Markets Bullish After Last Week's Rally? | PreMarket Prep September 27, 2021

Join Gene Munster and Mystery Guest tomorrow (Sept 28th Tuesday) at 1:00 PM EST at premarketprep.com

Episode Summary:

Last week of the third quarterUK Gasoline Shortage due to supply chain issuesTesla Testing the Full Self DriveZoom one trick pony?

Stocks talked about on the show:

$TLT, $SPY, $QQQ, $IWM, $DIA, $TSLA, $FDX, $ZM, $BBIG, $PENN, $DKNG

Guests:

Tim Quast, Founder/CEO, ModernIR and Market Structure Edge 35:00

Twitter: https://twitter.com/_timquast

Matt Hammond, IPO Warriors 62:00

https://www.Ipowarriors.com

Twitter: https://twitter.com/warrioripo

BENZINGA HEALTHCARE SMALL CAP CONFERENCE

Wednesday, September 29 - Thursday, September 30 | Virtual

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The Benzinga Small Cap Conference bridges the gap between Small Cap companies, investors, and traders. Learn about small cap investing with clearly defined Educational Modules, take a look at a curated group of Small Cap investment opportunities, and connect with the healthcare Small Cap audience in an intimate, virtual setting.

MEET THE HOSTS:

Dennis Dick

Twitter: https://twitter.com/TripleDTrader

Spencer Israel

Twitter: https://twitter.com/sjisrael

Joel Elconin

Twitter: https://twitter.com/Spus

https://www.premarketprep.com/

Disclaimer: All of the information, material, and/or content contained in this program is for informational purposes only. Investing in stocks, options, and futures is risky and not suitable for all investors. Please consult your own independent financial adviser before making any investment decisions.

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Unedited Transcript

Coming to you live from downtown Detroit. This has been Zynga is pre-market prep with your host Joel Kahn. And this is a vowel tile property here. Isn't it. And Dennis, I will buy the stock per pen. Everything that you need to start your trading debt.

good morning, everybody happy Monday. Hope you all had a great weekend. Welcome to pre-market prep. I am in a nice dark office. It's a Monday morning. The lights are off, but I'm bringing the energy we in a lot to talk about today. Uh, if you are in the UK, I want to hear from you in chat. I want to know what your experience has been like for the past three or four days, trying to get gap.

Cause there is a gasoline shortage over there. I want to talk about that. I want to talk about, uh, Fridays, uh, close. I want to talk about the fact that it's the last week of the quarter. End of Q3 window dressing. Question mark. Maybe I want to talk about Tesla testing full self-drive in some vehicles.

We'll take questions from our chat. Tim has to be on at 8 35. Matt Hammond will be on a nine talking to IPOs. So a while to get to on today's show before. Go with the job quick things that you can all do. Number one, smash that like button right there on the screen. Number two, remind you, I won't mind you that, uh, tomorrow Rachel is one-to-one 30 Joel with Jean and a mystery guest pre-market prep.com.

And also this week is our next small cap conference. Go to BZ, small cap.com. Wink is up on the screen. URL is up on the screen. We're talking to healthcare stocks two whole days of healthcare stocks, biotech stocks, Thursday, no, sorry, Wednesday and Thursday. This week. Bzz small cap.com. Check it out. I'll be there.

You'll be there as well. All right. Let's bring up Joel as charts and Joel, or unless you wanna tell us how your weekend was first. Uh, we can't lose good. Will, uh, we can talk a little football when triple D he's uh, he's making this, oh, I'm right here. We can talk it right now. I'm right here. That that's an unbelievable that the lions just find a way to lose.

So now I'm officially predicting the Owen 17 season the first ever. I mean, we took the Owens 16 season, so we might as well have the Owen 17 season as well. There was, there was no possible way to lose. You know, and the game was over. It was over. So, I mean, this is bad teams find a way to lose, and this is why I don't watch lions football anymore because it just upsets you.

And this is no reason I get enough upset with my Wheeler's hockey. I don't need my lions football upsetting me too. So that is unbelievable. Anyways, replay at all, Spencer Joel. So the lions fans, who are the people who don't watch lions football can get a feel for just how much, not only how, how bad the lines are, but how unlucky they are.

Yeah. All right. What we'll do is quick, and then we'll get to the, the, the stuff you guys can have stocks and jocks. Basically the, uh, it was the end of the game. Uh, the Ravens are driving and the, before the second, the last one of the game, there actually should have been a delay of game penalty, but they didn't call it to the last part of the game Alliance.

Cause the lines last point of the game, the Raven's cake, eight NFL records, 66 yard field goal. It goes doing off the crossbar, N N and I've never seen that before. No one has, it was an NFL record and we happen against the lions. There was no way would happen against any other team. Joel, thoughts, concerns.

You're saying the lions will not go on 17. Well, I read it just to let you know. Um, I, you know, I am officially saying the lions are going to make the playoffs. Not

because I've been lukewarm on the lions, my whole life, just, you know, I've been such a fan. Okay. But I got a story for you guys. I can remember it is plain as day 1970. I'm watching the lions play the new Orleans saints. I, and I think they have a one or two point lead last play of the game. They bring out town.

Okay, who had a half a foot? Have you guys, you guys only remember this guy had a half a foot. He was a straight on kicker and I was sitting, I can remember as plain as day sitting in my family room with my dad. And we're like, there's no way this guy's gonna make it. And he, I think it was even a little snowy.

I don't remember what the other was. The guy kicked the 63 yard field goal. He had the unfair advantage cause he had the flat. Yeah, he had that flat shoe. It was all believable. And so I, I, you know, I was doing some things. I rarely watched lions games. I'm watching this one and I'm like, I'm downstairs, Lisa's upstairs.

The TVs are in both place. And I'm like there and I wanted to text my, my son-in-law and go roar. You know, the lines are back and I'm like, I'm not going to just stop yourself from doing it. I'm not going to take some, I go, I am not going to be the lions, Jake. And then I thought it was short. I told him, cause I saw a, I thought eight yet.

I'm like, oh, it's short. And then all of a sudden. So I, um, you know, cause I think Michigan's going to fall apart here in the next couple of weeks and there's not much other spot, you know, sports to fall, you know? So I'm on the line, bad wagon, man. I am hopping around with and it's clear cause everyone's jumping off, but I'm hopping on, but no mental man.

You know, we talked about stocks, is it as good as it gets? Is the lions, is this as bad as it gets? I mean, it's possibly as bad as it gets. Is this the absolute bottom, the capitulation event where everybody's done with lions football, because of not only a bad team, they're so ridiculously unlucky as well.

Oh my gosh. Oh my gosh. It's, it's comical at this point in time, but let's move on to stocks. Turn around overnight. Dennis, what did you do at four in the morning? We were up 20, some handles that's 44, 72 and then completely. And now we're down eight handles, you know, we're below the clothes. The first thing we got to do is clear that.

I don't know. There's not a lot of support in here, but man, it's hard shortness market. So anyways, we've done. We're continuing to make new lows. I don't know if it's ever grind day or whatever the problem is, but, uh, crude is up about 34. You can't get crude anywhere. He can't get gas in Europe, 75 31. Uh, that's a new high, uh, since, uh, January I 20.

So crudes ripping all this gold down to 60 Silver's up 18 Bitcoin up 1300 Ethereum. But man, what a turnaround overnight? Well, I mean, he can look at the spy and say what a terrible turnaround here. You can look at what the real market is, the IWM and say, actually, we're up here this morning and that's what I'm going to now.

I can look at the majority of my stocks. I love it on my screen. I would say 70% of stocks are green. Why look at the IWM. It is a better indicator for the overall market. What is getting hit here this morning is mega cap. That is why you were down here on the spy, apple down significantly this morning, down a Bach, which you know, Microsoft down a buck, Amazon train down 18 points.

It's mega cap tech. You go across the board. Banks are having a great day to day. TLT is down. The banks are up significantly here today, or oils having a great day to day. I don't know if it lasts or not, but the spy is just such a poor indicator now. And the S and P futures is such a poor indicator for the overall market.

And it's been this way all year. A better indicator. Again, I'm gonna say it again as the IWM. So we want to know what the market is doing overall. You don't look it's five because it's too many mega cap tech in there. May cap tech has a bad day. It's like, oh my gosh, the market's having such a bad day. And there's UNH is trading up three bucks.

We got Boeing trading up to box. We got Deere and caterpillar trading higher. We've got a pile of stocks that are doing really well here this morning. So again, the S and P futures indicator has fallen apart because it's too heavily weighted five star. That's my rant, Facebook down three bucks that hits it too.

So Tesla's right there, mixed in with the S and P now with the spy now. So it's down five bucks too. It's not its own animal anymore. It's totally linked in with the re with the arbitrage traders. Although Tesla was its own animal on Friday, I will tell you making new highs on the moon, breaking out. I hate buying breakouts in this market, but man, that's a nice break on a test.

Yeah, it cleared that seven 60. Everything was hard for EVs. I mean, it must've been that Benzinga conference last week, that Evie conference to get them going. Uh, but rotate it. Yeah. I mean, he had Tesla and the rad a little bit today, but metal man. Great move. Look at that 7 62 areas now as support. So money just moving around and moving in the EVs, uh, last week.

Wow. We're really fallen now. Oh, I know the D S and P uh, yeah, keep going down. You got apple and company going down, so that's going to be the overall indicator. It's not, you know, the average stock, what we were saying last week, the average stock, believe it or not is down 28% from its all time highs.

