Is The Worst Behind Us In The Stock Market | Podcast Episode #34

0:07
Learn to trade stocks successfully. Learn to profit consistently. I’m Ryan Mallory, and on my weekly podcast, I’m going to teach you the ins and outs of a complex, ever-changing stock market. You will learn to trade better, trade smarter, and profit bigger.

0:26
Now, let’s go trade. Hey, everybody. This is Ryan Mallory doing another episode with you guys here to talk about today, the Fang stalks, and not just FANG but FAANG as, has now become called within. Inclusion of Apple in that equation. Um, yeah, so this has been a really exciting day for traders. Uh, you know, we, we’ve seen a lot of selling over the last two months. The market has really not provided a lot of really good long opportunities. The money’s been made to the short side and even when you’re shorting the market and you’re, you’re making money from shorting the market, it can still kind of get depressing constantly, you know, playing these sell-offs, and it also makes you a little bit leery too cause you know that huge market bounces right around the corner.

1:13
And we got that today, finally. We saw that it came from the Federal Reserve and a lot of times that’s what, what causes huge market spikes is the Federal Reserve and in this particular case, Jerome Powell, who doesn’t really seem to care too much about the effects of the stock market and at least not until today in terms of, you know, his interest rate decisions and how that impacts it.

1:35
So, Now we have a stock market. We, I think we have the Dow like up over 530 points, and we have the S&P up over 40 points, so almost 50 points. So it’s a huge day, huge day for the uh NASDAQ as well.

1:51
I’ll pull up that chart as You can see up 2.3%, 164 points. So a lot of movement and the tech sector is leading the way. You have industrials right behind it. So technology up 2.6%, industrials up 2%, then you also have healthcare up 2%.

2:10
What was more interesting to me than anything was materials because materials was actually like the worst performing sector this morning and now it’s right behind technology at 2%. So, really good day, um, some of these really Depressed sectors like technology, materials, industrials, really seeing a huge turnaround in their, uh, their stocks.

2:31
So, or the stocks that are within those those sectors. So it’s a, it’s a, it’s a pretty positive day to say the least. I, um, wasn’t really sure what we’re gonna get out of Powell because I could have easily have seen. him say something with total disregard to the market and then send it down 40 or 500 points to the opposite side, you know, to the downside.

2:49
And that didn’t happen. He, you know, he’s not really said anything, but Trump has obviously been pretty critical of him in recent weeks and Maybe he blinked, I don’t know, but he, um, he nonetheless gave the market quite a boost today when he talked about how rates are close to being neutral and it basically assures that we’re going to see a rate hike in December, but possibly only one in 2019.

3:15
Obviously, all that can change though because market conditions change, economic conditions can change, and so you have to still play it by ear, but that’s what the market’s going with right now. So, let’s talk about S&P here. We have, essentially, if you ignore this long shadow here, we, you have a bit of a double bottom that has formed in the S&P and a lot of stocks are showing that right now.

3:38
And now you’re getting the, the push through the, um, the The 20-day moving average, the 10-day moving average, it’s holding support at the 5, and now we’re, we’re primed for a retest of the 200-day moving average. It’s, it’s about 30 points away.

3:54
And what’s even crazier is despite all the selling, right now, the market is up on the month. And that, that’s what’s crazy. I was talking about it in the splash, so I was like, don’t be surprised that the, that the Bulls figure out a way to close out this month grain, and yet there’s still 2 days of trading left, so anything can happen, but we’re on, we’re on track to finish the month green despite all the selling that we saw because if you remember back in the beginning of the month, we had that huge dead cap bounce that really pushed the market up high, uh, going all the way until, what was it, the, the 7th of November before the selling continued.

4:25
So it’s just really Um, it hasn’t made up for all the losses since the 7th of September, but. It has done a good job of getting back above where it started the month. So, S&P double bottom, you take the NASDAQ here, um, it actually made a lower low this month here, which was a bit discouraging for those who like to trade the tech stocks like myself.

