frankz

The FANG stocks have under pressure. Lately, they had a big sell-off that was followed by a small bounce, and then they sold off again. It's probably not a big deal, but the price action in these stocks before this week was very smooth and now they are loose and volatile. Typically, or at least in the past went the price action goes from smooth sailing to loose and volatile it signified a trend change, we'll see.On another note, I still continue to see decent swing set-ups on the long side from smaller mid-cap names. Part of the reason is [...]

The Fed will announce a possible rate hike today, the consensus believes they will raise rates by a quarter of a percent.  No one knows how the market will react but here is how the SP500 reacted the last three times; 12/16/2015, 12/14/2016, 3/15/2017. One big pullback, two shallow ones. The good thing is, that we don't need to know.We are also coming into the second half of June which historically has been weak. Here is how the average June has played out since 1950 and in the past 20-years, chart by Ryan Detrick.On the bright side, the Small Cap index (Russell [...]

It was a TECH risk off day, the Nasdaq Composite sold off hard on huge volume, the FANG stocks had a tough day, and Amazon had a flash crash. Amazon dropped about 34 points in a couple of ticks. Pre-market it seems like the pressure is still on the tech names, many are bidding down.The tech sell-off coincided with Citron's research cautious tweet about crowd favorite NVDA. The tweet reversed the stock from an 8 point gain to a 10 point loss on 92-million shares which is about 4-times the daily average.For the old school home-gamers everything looked fine at the [...]

When I get involved with a swing trade, I want the trade to work immediately. You want to look for a stock that has momentum and then is going through a consolidation period with very low volatility. You want the candles to get tighter and tighter as the days go buy and you want to jump onboard at the first sign of expansion. Buy them tight, sell them loose.$KEM, $ALGN, $OLED, $MTLS are good examples of what I'm talking about.They are not always going to work like this, but it's what you should expect if you buy them right and [...]

I’m always intrigued by huge bases, typically a prolonged period of contraction leads to a prolonged period of expansion, hence the term; the bigger the base, the higher into space it goes.  We’ve pointed out a few bases over the last few years and have done very well with them. These huge bases don’t show up on a regular basis especially after a long-running bull market, but when they do you have stay on top of them because once they emerge from their bases (stage 1 to stage 2), they usually do very well.  Two recent examples that we flagged here [...]

The Russell 2000 led the way higher yesterday with a gain of +1.93%, made breadth great again and this happened.The sectors that have been lagging for weeks were the best-performing sectors yesterday; Bios, Banks, Energy, Small caps. Facebook, Amazon, Apple, Google, Netflix, Tesla, were down for most of the day until a late day push (Netflix and Tesla closed lower).Risk on happened real fast, the key will be follow through, the Russell 2000 has been stuck in a range 6-months and now is testing the upper end of its range.$KEM, $SGMO, $MZOR, $TRVG, $BZUN, $WKHS, $GRUB, $PDLI are the stocks on my [...]

Underneath the surface the market continues to deteriorate, 1-month new lows and 3-month new lows continue to expand. The Nasdaq Composite is nearing all-time highs but yet the ten-day moving average of 52-week lows minus 52-week highs is almost at breakeven, but FAANG-T is doing well, and the indices minus the Russell 2000 is masking all the weakness. Negative breadth divergences are not really actionable, like everything else in the market, sometimes it works other times it doesn't, but negative breadth divergence is weak signal more often than not.Regardless, we still have some decent set-ups, and we have to give stocks [...]

Many are in disbelief of the market action, the indices continue to print highs while a majority of stocks are not following suit. It feels like a lot of money from small caps, energy, banks, biotechs is flowing out and flowing right into Facebook, Amazon, Netflix, Apple, Google, and Tesla.As the Nasdaq Composite prints new highs every day the ten-day difference of Nasdaq stocks new 52-week high minus 52-week lows prints new lows.We have 531 stocks up 25% or more in the last 65-days versus 506 that are down 25% or more in the last 65-days. That's pretty even for a [...]

$STDY, $PULM, $CGIX, $HIIQ, $BCLI, $CBAY, $RARX, $IPXL, $PDLI, $ZTO, $CMTL, $DXPE.I have an interest in these stocks on the long side if and only if they go through yesterday's high plus .10-cents. This single criterion will narrow down the list and get you involved only in the stocks that are on the move. The primary drivers of stocks in the short term is momentum and mean reversion. Stocks that have a significant move in the short term tend to rest and move sideways for a few days and then resume higher more often than not. These momentum bursts typically last [...]

After non-stop talk about how low VIX  has been unexpectedly we get an enormous 1-day spike +46% to be exact. Summer months tend to get volatile so volatility might be here to stay.Yesterday we printed 1,109 new 1-month lows when we get these 1-day spikes in new lows we typically get a couple of days of positive volatility in individual stocks as you can see in the chart below.Click to ENLARGEThe red line graphs 1-month new lows and the white line graphs the number of stocks that moved +4% or more on that particular day.  Spikes in 1-month lows typically leads to spikes [...]