That's the average stock. It's an incredible stat considering the spies two and a half percent off its all time high it's wild. So it's just a wild stat to know that the average stock is down a hell of a lot. So it's not an indicator for what the overall stocks are doing. It's an indicator for what mega cap tech is doing.

That's the spine out. So, and right now this morning, tech is getting hit. The QQQ is, are down significantly. And the spies getting hit to everyone. We went out for using the S and P 500 as an indicator for the overall market, every money manager on CNBC. Oh, we haven't had a 5% correction. What are you talking about?

The IWM has pulled back significantly. It just looking at the wrong indexes. We had JC Paret saying the same thing last week. Great. You know, obviously chasing, nobody knows the charts better than JC. Maybe Joel, Joel probably knows the chair better than JC, but they're both writing. Near the top, but you know, you get stuck looking just at the spa.

You got the, you know, the blinders, Joel, Horace analogies here, they put the blinders on, on the spy and on money managers are all wearing the blinders and saying, oh, this is what the market's doing, but they're not seeing the big picture. Take the blinders off, see the big picture, put some IWN on there.

And you IWM, and you'll feel a little bit more like, Hey, this is more indicative of what my overall portfolio is doing, unless you just, don't all Amazon, apple and Microsoft, which is kind of, is do by default, even though they may not be there in 10. They have to, they have done all this stuff, right? Yeah.

Well, no, but I, I mean the index investors, I don't mean like the actual index is, I mean, like they pick the people like me, for example, right. Who just like dollar cost average into, you know, a small cap fund in a large cap, large cap fund all the time. Right. And it's like, I don't mean to, but I am just money just continuously pouring into the same five.

Yeah. Well, I mean, if you think you're diversified, just don't expire or you really any more, there's another question there too. Are you really diversified? I mean, I obviously you're fairly diversified. I mean, it's not like you own two stocks, but you are heavily weighted mega cap tech heavily weighted. So I just have been arguing overall IWM is a better indicator in small caps.

Got everything, you know, it's mixed, there's a lot of stuff, obviously, but it's just not so heavily weighted five stocks, better indicator does not equal better investment. That's true. I mean, that's totally true. The best investment has been spy. So I don't think we're arguing that, you know, it's buys a poor investment.

We're just telling you what. Tesla is hopped in there. You know, you got the apple, Microsoft, you got the double goop. I had an Amazon then Facebook, Tesla, and then you have invented. Right there right behind it. And then you're just watching breakbeat JP Morgan, J J. And J's just, that's probably going to be falling out soon, uh, uh, of the top 11 components.

And then I'll just, I wanted to real quick, as I mentioned, J and J folks, we've got a nice formation here. Four days in a row, 1 64 to 1 66, 1 64. So, man, are we going to break down here and test that low, the moon rock solid resistance in 1 66. That was interesting chart. And I think the most erratic stock of the top components is UNH.

Man. I think it's up and down, up and down, up and down, up and down. So I don't know pretty soon. I mean, JP Morgan still hanging in there. Oh, interest rates going up. Let's buy the living daylights up to a new all-time high and JP Morgan. I don't get that one. That's actually probably trading at a new all-time high.

Right? I know I'm still mad at you for the whale trade. Put a box on the longterm portfolio. $30 for drill said, now you're going to get 20. Yeah, regardless 28. Yep. Maybe don't miss a trade to save yourself a box, a long down investment. Don't miss a long time. I'm going to be mad at you for the rest of my life.

For that we need, we need a hold grudges, individual stocks. We're gonna let, we're gonna let, can you recap that bet for the, for the, the on initial, there was no, I wanted to JP Morgan during the whale trade of what, 2012 or 2011 when they had the wheel train and were hammer and the stock and the stock went from like 60 down to like $30.

And I was like, okay, JP Morgan's cheap enough. I think we were even doing the show that maybe we maybe first started the show when the show was just terrible. We had on ooVoo and it was just like, we didn't know what we were talking about. We knew what we were talking about. We just couldn't speak. So, um, and we still can't speak that well, but bad tangent again, but the whale trade abroad, JP Morgan, the whale trade was this.

Um, I can't remember what the whale trade was now. The big trader that lost all the money. JP Morgan. Was that the guy over in the UK? Yeah. Yeah, that's good. I don't want to butcher it. So I just I'll, I, I I'd asked Siri, but my phone isn't here, so we'll ask, uh, it was Bruno axle. Yeah, it was over in London.

Yep. Uh, in the last $2 billion, JP Morgan was eating this and they were hammering the stock for it and they brought it down, you know, from like 40 down to like 30. And Joel was like the huge levels. I was like, I'm going to buy some at 30 in the long-term portfolio. Cause I can't go wrong. JP Morgan at 30 bucks.

And Joel like, hold off, you're going to get 28. He's like, this is the level it's come this far. You're going to get 28. I'm like, okay, I'll put my order. Like 28. I never got the stock and it's now $163. And obviously my kids came crying about it in the background. I can hear her crying as I tell the story cause she wanted the change.

It's still a good level. This is never going to see it again. The story is don't try to save a buck on your long-term investment. You like this company buy the stock 27 85. That was what I was leaning on. So that was the October, 2011 though. November local. Actually got to retest that level. It's gone back there.

Uh, hunter, Joel still thinks it's going back. I got my order still sitting there. It's GTC. It's still sitting out there waiting to get executed. Maybe the next flash crash. I'll get it. And then they'll post it on me anyways. I don't order at 40 and Tesla. It had 40, 40, 40, 40, 40, 40 that's even pre-split and I'm like, okay, it's coming back to pop.

I still own Tesla by that.

Can I ask a dumb question? If you have an order out there, like, like Joel, like Tesla 40 and then, and then Tesla, um, uh, splits or, or does it split or, or, or a reverse split adjust. Does that change? Your order should adjust. Yeah. You broke. Remember your orders held by your brokerage. So remember, sometimes watch on the dividends.

They don't adjust for. So that's where, you know, people get screwed. They're like, oh, they have the order sitting out there. And the stock goes ex-dividend and they're trying to say 25 cents. It goes X dividend for a buck like AFG today is X dividend, for example. And it was an adjustment there of $4. So it's not one 30 to 40 it's 1 28, 40.

So on some of these, they adjust the clothes, but they don't adjust your, your order of there. So you gotta be careful on some of those good to know, but on splits they should adjust the broker's supposed to adjust those orders. Okay, good. Good to know today through your broker doesn't or not. I dunno, I guess it depends on what you're paying, but if you're already sitting on the.

Because remember when you send an order, it might be sitting on your brokerage platform. It might be sitting on the exchange, find out where it's sitting, like when I'm a prop trader and I'm sending my orders directly into the market, no middleman, then, you know, there's no, no Citadel in the middle of my orders are going directly into the market.

Right. I send a GTC, it's sitting on the exchange. So now it's the exchange, you know, that knows that, that those orders are sitting there. If you send note GTC, but if you've got your broker, I mean, a lot of these brokerage orders are kept on their platform, which there is an advantage to that too. I mean, you know, I think IB keeps a lot of it on its platform because there's, you know, not the information slip pitch where some people think the exchanges show some of these old orders, you know, elsewhere.

And if you've got it, you know, just held on your own book, hidden on your own book. There's no way that's going to get out unless your brokerage is selling that information, which is wonderful too. Well, it's like, well, that's not good. And all that it's Monday morning, eight 20. We got to talk stocks. All right, let's talk about oil here.

I, I, as I said off the top, I want to know if you're over in the UK, what, what your weekend was like. Cause uh, there are a, there is a shortage of truck drivers and therefore there is a shortage of fuel being transported around the country. BP has said around 30% of their gas station or Pixar petrol stations in the UK.

Uh, I have run dry. There was another stat that I saw. I said between 50 and 90% of gas stations in major cities. Our dry, um, because it's not because there's a lack of fuel. The fuel is an existence and it's just not where the drivers are. They can't transport it. And that's an issue with everything.

That's what I was saying even an hour ago, saying that to me, it's like how many industries are messed up? Because there are not enough workers. Where did they go? Now in the, in the UK is gays. They probably went to other countries. Right? Cause it Brexit, but he can't say the same about America, but anyway, neither here nor there industries are messed up.

There are so many is a shortage of workers, uh, here and there. And uh, in this case it's hitting, uh, oil it's causing oil shortage in the UK. Causing the price to go up here. I mean, USO is making a new high, it's making a new, you know, obviously we know the USO is not a great indicator because of the contango and the rollover effects, but overall, when it's the USO make a new high, you got to feel that oil is breaking out.

Where are the futures? It's got to be making new highs too. I would assume. Yeah. Oh yeah. We're back above all the January 20 levels right here. Boom. This going to the front month here in January of 20 we're above that. That was rolling frontline with contracts. So, you know, it's always, uh, always hard to determine exactly, but, um, I guess 76, 22.

Basis the rolling front month contract. Uh, that's a high, current high as 75 and a half up above 50. So going back to your basic supply and demand, Exxon mobile, getting off the meds, still not performing like, you know, like oil is, but still I'm looking at how far this off that, the high, the move, Dennis. I mean, you think he got room up to 64 93 on a swing trade here.

58, 70 up a buck 11. So if you want to overcome, it's ran for a few days here. I'd wait for a pullback. Now I know overall I'd have no oil in my long-term portfolio, but you know, I'm still, you know, we have got a commodity trade going on. There was no doubt that, you know, besides the gold and gold doesn't count, that's what it is.

