Weekly Raid #38 - Gamestopped
Goooood Morning Traders and Happy Thursday
Should be an exciting day today. After the Drop after the news yesterday the tape chopped up a bit. Hopefully today we get some trending more exciting action to trade.
News of the day
Again a relatively meek news day.
We have some jobs data up at 8:30 a.m. and I am not positive it will move the market as much as yesterday, but usually initial claims provide a spike in volatility, at least temporarily.
After that, we have a bunch of FED speakers today. Hawker at 10 and then Bostic, Williams, and Bowman all during power hour this afternoon.
Finally, watch the EIA reports that come out at 11. I again don’t have a lot of confidence in the ability to move the markets, but as we discussed yesterday in the macro section, energy is vitally important to the world economies. So keep an eye on them to help keep a temperature gauge on the energy situation.
Macro Look/Big Picture Brief
Today’s Macro look has the big picture next to it because I don’t want to discuss just economic news or potential. Today is personal, I have received a few emails/DM’s from consulting clients about the news, how to prepare for the coming crash, and on and on. These are all valid things to prepare for, but it has to be in context. There are a lot of news stories constantly swirling around about everything from COVID, to Recessions, to conspiracy theories(and not the fun “Bigfoot is real” kind).
One of the most important things to do in trading is to remember your context of trading. We are often consumed daily by the micromovements of the market, but over time it’s one of the best ways to store and earn on your money.
The chart above is a monthly chart from the mid-90s through the present. While all of the drops are scary to live through, if you had invested all of your capital at the WORST possible time in 2000 or 2007/8 you would still be sitting at a 3x on your invested capital. And that number is devoid of dividends.
Sure it may not always be this way, in fact statistically speaking eventually it comes back to the mean which is far below us. But it is not our job to know when that happens because we physically can’t. So focus on capital management, knowing why you trade, and placing small manageable trades. Aim for consistent wins over the multi-bagger trades. Sure when you hit a 1000% gain take a victory lap, but don’t expect it all the time. Keep your management tight, and your expectations in check, and just know that the odds are the market will be just fine over the long run.
The watchlist today is short, I am still watching all of the same stocks I had yesterday, the Uranium plays, GME, and a few others.
In addition, today I am adding NVDA back to the list today. The past several days have had a few additional news breaks about the recent earnings and I think we could see some downside still. After watching the market for over a decade, you cannot convince me that the earnings move was not some huge holder liquidating into retail.
Lastly, I am watching Pfizer today. PFE is intimately involved with all things Covid, and if we see a resurgence, or even a perceived resurgence we could get some movement in the stock. Jumping on my soapbox for a second I think drug companies and healthcare companies in general have done a great job. They have personally saved several family members from cancer and other ailments. But as of the last 5 years, I see them deviating from “health care” to “health subscription” meaning it is all about residual earnings. Because of this, I don’t hold any of these long-term. That said, I will trade the shit out of these names short-term end rant. Watching for a spike back inside the value area on some sustained volume for a move back to POC.
As always trade well and Good Luck