reading ==>9) Uber’s third-quarter net loss widens to $1.46 billion: source (Reuters) Uber Technologies Inc’s [UBER.UL] quarterly losses widened, a source familiar with the matter told Reuters on Tuesday, as the ride-hailing company wades through legal troubles and faces regulatory scrutiny across the globe.Continue Reading ==> 10) How to Launch a New Business in One Week (The Tim Ferriss Experiment/YouTube)
Continue Reading -->Black Room Afternoon List | Open House Training
Black Room-Building Your Afternoon List Watch Sami Abusaad review today’s list of stocks to trade.Then click here to join the open house this week. Watchlist Review with Sami Abusaad | Black Room Open House Day 2Onine Open House 11-27 to 12-1 How to Build an Afternoon Watchlist Watch this new video then register fot the live training. == > https://www.t3live.com/blog/t3-live-black-room-open-house/Posted by T3 Live on Tuesday, November 28, 2017
Continue Reading -->Black Room Game Planning | Open House Training 11-27-17
Black Room-Game Plan Video | 11-27-17 Watch Sami Abusaad review today’s list of stocks to trade.Then click here to join the open house this week.
Continue Reading -->Sentiment Report: Traders Still Happy with the Low Vol Grind
In last week’s sentiment report, I said “volatility is finally picking up!” And then it collapsed all over again as the post-election bull market raged on, with all major indices including the Russell 2000 breaking to new all-time highs. The VIX fell back under 10, and the bears are once again asking “is this low-volatility grind ever going to end? Traders were in a pretty decent mood before Thanksgiving, and they’re looking happier Friday morning with futures bid higher. So let’s take a fresh look at our sentiment indicators to see how traders are feeling on today’s Black Friday “holiday.” (click here for a primer on the sentiment indicators below) 1) VIX Spread – Bullish Last Wednesday, the VIX hit a 3-month high at 14.51. It’s around 9.85 Friday morning.. That’s extremely low by historical standards, but it’s become the new normal… at least since the summer. This gives us a 3-month spread of about +3.95, which means traders are very bullish. (click here for a primer on the VIX spread) 2) CNN Fear & Greed Index – Neutral The Fear & Greed Index is at 54, up slightly from 50 last week. This index operates on a 0-100 scale, so a reading of 54 is neutral. Before last Thursday’s big reversal higher, it was actually at 35. On October 6, it hit multi-year highs at 95, so it’s obviously come back down to earth. Funny — a lot of folks thought that 95 reading meant we were peaking. But markets kept pushing higher, showing how difficult it is to time tops and bottoms with sentiment indicators. 3) AAII Sentiment – Neutral The latest AAII Sentiment Survey shows that 35.5% of individual investors are bullish. This is up from last week’s 29.3% reading, but it’s still way off the 45.1% level from two weeks ago, which itself was the highest since since January 5, 2017. The long-term average is 38.5%, so a reading of 35.5% is basically neutral. 4) CBOE Equity Put-Call – Bullish The CBOE Equity-Put Call ratio was at 0.57 on Thursday, which is well below the 0.655 long-term average. The 10-day moving average is 0.629, which is below the long-term average. Both point to bullishness. Conclusion Out of 4 sentiment indicators, we have: 2 bullish (up from 1 last week) 2 neutral (flat) 0 bearish (down from 1 last week) The permabears are still saying that everone’s all-in bullish and 100% complacent… but the numbers point to moderate bullishness. If you want to see full-on 100% bullish insanity, go back to October 6 when I declared the following: Let’s not mince words: the bulls are clearly insane. They think they’re destined to ride into the sunset on a magic carpet made of cold hard cash. Of course, I hedged myself by adding that “the bulls may be insane… but they may also be right.” And they were right! The Russell 2000 shook off its cobwebs, tech picked up steam, and the bears got take to the woodshed. I suspect that with a few more days of upside, sentiment could go full on psycho bullish. And that’s not out of the question. Friday’s off to a great start already, and low trading volumes (due to the holiday) could exacerbate movement to the upside.
Continue Reading -->