You got inflate, you got inflation pumping. And obviously, you know, we saw a lot of commodities come off from where they were, but I mean, some of them are starting to come back up. So I, it could oil go to a hundred bucks. It could it's possible. Um, I think if you're betting on it though, and you're buying it today, maybe you're chasing a bet.

I w we have lots of pull backs even on that USO. It's very rare. If you look at the chart here that we just continue to grind. Now, this has not been the market to chase. It applies to oil as well. So I'd wait for a pullback first, just like my Cleveland class, you know, that I just bought, I waited for a pullback and it had a significant pullback here, but it came back down and support.

And, you know, obviously it's, I'm not much in it. I bought it right 19 and a half. It's 20 and a half, but you know, I'm waiting for a pullback is the overall trend still in tact. It's arguable, but I still think there's a commodity trade happening here. So that's why I'm, I've been buying steel, you know, on the pullback.

So I don't like oil, just, I don't like oil. I mean, we, we had, we had someone on our show last Tuesday, J young, he was talking about $190, a hundred dollar oil, you know, uh, reasonably confident that by the end of the year, how many he's an oil guy. But I mean, when you, when you see headlines like this of just massive shortages, people can't get their oil.

I mean it, and then, I mean, yeah, it didn't, you see oil leaking daytime here. Yeah. WM. Before we say that. Oh yes, the IWM has gone red now. So we are officially leaking now. Thank you, Dennis. Officially leaking now. Okay. Well, call me when we get to like Friday's open, which we're not, we are there in the, in the QS kind of, can you just rewind the tape to three days ago?

When I went on my little rant and I said, I think we're going to have eventually an epic bond sell off. You see what the TLT has done in the last three days? TLT just went from one 50 to not that this is epic, but we have been straight down. I mean, again, I don't know who's buying like who is like, long-term investing their money for 20 years at 1.4, 8% in bonds.

Who's doing that. I mean, who is really the buyer? They really think that the yields, I guess if you think that yields are going negative eventually, which, you know, I guess it's not impossible because we do have that in other places in the world, then the bond prices go higher. But at a certain point you just got to say, what am I buying?

I'm buying, I'm tying my money up for 20 years. And obviously you can sell anything. But if you're just saying I'm going to just put TLT in my long-term portfolio and forget about it. And I want it for you. Like, you know, for, you know, a hedge, I mean, 1.4, 8%, you're just getting the crap kicked out of you by inflation.

So I still think, I think TLT, and I'm not saying by the end of the year, but I think TLT is going to rechallenge those March lows of one 30. I think it is, you know, this is the start of the sell off. I think you get a rally and TLT. I think you sell the hell out of it. I think if you're load up in bonds and you're thinking, oh yeah, I'm safe and bonds.

I don't think you're very safe in bonds at all. And I do think inflation is real. I don't think it's transitory. I think you've got to position yourself for all the possible continued rise in prices. And that's why I've started, you know, buying certain commodities and stuff without really chat's asking.

I don't think the fed is still buying bond ETFs. That was like a thought brutal when they were physically going out and buying, getting that hasn't happened. I think for like a year, I think I could be wrong, but I, I thought that they, I mean, they're still buying bonds, but they're not buying the bond funds 120 billion a month.

I don't know if that's correct or not. You read something on Twitter and you don't know where they'd get those stats from. There's so much information out there and you don't know what is actually real and what is not, but 120, 20 billion a month still buying. Unbelievable when you think about it, but, uh, hopefully the taper comes and hopefully the market can handle the taper, but I just, I just don't understand how you'd want to tie your money up at one or half percent for 20 years in a inflationary environment.

It doesn't make any sense to me. So I think if you want to go, you know, if you believe that inflation is transitory, if you believe we're actually gonna start running under 2% again, then the TLT is probably a buy. I don't believe any of that stuff. It's why I wouldn't want to own any of these. That's why I'm even scared on like some of my preferred stocks, I'm going like 6% on some of my preferred stocks.

And I'm like, wow, I don't know. And I'm not saying interest rates are going up, but I'm like, am I beating inflation at 6%? Well, well, like ask yourself this for all the people that like all the advisors out there that historically would say, oh, 60, 40, or even as 70, 30, right. 70% stocks, 30% bonds. You think anybody, my age is willing to allocate like even 15% of their money to bonds.

No, they're not, no one, no one my age is, is willing to do that. Right. So I think of it like a, like the gold thing, right? Like just a, a lack of generational buying probably. Well, I think gold is just, I think that's, I think that's exactly what goal, I mean, you think naturally inflationary environment, Gold's going to keep up, but I think people can take old.

Yeah, I think you're right. I think the younger generation does. They want to show off their NFTs on their cell phone. They're not showing off, you know, they're bling bling. If anything, they're going to show off their gold digital gold rings. That's probably, you know, the digital gold, which, you know, like physical, like you can see gold on your cell phone, but it's just not the environment anymore.

We're fancy jewelry is, you know, indicative of wealth. It's, you know, it used to be like, oh yeah, I'm a wealthy person. I have all these fancy jewelry and I want to show off. I mean, it's not the case anymore. It's a different world. So you look at gold and you think, I don't know if I want to own gold. I don't, I don't almost know goals.

Looking at the axle. You Dennis, have you been traded and look, how, how many read this? Could this be a record for red days in a row? I mean, look at this thing and don't kid yourself. Inflation is sitting utility stocks here too. It's starting to as well. I mean again, if interest rates start to go higher and you know, maybe we are calling it that we are eventually going high.

I don't think. But if the market thinks interest rates are going higher, utility stocks are less attractive because obviously you're getting XL, you're getting a 3.0, 4% yield. You don't get a lot of like growth in there. That's pretty much what you're going in at four, three, maybe 4% in some of the individual utility stocks.

What's kind of what you're in it for. You know, I like my Enbridge and Canada, because that's a real yield ENB, which you can buy over here at 6.6, 1% dividend. And when I was buying it back and bridge obviously has had a significant run. Uh, but I was buying this back when it was, I think $28 back in October, the yield was eight and a half percent.

So I was like, okay, eight and a half percent is a real yield. I know Enbridge one of the biggest utility companies in Canada. And, um, I don't think it's going under and I'll get eight and a half percent of my money. I'll take all day, even 6.61. But when you're invest in the XL, you at 3:00 PM, I mean, yeah, you have a little bit of growth in there, ASOS and they're 4% X I'll use a lot of N E, which has some growth in it next year, but it's not a high growth industry.

You're kind of going in there. And a lot of those stocks have the yield and those have been getting hit. You can clearly see this trade where, you know, maybe it's power. Maybe it's a tapered tantrum happening to a certain extent where there are, it's already starting. We're starting to see people sell off investment vehicles that have, you know, or that, you know, could be impacted if we start to go to tapering.

And if we eventually go to higher interest rates and, you know, inflationary trade as well. So the growth trade, you know, obviously can get hit there too, but there's lots of implications for watching fed policy. Then Everett that line five better not bus there.

If that goes, if you guys mess up, ah, the great lakes. I don't know anything about, I'm not going to care about your yield. You don't care about the fresh water in the world, wherever the grain.

5%. That's really great. Dennis and bridge is an anti. I mean, if that line ruptures, oh my Lord. So all this like 70 years older than me holes in it, just by some good carbon credits and you, and you'll be carbon neutral. Spoos I say the IWM what's the IWM doing folks because the Taylor in there hanging in there.

It's not, it's not red. But you do have a, but you do have a level of

tack what a big tear out, keeping an eye on 2 20, 1 65 for I IWM the only index that matters. That should be a slogan. The only index manner is according to it, you should do a commercial for them. Dentists only index that matters their index is two, but I like something that's so liquid that, you know, I can just get in and out with, you know, a lot of stock and easily.

It's always got like a two, three sentence bread. I love that. And that's why I love I do. DIA is a little wider IWM is always so liquid that I can get in and out of it fairly easily. So I love liquidity, liquidity, liquidity, three minutes till we get Tim the Tesla for a second, uh, uh, Elon mosque was taking to Twitter again over the weekend, but it was not for a bad reason.

On Friday, he tweeted that full self-drive beta, the request button, the button to request the beta features is going live on Friday, but it needs another 24 hours of testing. So the actual future will be out tomorrow, meaning Saturday nights. So full self-drive testing. Beta is wive. Apparently you've. If you have a Tesla, you can request to be a beta tester.

And what you need, anybody. Why do you need a beta test here? Right. You just throw them on the road and they're self-driving that doesn't make any sense at all. I mean, they need to make sure that, that, that, I don't know. Joel, Joel is asking the real questions right there. That's a really good question, Joel, like, I don't know.

I'll ask Joel the real question on Tesla. And this is the only question that matters on Tesla breakout or fake-out. Uh, as long as it's just Bob seven 60, it's a breakout. There you go. When you're trying to determine if the breakout or a fake-out, if you're buying the breakout, what I would use is the candle that it was breaking out from.

So I would say below 7 44, Katy bar, the door you'll have a lot of new people caught. If it can continue in the hole up above that the breakout could work again. I'm going to say in this market environment, there has not been a lot of clean breakouts. It is usually a fake-out. So you just gotta be careful just coming in and saying, Tesla's going 800 and it might, and, you know, do I want to buy a pullback on this?

