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Newsletter - 8/5/2023

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Blow off top incoming delayed!

Bears are waking up. Maybe.

Friday was profit taking primarily but if you have been paying attention you know that I think the whole "recession is done" and "rate hikes are done" storylines are bullshit.  But as with any macro data, it takes time for reality to affect the dreaminess of a bull market.

I am not saying we go straight down - the market never does.  But depending on next weeks price action, we could be at the start of a bigger 5-10% pullback.

PREVIOUS WEEK MARKET:

All that matters to me is Friday's close.  What happened the rest of the week is immaterial to me because Friday, for the first time in months, both the SPY and the QQQ printed weekly reversals.

To review, a High Close Doji is when there is a doji at a high price point and within the next 2-3 weeks, price closes below that high doji low.  It is a high probability strong reversal signal.  And we got one on Friday.

Now, since this week was a big red candle, I would expect a retracement of price up to between 50% and 75% of last week's range.  Anything more than that and the reversal becomes less likely.  However, if we get that, then I intend to ADD to my SPY puts and let the probability of the pattern do its work.

It's important to understand the structural damage that was done to the short term bull case.  Two weeks ago the markets topped out and then this week, sellers were able to drive price down below the lows of two weeks ago.  That means that all those buyers who pushed price up are probably nervous about their long positions into the weekend.  All that matters to me is if there is a continuation Monday or Tuesday.  If we don't see that then it was a fake out.  For sure today's selling was real; it was profit taking based on recent gains.  I don't believe that there was any selling based on an expectation of the economy or interest rates.  IF that starts, it will turn into a full fledged correction.  For now, its a trading event, and nothing more.

SPY confirmed a WEEKLY reversal - very strong.  Now, as with any trend reversal, we need to see followthrough.

 

Short Term: Bearish

Mid Term: Neutral

Long Term: Bullish

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CLOSED TRADES THIS WEEK:

We closed the following trades this week:

  • INVZ calls: +125% (4 days)

  • ALTO calls: +52% (21 days)

  • CG puts: +50% (8 days)

  • INVZ calls: +190% (6 days)

  • DCFC calls: +39% (70 days)

  • CANO calls: +25% (45 days)

  • NKLA puts: -55% (9 days)

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TRADE IDEAS:

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If you are not a Member and want to see these, become one here.

MODEL 5K PORTFOLIO:

Since May 9, here are the numbers:

  • Total Return: +107%

  • Win/Not Win = 56%/44%

  • Average Win = 116%

  • Average Not Win = 50%

TRADE UPDATE:

CTXR

Bad news this week so this will be a total loss on Monday BUT it was a Lottery Play so smaller position.

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UPCOMING WEEK:

Instead of an Economic Calendar, I will be posting MY schedule in the Boardroom as well as position specific dates.

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I will be in the Boardroom:

  • Monday: 7:30am to 12noon MST

  • Tuesday: 7:30am to 12noon MST

  • Wednesday: 7:30am to 2pm MST

  • Thursday: 7:30am to 2pm MST

  • Friday: 7:30am to 10am MST

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Earnings this week:

  • 8/8: NRDY - amc

  • 8/10: CTXR - amc

  • 8/8: KODK - amc

Congratulations to ECHO and SEALERWHEELER for becoming Trader Membes and taking a huge step towards learning how to fish and stick it to the man!​

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If you are interested in taking a huge step forward toward profitable trading, then sign up for a paid membership HERE!

AUGUST TRADE CONTEST UPDATE:

THERE IS STILL TIME TO GET YOUR ENTRIES IN!!!  

HERE ARE THE DETAILS AND RULES!

YOU COULD WIN $200!!

  • HONGULATOR: BJ Nov 75C - $1.30; current is $1.70; +31%

  • JUSTJAKE: CSCO Sept 55C - $0.65; current is $0.77; +18%

  • ECHODAZE: NEM Sept Put Spread - $0.19 credit; current is $.062; +226%

  • MIKEYLIKES: GME Sept 30C - $0.69; current is $0.55; -20%

  • SEALERWHEELER: SDC Oct 1C - $0.18; current is $0.27; +50%

  • VAMPIRETRADES: BSAQ common - $12.20; current is $10.59; -13%

  • theBoss: NRDY Dec 5C - $0.95; current is $1,20; +26%

WHAT I AM LOOKING AT:

I held off on entering new trades this week as I wanted to see the QQQ and SPY resolve the reversal or not.  Now that they have, I will be watching for continuations on both trends AND if they continue, I will be looking to short some stocks I have been watching.  I have about 120 alerts set up both to the long and short side and I will not hesitate to enter trades once the alerts start going off.  

I am pretty light on positions right now and that's ok - investing is about the ebb and flow of the market and what it is giving in terms of setups.  There are now some excellent possible gap plays and those are at the top of my list.

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NEW TRADE CATEGORY:

I am always looking for trade candidates as you know and sometimes the best ones come from Members.  This week I had a great conversation with SealerWheeler and he explained how he is trading "Meme stocks."

Effectively, he watches sources for stocks that are moving up on hype and then decides to jump on the bandwagon or take the opposite direction.

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I love this idea because it is what I try to do for Core trades: identify momentum and then enter at specific technical points.

However, I will only be SHORTING as I do not want to chase or enter a trade just because others have.  I DO want to short those stocks that have gone up on nothing but hype and social media idiots.

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These trades will be ultra short term - like same day.  Position size will also be ultra small - 1-2% max.  I will be watching for those stocks with heavy social media coverage as well as those stocks that have run up bigly.

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THIS WILL BE A SMALL PART OF MY OVERALL PORTFOLIO AND ENTRIES AND EXITS WILL BE KEY.

  

If you are NOT a paid member, you will probably not even know the trade is on or that I have exited as I will not have time to send an email.  I will only post these trades in the new VIP Trader Trade Alert Channel on Discord.

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I do not view this as gambling because I am trying to take advantage of what I believe are false price movements.  I DO think this strategy will be profitable but as with all my trades, I will be choosy.

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IMPORTANT:

I still would love your input as to topics for blog posts and live sessions.  CDUB has been kind enough to start helping me put some structure into what material I put out but your input would be greatly appreciated.  So don't be an ahole - help me out.

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CLOSING COMMENTS:​​​

  • If there are any stocks or investments you want me to look at, send the to me at info@MrNotAdvice.com.  I will answer them in next week's newsletter.

  • Don't forget the Discord live chat is STILL FREE but it will be closing to new members soon.  In the meantime, come and join us - its the best community out there: Discord.

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Thankyou Family!

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theBoss

Nothing above is investment advice nor should it be construed as investment advice.  It is offerred for entertainment purposes only.  Always consult your advisors before investing any money.  Do not "follow" or "mirror" any trade ideas provided.  Mr.NotAdvice is not a licensed or registered investment advisor.  Do your own research.

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