4:48
Um, I wasn’t really trading heavily in them, but Uh, you know, I like to see the charts remain a little bit healthy and they didn’t. They broke down. So you do have some resistance coming into play. It’s not likely to be tested today, but tomorrow is, is a possibility at 20 or 73, 23.

5:06
And then the Uh, the small caps, which actually sold off really hard this morning, it looked like it was going to drag the whole market lower, is, is the best performing index right now, uh, outside of, you know, the, the NASDAQ. Well, I shouldn’t say it’s the best performing. It’s better than the S&P, so.

5:25
So yeah, another example of a double bottom, it’s just getting underway, not nearly as um advanced as the S&P’s uh double bottom there, but let’s look at the uh Fin stocks. Because you take a stock like Facebook, why is it not rallying today?

5:41
I mean, you would think of all days, it would, it would find a reason to rally, but it was, it was down quite a bit actually today. But this is a bear flag here. I don’t, I don’t like this chart. And so, there’s certain stocks that, and I don’t do it a lot of times, but, um, I’ll, I’ll start to consider them to be toxic and essentially, I just stop, stop, uh, ever any consideration of a trade in them, and Facebook has basically gotten to that point.

6:04
Now I didn’t come off of that list, um, but right now, Facebook is a toxic stock and it has a lot to do with the fact that every time, um, You know, Zuckerberg says or does something, it just kills their, their company and so.

6:21
He’s, he’s, he’s really a toxic, toxic thing to the company. There’s always bad news coming out about the company. And so, You get this where uh the, the S&P, I mean, look at, well, first off, look at, look at the, the difference in Amazon. Look how much that thing has been bouncing. Now, we’ll go back to, to Facebook.

6:39
There’s no bounce. So you have a bear flag here. I would bet more likely it has more downside than upside to it at this point, even though it’s, it’s sold off over what, 50% off of its all-time highs going back to, uh, July of this year, I just wouldn’t, I just wouldn’t bank on it, on anything with the stock.

6:58
I, I do not put it past it to have more downside here. So, today, when you only see a 0.2% rally in this, this company despite how oversold it is, I, I just can’t get behind the stock at this point. So, uh, other stocks that I consider in that category, uh, Tesla, and it’s, it’s not because it hasn’t rallied and, and actually held its own pretty well over the last, uh, couple of months.

7:23
It’s done a phenomenal job of not getting beaten up, but you have the CEO that just says things like 420 going private, funding secured, you know, and, and stuff like that really. causes all sorts of problems for a company or to swing trade a company like Tesla.

7:38
And so I, I don’t, I don’t trade Tesla anymore. Um, there was a time where EDU, these, these online educational companies, and I haven’t traded them since, uh, to this day, but these things can be really toxic and, and I haven’t traded these in a, in a very long time, these education and training service companies.

7:56
So, uh, let’s go back to, um, Facebook, we discussed that already. Now, let’s look at Amazon. I got into this earlier this, uh, this week. I think I got in on November 26th, so that was like a couple of days ago. I, I basically sold it for like a $22 a share profit.

8:17
So essentially 1.4%, um. On that trade. It’s up over $100 since I sold it. However, this, this day here, um. You know, where we see on the twenty-sixth, the same day that I bought it, it, there were some signs that it looked like it might want to give up those, those profits, so I went ahead and booked the gains.

8:38
I, I wish I really didn’t cause the market just kept on rocking higher throughout the rest of that day. Um, however, I have replaced it with a Netflix trade. Essentially, if I was in, uh, Amazon, I wouldn’t be in, still, I wouldn’t be in Netflix. I’m doing all right on this Netflix trade as it’s hitting new highs.

8:53
And the Netflix trade, And I’ll go back to the Amazon trade in a second. I’m just kind of getting distracted from the The Amazon, uh, or with this Netflix trade that I’m talking about here, but. I got in, uh, this one, Let’s see, yesterday, and I got in at 263:40.