It looks great on the chart. It's a clear uptrend. Um, and it might, but if you are buying the pullback, I would stop myself out on Friday as low as seven 40.

Hi, close in the move is something you want to keep an eye on too for confirmation. And that was a big old day on Friday. Uh, so you know, people are trading, you know, traded it on the mark 7 74 39. That was right up near the high of the day too good volume yesterday. So, but it looked for this to go green, about five bucks away.

Uh, as we speak just it's gone down, but it's like, it's not getting pounded, like dispose. I want to know anyone in chat that has a Tesla. Will you be beta testing for soft drive and. Put a one in the chat is full self-drive. Do you find full self that's? A can of worms? I don't think we want to go into that.

The next 30 seconds, 40 seconds to define what is full self-drive. There is what full self drive. If there's what they say it is. And then it is what it actually is. Like I think drive is like, I kicked back and like, you know, backs into my car and I go to sleep and I wake up and I'm there. That's what I think full self drive is, but they don't call it that.

Well, that's what it's supposed to be. That's what I would like it to be. Right. You know, how much awesome a road trip would be, where you just sit back for two, all you pour yourself, a drink in the backseat and the Curtis does it all. You don't even have to worry about anything. It's pretty awesome. Yeah, don't have to pay for a driver.

The car just drives itself. I go to sleep. I doze off a little bit off. It's like Homer steps. I fall asleep behind the wheel. It's going off the mountain. And then they realize all the semis have some full self drive on them anyways survived. But the semi truck drivers were always hiding it. Simpsons know everything.

Yeah, definitely. It is 8 35 on a Monday. You guys know what that means.

Founder and CEO of market structure edge. There he is from I've called. Of course there is a golf course behind me. Yeah. What hole is that behind you say again? What hole? What hole number is that? Uh, that the 18th. The 11th. I, you know, I can't remember because I don't play that course. It's a right. I walk around on it with the dog and the deer poops on our golf course,

but I am,

if I was golfing on that hole, you would not be sitting there. You would not be safe for all.

We do have a wall here, Joel, that we can dive behind when you're at the T. So that's why we've got that. It's a as Lucas Nelson would say, this is just outside of Austin, uh, which is a great song by, by Willie Nelson. Uh, hello and happy Monday to you guys. Tim, last week was, was crucial. Uh, we were talking to you on Monday and you said, uh, wait, I think he said, w was it Tuesday or Wednesday that.

So, so we said that Monday, Monday when new options traded. So Monday the 20th, uh, which we'd said that for a couple of weeks would be the most important day for traders in September. And, uh, and of course it was a very difficult day. Then, then the market bounced back and, uh, now we're. You know, those, these are the, but, but it's, again, I think a great reminder to traders who listened to this program, uh, that there is, there's clearly a connection between options, expirations and volatility in the markets and what tends to happen.

Yeah. There's, there's no question about it. Uh, I, I tell folks all the time that, that, uh, headlines don't explain volatility, headlines are a consequence of volatility because what happens is that most market observers then cast about, for a reason to explain why the market did what it did. So then we're all concerned about it's China, it's ever a grand it's this thing, it's that thing.

It's the fed tapering. And then, then the next day the market goes up 600 points. And no one knows what to say. I put this in there in the, in the market test note to edge users this morning that, uh, you know, there, there were on the same day in the wall street journal, the top headline. Uh, every grand worries, uh, hit markets.

And then right below that was, uh, Dow rebounds to positive performance. That was the best they could come up with because what do you say? What's the explanation. If in the same edition of the wall street journal, you have, uh, a, an article about why the market is crumbling on every grant and. Right. What's on Tuesday morning.

Uh, and it's, it's important to understand, I think, and you're exactly right in the media always wants a fundamental reason for why the market did what it did. And when a lot of times there is no fundamental reason and they do search around and they do call around like, what's going on? You know, what, why, why are we selling?

Uh, you give them some technical reason. They hang up the phone and call the next person because they don't want, they don't want to write up some technical reason. I don't want to write up something. Well, you had all the options expire on Friday. Now it's opened up a little bit because you don't have all those people who are owning the calls and the puts is natural buyers and sellers.

So you'll lose all that liquidity and it opens itself. But they don't want to hear that. They don't wanna hear the technical reasons a temp GWAS is going to give you today. They want to hear ever grant is blowing up. Cause that's a sexy story. You're exactly right. That I've led you're in that chair. I'm I, you know, I interact with, with, uh, reporters all the time and uh, and I will say, well, this is the reason then you're, you're exactly right.

That's that's not an interesting story to, to, uh, say, well, 20% of the market rests on derivatives. And if that level, if the demand declines into quad witching, well, it's very likely the market's going to go down. Well, you write that in a story and nobody reads it. It's just so much more gripping, uh, to talk about $300 billion of debt hanging over every grant.

I get that, but that doesn't mean it's. You know, it's at what we want as traders is to know what's coming. We want to know what the risks are so that we can avoid them. I love to say, you know, with market structure, edge, take gains, not chances because any gain is better than a chance that leaves you holding an empty bag.

Uh, and so we want to know what's coming and then how well month end or in this case, quarter into month and in quadrant window dressing, it's very important to understand this. And, and once again, the media tend to gloss over this and ignore it. And it's very important and it gets back to understanding the motivation of.

And there, there are effectively three different motivations. If you're hedge funds who are trying to, uh, improve performance before the month ends because you let your customers know they hydro hedge funds tell their customers monthly, how we're doing, and they're measured internally monthly. They're very concerned about those sorts of things.

So in the last week, before the quarter or the month ends, you're going to see a flood of effort to try to improve returns. And what did we get a very nice performance in the market? That's one thing then, then passive money tends to be the. Well opposite of that. If there is volatility, all of the people, including me who have managed accounts, uh, who want to control volatility, that their advisors are gonna talk to them and say, Hey, you know, we may be hitting the period of bumpiness and equities.

What do you want to do? And there'll be adjustments made. And what tends to happen is the passive money reduces its exposure in the face of volatility. Plus it causes tracking errors. It again, it's very important to understand that BlackRock's indexed funds. Aren't trying to outperform the benchmark.

They need to track it. All right, that's all they want to do. And so if that becomes more difficult into the month, end of the month or into the end of the quarter, they're going to reduce their exposure to anything that it contains volatility. I'm telling you that's what's going to happen. So the, the, uh, and, and it's, it's, uh, important to understand why, why?

Well, there's a T plus two window used to be T plus three. Well, tomorrow is T plus. To the end of the quarter and end of the month. And if you want to have everything done, if you've got a lot of money to move, that's when you're going to begin, because you've got to be finished. You don't want something hanging out over the end of the end of the quarter and the end of the month that might come back to bite you.

So that's, that's, what's going to happen. So what does that mean for the markets? Well, I I've been saying since, uh, what a long way back, but let's just go back to September options expiration. So a week ago, cause we think, and, and, and, uh, you know, as George Santiana said, who was really, what was it? Jorge, August Stan, uh, Ru uh, Nico Los Ruiz.

Santiana

so he was, you know, he's a philosopher, but he wrote in 1905 and great ideas of Western man that those who cannot remember history are condemned to repeat it. So in your lucky traders that we are only thinking about a week or two or three or four, because that's how we think. All right. So, uh, w what we want to be aware of is what was the money to do.

Well, I think the money told us that we've been writing about this, that it's shifting away from things that have more risk into things that have less risk. We've talked for nine months about the great rotation to value, but it hasn't happened. And I don't know that it will happen, but I think the data are clearly telling us that tech is going to get more risky because it's more volatile and things are going to shift to things due to, to the kinds of exposure that offer less volatility.

Good to know that in advanced traders, you have a short window, I would say you have two or three days at most to trade those tech things that you love. I sold my Fordanet. Friday. I mean, it's a great run, you know, I've got great gains out of that stock and it's still sentiment still rising. It's a good thing to own how whenever context matters.

If I know that the money is beginning to be concerned about volatility, what will be impacted by that? Well, all the stuff we love for, to net Palentier, Tesla, the fangs, all that stuff will, and you won't, it'll be too late by the time it arrives. You want to be ahead of that. And that's how you avoid, uh, forgetting the history and repeating its mistakes.

Well, Tim, I just want to ask you about last week. Cause you did say you, you were keying on I'm pretty sure is. Wednesday was the day that you were going to key on as sort of like your, whatever happened. Wednesday was gonna determine your, your stance here. So, so knowing what happened throughout the back half of last week, I will take it that.

No you're feeling pretty good here. Well, yes and no. And I'll show you why, let me, let me just share. And we will just hit high points today. We don't have to go through a bunch of tickers, but, uh, you know, edge mob. You guys know this already, but I want to show you that, that, uh, this is what we look at. And, and I, I think it's important to understand why I w Wednesday was a good day because we were fully out of the expirations period.

It takes about five days. There was the Wednesday, Thursday, Friday of the proceeding week where we have generally there, you know, sometimes during the year, I think it's three, four times a year. It'll split into two weeks, but we had VIX expirations, index options, expirations, and then quad witching. Those were 15, 16, 17.

Then we have the weekend. Then the 20th we're new options trading. We could already see declining demand for those. Well, then we fall off the cliff with nuance. Then on Tuesday, we call that counterparty Tuesday. It's the it's the day, every month when the banks will true up their positions. So once that gets sorts out, sorted out, then Wednesday tends to be the reality and markets took off that's hedge fund saying, okay, we're in the clear, we're going to make a run at things.

And if you're watching, that's what you want to capture. So that's what I did. So I have Wednesday, Thursday, Friday, pretty good days to trade. I had some broad exposure to the Dow, little less to the NASDAQ is that's where the money's going. The money's going into blue chips, but now I told traders, this is going to be a very short cycle.

Because we've got hedge funds who maybe made up some ground with some heavy leverage, but we've good. We're going to have passive money turning cautious. So the month end window dressing period could be bumpier than it normally is. That's my expectation, Spencer. I look, I love that period. I wish it were longer, but you, you have to be nimble as traders.

Take the data. What the data, tell you and do something with it. So here, I want to show you this. So on the right, this is broad market sentiment, uh, the, the darker line, and this is S P Y. So it's a short period here just 30 days, but I want to show you that, you know, if we, this is options, explorations, we got hammered.

This is options, explorations, we got hammered. Uh, and so the, the, if, if we're just a little ahead, we've been just a little bit ahead of sentiment. Each time it tells me that we're getting, getting closer and closer. To trouble for the markets. So we've been talking about it before. I'm not saying that the market is going to fall apart, but I do think those data have to tell us, uh, that, that we are running into trouble.

Uh, and so it makes me more cautious. It makes me say to myself, self let's just reduce our exposure, even though you would say, well, the sediments bottoming doesn't that indicate the beginning of the cycle. I think the cycle has already been speeded up because of quarter-end window dressing. And so be ready, traders.

You just don't have much time here. Now. I can be wrong. Right? There's something could change the data. But when I look at that, how we very quickly recovered when sentiment is dry, there's lagging behind. And I know we've got quarter window dressing I'm once again, going to Portage around risk. That's what I like to do.

Tim, we have, uh, we have the end of the quarter on Thursday, right. And I know there's some options expire with that. And then we have obviously the weekly options and the monthly options expiring on Friday. Is that what makes you thinks we're going to see a little bit of more volatility I'm in. When is the last time you've seen that and what, what, uh, what can you draw on from that past experience?

Yeah. So there's a, there's a huge futures contract that expires on the last trading day of each month. We've talked about this before now. The head of equities at Franklin Templeton told me, I wish the market for my passive money would be closed every day of the month except the last one. So I could true up all my tracking with futures and then B then avoid all the volatility that erodes, uh, how we track the, the broad measure.

Uh, so that's important to know, and, and it was created in 2014. Now we're seven years later and the amount of assets in passively managed portfolios has exploded. So that's what happens. And it's, again, one of those situations there, you know, there are those you say, well, what do you do? Just avoid trading all month.

No, not at all, but I'm careful around monthly expirations and month end monthly month, then monthly month, then that's how I think. Uh, and why, because you can't see it. It's it's, it's, uh, it's off the mark. And we don't know the depth of that. We can, we can get a pretty good idea by measuring the behavioral change, heading into each thing.

And it's one of the things we do, but we don't know precisely. And that's why Joel, you know what I've got on my screen, by the way. So I've got what I call my liquid up. It's a dynamic portfolio. It will tell me every day, the stocks with rising sentiment that are very liquid and those tend to be more conservative things.

So that if you're, if you're gonna, if you're going to hit a period of volatility and you want to be in the market, that this is the stuff you want to look at and right on my screen from Cigna, from Cigna to T to T-Mobile DocuSign is 54% short that's too far for me, that's more than half of the trading volume is coming from borrowed stock.

So there's your list. I mean, if there's any there's four to net, that's what I was in for. I'm already out because I J you know, when it's closed, it closed Friday at 3 11 90. It was actually through all three 13. I bought it at three, sold it at three 13. Well, it's a very nice game, right? So, uh, I'm out already, even though sentiment's still rising because I've gotten my game, but if you're going to find something that's more likely to be stable, that might benefit from the shift that's occurring.

That's probably it, I'm not promising it. I haven't gone through and profiled all of these things, which you can do is click the ticker and you could go look at it and see, well, what's the probability of a good return, but that's a good way to think about it. Joel, because this period, this is quarter-end window dressing.

Then you asked, when was it like this. Well, I want to show you something because there is actually a precursor to this. So I'm here. This is version 2.0 of the edge, which we have now beta launched and we got folks testing it. I like to expand this back. Let's just go all the way back. There's a, there's a, a data set that will, will you look at this and say, well, that's just a cardiogram for somebody who's eaten three cheeseburgers.

Right? Right. Well, here's, here's, here's where we ran into a similar problem. All right. So see how sentiment is we got weaker and weaker and weaker. And then we fell apart in the fourth quarter of 2018. Okay. Come over here, weaker and weaker and weaker. I'm not saying that that's going to happen, but I'm saying I've, I've been talking to the edge users about the similarity between the fourth quarter of 2018 and the fourth quarter, which will begin Friday, fall of 2021.

Again, I'm not saying that that's going to happen, but when the data are similar, you want to know what history tells you. It's why I use that. George Santiana quote, you know, if we forget history, then we repeat its mistakes. And I know that we can incentivize it tells me money is less and less enthused about equities and it won't, it'll it doesn't it doesn't give you a bunch of advantage and warning and time to make decisions.

It will happen fairly, very slowly then all at once. And we've actually been getting worse. Since April that this is coming. And so all of that should feed there's the, there's this word, the term occurred up until April. We had a momentum market and it's, there's a carry through effect. It doesn't just die.

You know, if you fire a gun, the bullet carries a long time, even though what caused that has, has ceased to carries for a long time. This is the same thing. All of that money we shoved into the market had a wonderful momentum effect, but it's, it's dying. Okay. So then traders, we have to get more co care.

Careful. I won't say cautious, you get more selective. You have to know where the money's going. You have to make sure that you're not buying stuff when sentiment's peaking, because that's what puts you at more risk, but we can see that's what I would say. Joel, there is a similarity to 2018. And it's something we have to watch.

Uh, if you want more of that, uh, and arguably you need more than, uh, 10, 15 minutes to understand all, all, everything that Tim says, you can check out market structure, edge.com. Tim joins us every Monday to give us his thoughts on the markets. Tim, thanks a lot as always speak to you again next week. Always a pleasure.

All right, guys. Good to see you. Good. You as well. Maybe next week he'll be coming to us from somewhere. We don't know. Oh, it's off the low. We got a little bias and 44, 27. So a trim has some of those lasses, a nice 45 point range here. Pre-market trading a expected nine day average range, 58 and a quarter.

So let's see how they dress them up. Dress them down. Yeah. Take your time. Okay. Fine. We will look at FedEx first. I see the sealant in there like four times today. Uh, they had earnings last week. So several people keep talking about FedEx. So here, well, points off the highest in the chat right now. I will say it's a hundred points off the highs now.

So the highest that we sit back and April may I sold this thing around two 60. I bought it a long time ago, like $90. And I was finally just a lot of it got over down at two 60, um, 2 26 here now. So it's below where I sold it, but I don't know. It's like in the middle of nowhere, Joel, like, uh, I'd love to, I think there's value here in FedEx, but just, I don't know.

And obviously inflationary pressures here too. I mean, they're trying to pass some of that through, by raising prices, which they recently did. I think, you know, it is oversold, but to try to just call the bottom and catch the falling knife, I don't want to be the person that. Wow. Wow. Wow. I mean, this thing.

Yeah. I mean, in this kind of scenario, you can always lean on the low of the move. Right. And

you got to yet right here, Fridays low as 26 60. Uh, you know what it, I don't know. I mean, if I tell you right here, you need the risk down to two 17 and a half. That's your next monthly low, but it feels like maybe everyone's out of the pool here that watch out because you had the big down day after earnings, then another down day and then wow.

Another whack on Friday on big volume. So two 17. And that's even, not even half back of the moves that they're having problems with, uh, with, uh, staffing too. Right? Does it, is that another company that. Cited, uh, boom. I mean, if you look at, since that March low, which is kind of a fake low, that takes you down the 200, but I don't know.

I, it, it starting to turn maybe a undercut today's low and then come back up above it, the old, uh, you know, the old whoops trade, but monthly support. That is trending up and it disappoints on earnings. Those dips typically get bought when you have a stock that is trending down and it disappoints on earnings.

It is hard to get those stocks to buy back up for the simple reason. There's so many more bag holders. So it's bag holder central. I got to wait until at least I see some green candle or yellow bottom or something. There's no reason to be a hero on say 2 26 is the last 3 22, 26 in four months. Geez. Wow.

There's four both losing streak since, uh, boom. Since going back in, uh, 19 late 19 through the March low we're on a big four month losing streak here. So. Maybe, maybe you find a bad habit better October 1st, four months losing, losing streaks. Chrissy Mac wants nobody. Zoom zoom made a new low on Friday. It made a new low, not all time.

Well, but new whoa. Over Kathy in this one, probably buying the dip again. We've we've, we've talked to him. The one trick pony. They need another trick. They don't come up with a trick. You got, you know, obviously zoom, it's a verb. They've done come up with a great product, but they need more products justify this crazy valuation.

I, you know, it wouldn't surprise me if this is eventually under $200. I said this one was $500. I said it was actually when it was going up when I was $400, I thought eventually is going to come back to 200. So I was wrong for awhile, but I'm starting to be. I just think this was your classic pandemic stock.

It was classic money hiding, you know, that we're all going to go zoom, everything. And now there's competition for zoom. I mean, we use zoom and now we're not using it. We're using a lot, you know, we're using a different product as well, stream marriage. So, I mean, there is competition coming. They need to have a new product and that might kick start again and tell they come up with something new, um, staying away what they supposed to get in like to the phone business or something.