9:15
So, you know, I get in right away, right near the, the market opener, so, and it just keeps on pushing higher throughout the day. Today, it, it pushes lower. I actually get stomped out for a 1.3% profit. That’s 26,680.

9:31
OK? And this was about, uh, I wanna say it was maybe about an hour and a half or so before Jerome Powell came out and talked. This thing, this was looking very ugly. I’m gonna pull it up for you on the five-minute chart so you can see exactly what it is that I’m talking about. Um.

9:54
So you see here, we gapped up to like in the 273, 272 range, and then we just started giving it back up. I put a stop below the lows of the day. I said, OK, if it get, get, if I get knocked out, I’m gonna go ahead and take, take my small profit and move on from there. Um, and it did, it just kept on moving lower and lower and then, of course, huge help, you know, shout out from uh Jerome Powell there, um, not Netflix specifically, but the market as, uh, as a whole.

10:15
Sends this thing just ripping. So, I have a decision to make here. I can say, oh man, maybe, maybe it’s a false breakout or not, but the volume’s there, you can see the volume here, the volume’s in the market. So, I had to jump back in. I don’t necessarily like where I had to get back in at. I, I was looking at trying to get back in at 266 or so, and by the time I could get the uh order in, it was already up at 26877, which is where I got in at.

10:38
Um, now it’s at 278.57. Uh, the stopless is still, uh, something I could work with there. And, um, yeah, so I’m, I’m pretty happy with this trade. I’m up about 3.7% on the trade right now and climbing, as you can see there. And then, uh, I already, uh, had Visa in the portfolio.

10:59
This thing has been doing, you know, a real good number for me today at 14051. I got into that one yesterday. I did not get stopped out of it today, so got in at 13607, now trading, um, over 140 a share, so up about 3.3% on that. Let’s go ahead and talk about Amazon.

11:17
Um, above the 20-day moving hours has a, uh, a test of the 200 day at hand. I think, I think the big thing is, is it needs to retest. It doesn’t need, it has to. It has to retest these highs that were established earlier this month, highs of 1,784.

11:35
It needs to get back up there. It needs to test it. It’s a long ways away, still about $120 off that mark there, but it needs to get back up there and establish a higher high. And the reason why I say that is because you still have the stock in a confirmed down trend, and you’re essentially right. Now playing the dead cat bounce in order for that trend to change, this, this high going back to November 8th has to break, and until that breaks, you still have a confirmed down trend in place because you have this lower low, and this is what I, uh, I cringed when I saw it do this, but had this huge open lower.

12:09
I mean, it went all the way down to like in the 1420s or so, and then it just bounced right higher, but it was enough even though it didn’t close on a at a new lows. Actually, it did close down low’s because it was below the lows from. The, the, it was below the closing price of 10:30, so it was new closing lows.

12:28
But, uh, intraday lows as well, and that’s, that’s where I kind of cringe because I was like, man, if it couldn’t have done that, if it could have just put in a higher low right there, you, you would have a much better situation there. So we’re. Uh, it, it could maybe take its time trying to break that 1784, but right now it needs to keep on rallying, rallying, rallying until it can break that 1784 and maybe even clear the 1800 level.

12:49
Right now, it’s off to a great start. I mean, it’s at 5% today. That’s a huge move for it, but it needs to change this uh trend line. Now, if you look at Netflix, Same thing. It needs to get back over that, that 332 level. That’s a lot steeper task and probably not gonna happen anytime soon here, but if it can get over 300, you know, for, for me as on a, on a swing training basis, that would be great.

13:11
But, um, it still, it needs to get way back up. It needs to get back into the 3, 330s there to really um save face because it too is in a confirmed uh down trend, so. That’s that, it’s kind of depressing, but that’s the current state of affairs.

13:28
Now even more depressing is Apple, right? Um, it was even passed up in market, uh. Um, market cap by Microsoft today and yesterday, so. But there’s a good development here. It’s getting into this gap here, or at least it’s trying to.