Which is on business. That's mostly support levels down at two 30. So a rock solid reason. I mean maybe if you just want to try and buy this on strength, you know, say, Hey, show me, you can hold two 80. That doesn't look like that's happening anytime soon. So in area, forget to retrace, been here and already took care of that.

But, uh, next monthly law there's actually, if you want to target an area, uh, 2 30, 3 and a half, uh, that splits two loads from July and August of last year. Two more stock. Oh man, this is going to trigger you. I'm sorry, Dennis. But Madea is saying it got to hard to like do we, do we talk about this every other day?

This is a social media. Stock that continues to get pumped on social media. I know nothing about the company, but I've said before that a lot of these stocks that are being pumped on social media, they get the lift when the pumpers are out there and then eventually they start to seep and they start to leak.

And we've set a lot of these actually come back to where they were from. I know nothing about this company. I know nothing about the fundamentals. All I know is it shows up on my Twitter stream or like my Twitter, everybody talking about it. And people asking me about it, like typically, you know, cause I talk stocks, I get asked about stocks, you know, through Twitter, through different medias every single day.

This is one I get asked about all the time. And it's because there's so many people talking about it in social media. I don't know if it's on Reddit, discord. I put a group it all together. But when you got them all talking about it, they get the big pop. And this is something we're going to talk about in August.

They get the big, you know, they get pumped up and they go on the go and they everything's hot. Everybody's talking about it. And then you have the little bubble. And then you re you typically see, as you get a little left and this bag will, let's get a little left and back, let's get a little lift bag holders, and sometimes you can get another lift and they can get above those highs.

I tend to think that the stock, you know, it's like a wish like a top-down and you know, now, you know, can, you can look at wish making new all time lows. I mean, these things tend to go back to where they came from. So I don't know it's up 20% this morning. If I was in it, I'd be selling it. But again, you know, I've, you know, obviously a couple of hobbled up walls, AMC and GME, but there's so many of these smaller plays that I think are just fades on these pots.

I'm Joel people in the chives saying this is a technical breakout. This is the, like a stock that trades. It looks like a stock that is parked on social media. That's what it looks like. And I'll just give you just a straight levels, not the, but the levels a 7 88 boom years, September 20th high, you did get to eight bucks so longer.

It takes to take out 7 88 to eight new pre-market. I then, uh, I'm with Dennis on the phage rates. It's broken trend now. I mean, you're going to get these lifts because as people get hot again, I don't know if it's on red. I don't know what I I've no idea what the catalyst here there is this morning, but I've seen BBI G pop and it pops into my big gainers and it has these big pops and the last few weeks, every pop has met with more sellers.

I, I th that's all I'm saying is I think if you're in these things, I'd be looking for an excellent and also my opinion. Yeah. And also this area was a place where they originally tried to support it to, uh, before it broke down under six box. So yeah, people that were trying to pick a bottom here got the rug, pulled out old, old, old support, new resistance.

So give us one, give me one. I'm going to hop off. I got to go. And he was for real stocks. He says, uh, what do you want more for you? Yeah, let's do pen. All right, let me, I got it. I'm looking at it. And you know what? I was looking Penn draft Kings, Penn draft, Kings Penn draft Kings on Friday. I was like, I want a little more exposure to the online gaming.

I'm like, I'm going with the pure play. I went actually with DraftKings this time. So I've played draft Kings a couple of times. It's come down in the mid forties and I've been able to flip it out in the mid fifties. I might early on it, maybe, but it's been, I think it's oversold here now. I do see some support coming in at this 50 51.

So I'm going to draft DraftKings on Friday. Okay. So yeah, I bought drafting. I couldn't decide, I was looking, I want to buy Penn or draft Kings Penn or draft Kings. I was like, I was leaning. I was like, I didn't know. So anyways, I wanted some more exposure here just in my, in my swing and slash long-term. I would love to hold draftings my long-term portfolio too, but the valuation kind of gets me there.

So I just think it's oversold and yes, I am trying to catch a falling knife. So this is not a, you bought a Friday. Uh, I bought off these lows and I'm Joel was still here. He'd be seeing there's a lot of lows that we had back in August 50, 72 17. I'm saying it's the first time down here. I think it could bounce out of here.

So, um, if it starts to cut under 50, I'll cut it. So this is why it's a swing trade. So if this thing doesn't respond well here today, I'm looking for a nice response here in the next day or two, I'm looking for it to get support where it got it back and mid August to see all those lows and looking at it.

I drew it. That's why I'm saying we've come back down to the point where we broke out from originally. And I'm saying it's shit. You know, if you're thinking technically first time down here, it could bounce here. Nothing should, nothing can for sure. But it could bounce here at these old lows that.

Gambling on, on the Kanji, but I'm absolutely trying to catch a falling knife, buying a stock, making new lows. So I probably will lose on this trade because I'm breaking some rules to buy them. You probably want, you know what, I just think it's oversold and I think it's due for a bounce. All right. All right, Dennis too, though, I do like pen pen.

Uh, I wanted to buy it in the low seventies and I got, you know, I was actually going to do it a few days ago and then I was like, I didn't and then bounce, bounce up to 75. So I don't know. I I've sold my pen when I had that big move from 65, I got to like 82 or something. I just thought it was too much too fast.

I want to rebuy the shares that I sold, but I should have rebought at 70, in the low seventies. I'm mad at myself that I missed it now at 75. So we'll see if we get a pull back. All right, Dennis Dick, have a good rest of your day. See and see you tomorrow. Let's talk. IPO's guys. We got mad at. Wait, there's Matt Hammond.

There is good. How was your weekend? How was your week? Uh, last week was just even better than the week before. Uh, not so many blockbuster names, but the ones that we did line up or such high conviction plays that I was able to make kind of large take large positions and take hefty profits. So, you know, that's always a set up for let's quickly recap.

Let's quickly recap with them and then look ahead to this week. And how are you getting these IPS? All right. There are actually some quite a few potential winners. Um, FreshWorks was one that we definitely called out and wanted to play. I did pretty well as a 15% really earth company kind of surprised us.

I didn't play that one. And it took off right off the debut Argo blockchain. I think it was a 25, 20, 20 5% winner. I forgot to put that in there. Um, that did well, Clearwater analytics did well, but E-Trade, didn't open it for 12 minutes now. And like started trading. So I didn't chase that one. And the one that brought the, you know, the large windfall was Q health, which we called out.

And then during the week, I just kept telling people I'm selling, you know, freeing up cash to go on a big play on Q health. This one has all the right ingredients. And since we only have about four or five IPO's this week, I did want to review one thing, which is, you know, what do you do when you end up getting into a trade that goes down?

How do you salvage? Cause I, you know, that there are strategies where I've been able to consistently turn, you know, initial losses into wins or salvage a breakeven. And I think it's an important strategy to understand if you are going to make these IPO debut plays. So first, just quickly, uh, 30 seconds on each one of these fresh, fresh works opened up at 43 12, we got the right debut price we wanted, we didn't have a super inflated premium.

You know, the target when you scan an open at 43 would be 50. It hasn't quite broken 50, but you did have lots of opportunities to take some money off the table. I exited most of my positions. Uh, between here and here, and I'm still holding a little bit more to see if we can get a, a run later in the, in the upcoming weeks.

Uh, this one brilliant earth didn't expect it. A lot of the, there were about three plays that were more or less retail, uh, companies, AKA B RLT. And, um, the other one was a T H R N. And, uh, these were kind of retail plays, aimed with products aimed at gen Z and millennials, which I don't really know a lot about.

And it didn't seem like they were getting a lot of hype. This one, I ended up running pretty hard, but then. You know, price below range, uh, then debuted below the IPO price. So that's a pretty good setup. You're going to see opportunities to take cash when things are so, uh, beaten down on the debut. A lot of times people say, okay, well I liked it before.

I definitely like it now. And that set this into an immediate spike. If you played this one took profits right away, that was a great mood. You held out even longer, even better. But if I had played this, I probably would have taken everything out on the initial spike simply. I didn't see the, I didn't see the setup and it came back down to about 15, uh, on day two.

So take your money and run or go blockchain. This one was on watch. It was an uplifting. I'm still not convinced that up listings are consistently good plays. And what I researched. I remember I saw this in the research and then went back and confirmed it. It didn't really strike me enough at the time to make sense of it.

But next time I see this kind of setup, it will be, uh, you know, an indicator that it might be a good thing to play. Uh, first of all, we had crypto mining. That's pretty popular topic these days, whether crypto is up or down. Um, but the thing that stuck out was that for the OTC shares, uh, that were trading at over $2 on IPO day, you get 10 shares of Argo blockchain for every one share of the OTC.

So if the OTC is trading for two 20, then you would say, okay, well then Argo, blockchain should be fairly priced at like 20, $22. So when it debuted at $15, and then especially when it dipped, it's kind of like, huh, well, there's like a lot of value for it to make up between where it's opening and where it's going.

And sure. This could come down. The OTC could come down a little bit, but there's still a lot of room for this to move up. And I think people who, you know, were already in. No, it wouldn't be, you know, I don't think they even had shares quite yet of the, you know, the, the NASDAQ traded stock. So this one moved up and it was a pretty good play if you took it.

And I'll be looking at that for up listings in the future. See when this was a little bit of a tricky play, uh, I was locked out of it and I know a lot of other people were because each trade didn't open it up for trading until about here, when it already spiked up and come back down. Um, but this was a, a stock that I liked.

I didn't love the, uh, float was about 30 million shares and there were other stocks, specifically health, uh, Q health HLT ed H, which were debuting at about the same time. And I found that concentrating on a sure winner is better than, you know, splitting your efforts between one that's you really like, and one that, you know, you don't think it's bad.

You think it's a good opportunity, but maybe not as strong as what we saw here, which was health, uh, Q health HLT H uh, this was just a home run set up. I mean, it was. COVID testing with the platform for at-home testing across a, you know, down the road of testing, pregnancy, fertility, health issues, other things.

So there was a good story there. Uh, there was a lot of social media buzz and they have really high profit margins. The float was only 12 million shares. And then the kind of the cherry on top was that it priced mid range and opened, I guess I, yeah, price mid range actually priced at 16. I re I put that wrong number.

So when it debuts it a tiny premium, and there's all these people who are interested in it, they're not going to get turned off by paying an extra 75 cents on top of that. So, you know, I went in big here, took a little bit of profits out at a 20. I could feel that this was going to at least touch if not break 20.

So around here I had a limit order at 1985 or 1995. You want to be a few cents just in case 20 becomes. Uh, sealing and it bounces off that too hard, but you take profits on there. And then the rest, when I see that second leg up like that, that to me is time to catch out. And I cashed out at about 22. Um, so I, my average out was 2150.

Um, maybe you hold it here and see if it goes up further. I know in free market today, it topped at 2145. So maybe it's got some more room to run. Uh, but this was just, you know, a great setup, great feeling to just, you know, within one hour to bank, a 30% profit on a big, you know, play. And this is exactly the kind of thing that I'm looking for.

The biggest names are not always the big profits, but the right setup is, you know, is sure things I've ever seen in the stock market. Uh, so the thing that really struck me last week was, and I feel like I'm continuing to develop my own discipline and talking to people in my group. You know, we're, we're all starting to learn a little bit more that you really don't want to.

First of all, you don't need to play everything you want to pick your target. Uh, they're not all going to be monster money winners. Uh, you also, so I've always said when in doubt, sit it out. But some things that really helped me are the idea that I don't say out sell on day one for a loss. So some people do, but I do not set a stop loss below my entry point.

I want to take, uh, give it a chance for that day to media cycle. And that paid off with a couple of plays that we saw. Uh, the other thing I try to do is if, okay, ask you about that a little bit. So yeah, that's it, you're never selling on day one for a loss, but you're selling on day two for a loss. Uh, if I have to, yeah.

Or I will sell for a slight loss. Um, so, and I, I go through three examples from last week that kind of show this, uh, ideally I've stayed out of things. I think. Of pure play. IPO's the only one that really just gave me no quarter was a coping. And the key statistic that I missed there was it, they had this five day lockup period hidden in the that if it prices reached a certain price over the IPO price, which it did on the debut, that, you know, a huge number of shares could be liquidated within five days.

And that plus I read later, or that later that day of the IPO that they had kind of treated a lot of, they didn't do a normal distribution of the IPO shares to the institutional buyers. They hand pick their favorites. And I think that the other institutions said, all right, forget you. And I think they're still being punished.

I mean, the stock debuted, it's something like 65 and it's now trading under 30 and it was pretty much a, I mean, it's the only one I've seen. That absolutely tank the whole way. I mean, there was, there was no way to take, to turn it into a profit and every other one has shown this kind of, even when they dip hard, they baseline and then they tail up, maybe not to the debut price, but pretty close, uh, either at the end of day one or in the opening hours of day two.

And that's it. And the other ones that have kind of hovered below have later, you know, a month later when the media, uh, lock up period, the, you know, the press release lockup period or silent period expires, then they've come up. We're talking more about, these are generally happening on the blockbuster IPO's, um, the ones that, the brand names that you've heard about the ups, you know, it's almost like an Icarus effect where they fly too close to the sun.

They hit this melting point a rate on the debut and then they just crater. So now I don't use stock losses on for day one. I will use soft losses to exit for a win. I love the trailing stops. Um, but if you average down at the baselines, you can often get your, uh, you know, your price, you know, your price point down to a level that it reaches that when it, uh, rebounds at the end of the day on day two, uh, the hardest thing is that it's hard not to get greedy when it starts coming back to break.

Even you think, oh, maybe it'll run again. And we saw with stocks like unity and C3 AI, they did big tanks off the debut on day one. And they rebounded towards, you know, towards that debut price at the end of day one. And then on day two, they climbed up to the, you know, up to my entry point. I got out, uh, for like very small ones.

And then they just see AI went from like debuted at a hundred drop to like 90 came back to a hundred and the first, I don't know, 20 minutes and then ran up to 130 later in the. Yeah, so you kind of kick in yourself, but at the same time, I've seen more often than not. It just touches and drops. And that's just the worst feeling to have been able to get out, gotten out for a non loss.

You've you've just with the exception of Coupang you said you've generally just avoided IPO, is that I have just tanked off the, yeah. I mean things like, first of all, I think if it has a, the signs that show that it's going to tank are things like a really high float. Um, so that's, to me, something I'm always very cautious applying.

Um, and other than that, if it's, if the floats not out of control, then you really want to watch for. Ridiculously high premiums. Uh, and that's what I'm going to show you here that we saw. I think when we show the examples, um, it'll be a little more clear what I'm, you know, what I'm talking about here, but I've taken very few losses and the losses that I did take take the, and the other two kind of that are burned in my head are Bumble where I had, you know, two or three days where I could have gotten out at a profit, but I was on vacation and being stubborn and, um, know, ended up holding, you know, beyond the period where I could have taken a profit and then a Coinbase, which wasn't even an IPO.

Again, it went up off the debut and I said, okay, well, I'm gonna sell some of it as an IPO play and I want to hold it. So I made a, I did take a win on the, on the shares that I played for, you know, off the IPO debut debut at like 3 85 or something. I sold it 400 and then four 20, and then I wanted to hold the rest.

I thought, oh, maybe this gets like social media buzz and becomes a meme stock or something, you know, instead it just crashed. And then they did a private placement and, uh, you know, it was, it was a meltdown from there, but it wasn't the IPO play that went, you know, that went badly. It was the long-term play that, uh, that didn't work out.

Um, and then the last thing is like these, especially if it's not a super big name, if it's a name that I've played, because I liked the way the company sounds, they have good financials, but it's not a brand name. It's not something that a lot of public trader or retail traders are aware of. Um, some of these were like duck Creek DCT and.

I forget some of the others, but some of these have like, they've gone down like one or $2 from the debut price and just kind of held there. And then when the silent period expires, which is about 30 days, then they, you know, often report earnings at that point, analyst coverage comes in and then we see like people wake up and like, oh yeah, no, this is a good strong company.

And then it'll, and then it'll make its run. So I have gotten bailed out, you know, later on, on some of the silent period ones, but that's not typical to a even Bumble. If I held out, you know, a few more days, I just, I wanted to, I, I got fed up and went into, um, roadblocks, which worked out really well. Um, but even that, once it released its first earnings had like a brief spike back up to the debut price.

So that silent period lockup is kind of like the last bailout. And if I get, if I'm still stuck after that, uh, I'll probably wait for a really hot play, like HLT H yeah. Drop all my bags leading up to that. So I can put everything I can into, into a plate like that. So I'll burn my bags. Uh, when you have a home run set up and people tell me, oh, I'm you, I can't treat her right now because I have too many, you know, I'm holding bags and too many positions of like, well, here's this one coming up?

I'm going, I'm, I'm dumping, you know, I'm burning all my bags right up into this one. I mean, I sold out of something like 15 or 16 positions where I was either up and didn't think it was going anymore or down a little bit, um, and went into HLT H and made all of that back plus quite a bit. So I use these kind of like home run setups as a way to clean out my portfolio.

Uh, you end up holding the bags and selling, you know, especially in this kind of trading, you end up holding the bags and selling the winters off. And after awhile, your whole portfolio is just red, um, positions where you're down, you know, and usually not much, but, uh, where you're down and you're like, wow, you know, these aren't going anywhere.

Um, you know, if I'm only like 5% down, but if I take out this money and put it into a play where I'm going to probably make 20 or 30%, that's a great opportunity to free up your free cash. Um, so tell us was a really good example, toast debuted. I think that, you know, the IPO range started at like 32 34, then they raised it to 34 36, then they priced the IPO at 40 and you're like, well, I know toast is like a hot, uh, product, but people know, yeah, it's a name that people know a lot of people like it it's, you know, kind of FinTech, you know, being compared to square.

Um, you know, and I was kinda like, well, you know, maybe if it debuts in the kind of like low fifties, it's a good play. Um, but then it, you know, the indicator started at 60 and got moved up and moved and then 65, you're kind of like, wow, is there that much demand that I really miss something or is this way to, you know, as the price way too.

So I ended up playing this one, but not, I kind of undercut the bid, but even then I undercut it too high. Um, but then, you know, as we sort of after the fact and say, oh yeah, well, uh, it just, you know, dropped it. Wasn't going well, what was it? Wasn't moving up. There's no more room. There are no more buyers that wanted to pay upwards of 65.

And it kind of like very quickly did these kind of spike recovery like recovery, but no recovery just to VUI. So it just stayed below view app all day. Uh, but the thing to do, if you can discipline yourself on this type of play is to buy up on these dips. So 60 was kind of like the baseline at the bottom.