13:44
It’s up 3.2%. It’s pretty rare that it makes those kind of big moves, but considering how oversold it is, and it’s literally been a, a, a falling knife for Apple and anybody who’s tried to trade it, broke through the five-day moving hours today, finally, that’s a big deal. It’s trying to test the 10-day. It has a lot of ground to make.

14:01
It probably has room to run all the way up to 2/200. Um, I don’t want to get too excited and say, say this, but, um, I mean, it could easily rally up to. Like 205 area there without facing much resistance, but the whole market, the, the whole demeanor of this market is going to have to change in order for it to do that.

14:22
And right now we, we, uh, are having a good rally, but I can’t necessarily say with a huge level of confidence that the worst is behind us. We do have a higher low on the S&P 500, and that’s a good thing, but in order for, for me to feel better about this market, it needs to climb back over 28, 14 next month.

14:40
So. Um, a lot of improvements still there. Now, if it does that, then yes, I can see where Apple could get up to 205 and I can see where Amazon could get up to, um, 1784-ish, and where Netflix could go over get over 300 and maybe into the 310s, 320s.

14:58
But, uh, there’s a lot of work to be done for these charts. And then finally, Google. Gosh, you know, there’s, there’s been a, uh, There there there there’s definitely been a few days this week where I’ve considered doing it cause I really like this double bottom that it had formed, um.

15:15
Over the last two months and it looked like a good tradable base. However, the reason why I didn’t do it is because I just didn’t feel like there was a lot of reward for that particular trade. It’s up 3.5% today too. That’s not bad, but that really just gives you a, uh, you know, a reward the risk of 1 to 1 at, at this point.

15:32
And I wasn’t overly confident that it would push through that 11-10 range anytime soon. And you look at how choppy this range has been, even in November, uh, end of October, early November when we were bouncing, still a very choppy pricing, uh, or price action.

15:48
So, I didn’t have a lot of confidence in this one. I mean, it’s definitely a huge improvement today, and that double bottom looks like it might confirm if it can push over 1110. And if it does that, then I think it go up to 1158 or so. So there’s, there’s, uh, A lot of chopiness in it.

16:04
I’ve stayed away from it primarily because I didn’t feel like it had as good of a risk reward as say a apple trade. Or a Netflix trade. I’m not gonna mention Facebook cause that’s a toxic stock and I just, it’s still not doing anything, or an Amazon trade. So, So those are the, and, and, and remember too, when the markets are balancing, you don’t need to go jumping into small cap stocks.

16:26
That’s, I mean, sure, there’s, there’s some money that can be made in those too. However, The market’s bouncing because the market leaders are bouncing. So like your Amazons, your Apples, your Netflix, um, Google, you wanna be in those stocks because they’re the ones that are pulling the market up too, and they’re gonna be the ones that are performing best and most reliably on a day to day basis.

16:45
So, I always tell people when you’ve seen a huge sell-off in the market, that’s really not the time to be loading up on small caps. It’s really the time to be loading up on market leaders that have been really hit hard over the, uh, over that same time, uh, frame. So. In any case, I hope this video has helped to give you some perspective on the markets, on trading, and how to play these balances and what to look for in the days and weeks ahead.

17:07
Um, if you guys have any questions, always feel free to email me, ryan@shareplanner.com, or, uh, you know, if you’d like, if you wanna trade with me a little bit more, jump in the splash zone with me and, um, and trade side by side with me. It’s a great experience. A lot of people do it and they, uh, they all seem to love it, so.

17:24
That’s gonna be it for now. Take care. God bless. Thanks for listening to this week’s podcast of swing trading with Ryan Mallory. I’d like to encourage you to join me in the SharePlanner trading block where I navigate the financial markets every day with traders from around the world.

17:40
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17:59
And follow me at SharePlanner on Twitter and on SharePlanner’s Facebook page where I provide unique market and trading ideas every day. If you have any questions, please feel free to email me, ryan@shareplanner.com.

18:17
All the best to you and God bless.