And if you picked up a few shares down here, you brought your cost average down to say 61 62. And then at the end of the day, it runs back up to 62. You can take profits there, you get a little spike rate here. And one thing I like to do when I'm trying to get out of a position that I'm where I'm stuck is instead of using a trailing stop loss, such a target with the limited.

It will help you, you know, if you get it, especially on day one on a little spike, if you get out there, great, you know, you say, okay, well I said it right at, or just maybe a little bit above or a little bit below, depending on what you're seeing in the level two data, uh, you set your limit order to just bail you out.

And if you get that spike, which you often see in the final minutes, you're happy you walk away and you go to sleep. You know, nicely that night I ended up having to hold through day, you know, the, the day to media cycle and was able to get out. I think I was at 64, 55. I ended up taking it out at 64, 25 or something.

Um, so I took a slight loss that's okay. I could have held for, I think it touched just under 64 94. Um, but you know, you, don't, the point is don't be greedy. Don't expect this to keep climbing. If you see this morning spike, which is what I'm looking for to get out of, just get out know, are you going to get hurt?

So when day two is a disaster, trying to average down your position, Uh, and look for that end of day run or that day to media cycle. And more often than not, I'd say eight times out of 10, uh, you're going to get the opportunity to take, you know, you know, kind of pack up your bags and, you know, gracefully exit the, you know, and, and, and what about those other one to two times?

I mean, it's a, it's coping and you take the loss and you just say, well, screw it. And on the other, I mean, I've played what a hundred or 100 or so IPOs and had one mass, you know, one bad loss and the others I've had other losses. Uh, but they were all I had. I followed the strategy would have been fine. I think the other one was ABC L and that one, uh, actually I broke my second rule of trading these, which is don't chase.

If I don't get the debut, don't get back in afterwards. Cause it opened up, uh, went up into a halt, gave a great, you know, an easy 10% exit. If you traded out of that halt, I said, oh, it's hot. And I bought out with. And then it went down and I didn't average down. I didn't get out on day two when I could have, I mean, it was just, I broke my rules and I paid the price.

Um, here's another good example of one where engaged, smart. Uh, I liked this company. I liked the stock, but I didn't like the debut price, so I just sat it out. Um, and that's something I'm getting a little bit better out is, is letting some of these paths. But again, it dropped. And if you add it here at this baseline and then said, okay, well it dropped a little more.

Maybe I add a little more here, you know, then you're given the opportunity to get out even on day one at the end of day, run here a day two, you'd have been feeling a little bit of heat there, but if you really held out, if you didn't, you know, say, well, I'm taking this loss, you're given a chance to actually take in high win would be hard to hold all the way past this spike in.

But, you know, there are opportunities. And if you've, once you've played enough of these, you start to realize, wait, this isn't going to crash down that far. Right. But then we have something like this one, which was really like, Remitly, this is the one where you just had no real opportunity to save yourself.

Maybe you act an average down and down here, but then you're still having to get out at a loss. Just never came back. But this was not a stock that you should've played. Um, it opened, you know, really high premium for a company. Isn't really that interesting. And, uh, this is where, you know, your, your research and your due diligence.

And you're looking at you reading about what are people saying about it on social media? There's nobody really raving about it. It's not really that well-known, they compete against PayPal products, zoom, they compete against TransferWise, which is, you know, has a big headstart on them. And there's just, you just shouldn't have played this one.

So if you get stuck in this one, you kind of got to go back to the drawing board and learn from it and say, wait, why did I, why did I play this one? Um, so you can't always bail yourself out, but you know, and this is an example where you wouldn't be able to very well. Um, but there are, I guess there was a spike here, right at the end of the day, if you had averaged in right here and just said, okay, well, I'll take whatever I can get right here.

Um, maybe you save yourself, but you're not always going to be able to. I wish there was just a, you know, a magic pause button or, you know, to turn off the game when you don't want, when you're losing. Um, but I just want to be real that there are a lot of opportunities to save your position. This is one where you just got yourself into a bad play to begin with so quickly run through these because I know I spent more time on that than I wanted to, and I will send out the newsletter sign [email protected].

Uh, the newsletter go tomorrow. Um, amplitude, Warby Parker, all these systems. Okay. Amplitude. I like this one, except that it's 35.4 million shares. Uh, they're a SAS digital marketing optimization software. They have. Brand name Atlas clients. They're moving towards net income positive and cashflow is a direct listing.

Uh, direct listings are tricky and, but if the S if the float really is, or the shares out really are just 35 million, I'm going to do more research. Then that's not a bad float. That's not like 77 million shares. As we'll see with Warby Parker has 1100 11 million shares outstanding, and they're raising money through their IPO, which is a new rule that wasn't available before they have great, uh, profits and revenue.

This is eyewear company, but the sh float to me is too big to play. So I'm not going to play this one unless we see a big dip. And even then I probably just won't, won't get involved with this one. All these systems, pretty low float, uh, They are SAS investment management software for institutions, but revenue and gross profits are really like not accelerating as fast as they were a year ago.

So I don't think it's that interesting. I mean, up 57% revenue in 20, 20, 40% in 2024 gross profits. But those came down to just 14% revenue in the last six months and 9% gross profits. So those are, you know, shrinking revenue and growth, profit growth, not a great look for an IPO. Um, so I don't know that one doesn't is not that exciting to me.

All the Plex holding, I don't know anything about hair care products, but this company is growing like crazy. Um, and as far as I know, women care a lot about their hair and so to men, um, but women are a huge market for this. But, uh, the purpose of the IPO is stated in the S one is that investors are wanting to cash out.

So, you know, when you go to sorry, not in the S uh, I can't and I read it in another article, but it said that, yeah, the purpose of the proceeds of like, the reason is like, basically, because they don't say it real, holy red flag, Batman, they don't say, oh, the investors want a cash study. They say like existing shareholders, you know, desiring to liquidate assets, or I don't want to say that part out loud.

Okay. Yeah. They have to, they have to, I mean, they, like, there is in the estimate, what are you gonna use this cash for? Why are you doing this? And they're basically saying, well, we're just selling. Cause we want to make mom like take money out. So when they're doing that with 67 million shares, it's like, No, that's a lot of shit.

You know, when an IPO has any kind of float, you don't know what's gonna, you know, who's going to be, how many of the shareholder's going to be holding up this one? It seems clearly they said, Hey, who wants to sell their shares? And a bunch of people put up their hands. And, um, you know, that, to me, when it's 67 million shares is a time to say, Hmm, I don't know anything about this IPO, but even if it was not to, you know, give liquidity to existing shareholders, 67 million shares, I haven't seen any with that, you know, with that many shares do particularly well.

There's just not enough demand to, uh, to outpace supply. Uh, first watch restaurant group, some kind of breakfast, lunch, casual dining restaurant, you know, based out of Florida, rebounded from COVID, but still like facing headwinds. Uh, the financials for the previous 12 months mean nothing because they're all ending June 30th.

So you're talking about June 30th, 2022, June 30th, 2021 versus. You know, a previous 12 months that includes, you know, what, four or five months of COVID lockdown. So those numbers might look impressive, but they don't mean anything to me, a low float of 9.4 million shares. I just, you know, it's a restaurant group.

I've never even heard of this. So I hadn't heard, I mean, I'd heard of Dutch brothers and that was, you know, but that was coffee. This is breakfast, breakfast and lunch. And, uh, the last one healthcare triangle group, this one's being offered on Weebo and elsewhere cloud data management software for healthcare sciences and organizations.

I mean, those are good buzzwords, I guess, uh, the revenues up 20% for six months at it, you know, ending June 30th, gross profits up 32%. Those are strong numbers, operating loss, net, negative income and negative cashflow. Those are not the number. The, you know, those are not the lines we want. Um, the only reason to look at this one as it's an 8 million sheriff.

So in another IPO's this week really stand out for me. If I had to pick one, it would be, uh, probably the amplitude, uh, you know, the amplitude listing. But this one's one to keep an eye on because it's a $5 IPO. Uh, these sometimes if they drop down to four, everyone says, oh, low float, jump in, buy, and then you'll get one spike off the author.

Deb, you can cash out for a, you know, a little 15% win, but you're not going to have enough conviction to make it more than what are you gonna play? 500 shares, a thousand shares off of it. You know, you make maybe 500 or $1,500 thousand dollars. That's. It's hard to justify spending all day doing that, I guess maybe it's not always, but, uh, nothing too interesting this week.

I would probably continue to just manage my portfolio and get rid of, get ready for some of the other, which means we've got a raft there's L T H and interesting to see what this one does today. All right. On a carry on from Friday. Thanks Spencer. Have a good week. IPO warriors.com. Thanks a lot, sir. Let's wrap it up here once again.

Ben, think of small cap conference, BZ, small cap.com this Wednesday and Thursday. Learn more about that. Thanks to our guest today. And Tim, thanks to all of you in our chat. Smash that like button, please. Thank you. And remember that all the information from our show is meant to be used as informational purposes, not for investing or trading and voice.

The stream is going to end. We're going to do a special show today from nine 30 to 11, Neil Hamilton and mark Petrino are previewing. The Benzinga trading school, which opens today. That'll be followed by SPACs tack at 11 o'clock. So stay tuned for that. Everyone have a good rest of your day. Good luck after you open stay green.

I'll see you later. Well,

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