Good morning, traders…
Over the weekend, I was navigating through the winding corridors of a sprawling Las Vegas casino.
I saw people placing their chips on roulette wheels, their eyes fixed on the spinning ball, hoping against all odds for that one big win.
I watched as cards were dealt, hands were revealed, and fortunes were won or lost in mere seconds.
As I was moseying across the table games, I couldn’t help but compare the raw risk of casino gambling to the calculated approach I teach in trading.
At some point, you’re going to hear this common fallacy that “trading is no different than gambling.”
But these skeptics are mixing up “most traders fail” with “every trader fails.” And I’m living proof that the second one is just plain wrong.
Not just me. Guys like Tim Sykes, Jack Kellogg, Matt Monaco, Bryce Tuohey (and the list goes on) have all made life-changing money trading the stock market.
These guys aren’t throwing money at any random setup. They’re not gambling, they’re trading.
I want you to start doing the same.
Real trading starts with preparation, process, and plan.
Let Me Show You My Watchlist For The Week, The Steps I’m Taking To Prepare, And My Plan For Every Trade…
Top-of-Week Market Internals
The first step to being prepared is looking at market internals. They show us the big picture…
- Skew: The skew is starting to kick up to about 150. If it breaks 150, I’ll recommend some hedging opportunities.
- Put/Call Ratio: We are seeing the put/call ratio dropping. If it gets below the 0.6 level, that’s when you need to pay serious attention.
- VIX: The VIX is compressing. This suggests a big move on the horizon. We don’t know which direction yet, but be prepared for either a significant move up (where the market drops) or a significant move down (where the market rallies further). In the meantime, I love me some VIX under 16.
Last Week’s Top Movers
Remember our recent discussion about leading indicators? How Smart Money volume and options flow give us hints about where the stock might be heading?
Last week, we highlighted two names:
- Block Inc. (NASDAQ: XYZ): Block was up 8% yesterday (16% in the past week) on news that the company will be added to the S&P 500. The clues were there on my scanners last week. The Smart Money was hitting calls, calls, calls. That’s why we track their flow.
- Pinterest Inc. (NASDAQ: PINS): Last week, we saw big Smart Money flow into PINS, almost all calls. Yesterday, the stock gapped up 2.5%. Coincidence? I think not…
This Week’s Watchlist
Here are the top names on my radar this week (with key levels to watch):
Recursion Pharmaceuticals (NASDAQ: RXRX)
This chart looks glorious. I’m watching for a break above $16.30. Set an alert for that level.. It checked that pre-market, came back down, and found support where it was supposed to. If it breaks $16.30 on the third try, we’ll have a “three times a lady” pattern confirmation.
Webull (BULL): BULL was down yesterday morning. But was it down a lot? No.
It’s doing exactly what it’s supposed to do: pop, drop, find support around $15.25.
“If it hasn’t done anything wrong, gotta think long.”
You can either wait for a risk-adjusted pullback at $15.24 or wait for it to break $16.11. Create an alert for that $16.11 level for the August 15 $20 calls.
Interactive Brokers Group (NASDAQ: IBKR): IBKR is setting up a potential sideways consolidation breakout.
This name has “all the things” on my scanners: repeater bets, aggressive buying, and significant size over open interest.
If it can break $64.15, the breakout is on. It tried it once, twice, and couldn’t hold. But “three times a lady” could be the charm here.
Ideally, I would love it to fill the gap lower and bounce, but the breakout is a key level.
Hewlett Packard Enterprise Company (NYSE: HPE): Looking out to November for HPE. A classic run, rest, run pattern..
On Friday, we saw some nice sweeps, above-ask activity, and Smart Money getting aggressive.
This is a beautiful setup on the weekly chart, consolidating sideways after a move up.
On the daily chart, it’s fighting and holding above the point of control.
We’ll get confirmation if we see that “three times a lady” pattern breakout above $21.25. Set a price alert at that level.
Apple Inc. (NASDAQ: AAPL): I have been talking about Apple for a while for a run-up into earnings.
We’re seeing beautiful sideways consolidation. Earnings are coming up, and it’s forming a nice flag pattern.
If it can break and hold above $112.45, it can back up to $120 and fill the gap above that. I like the August $212.50 calls.
Tesla Inc. (NASDAQ: TSLA): Tesla is on watch this morning for the same reason: sideways consolidation.
I want to see Tesla hold this range. If it can get above $335, it’ll be in a clear breakout zone. Create that alert and watch this chart closely.
Happy trading,
Ben Sturgill
P.S. We have a new trading challenge: the $5k Summer Blitz.
Our goal? To make a 400% return on a small account.
$1000 → $5,000 by October 14.
We already 3x’d a small account TWICE using my Earnings Edge system…*
And if we DON’T turn $1,000 into $5,000 by October 14th…
We’re giving everyone who joins our “$5K Blitz Challenge” an exclusive $5,000 value gift…
Completely FREE of charge.
5x or bust.
That’s how confident we are.
Join Aaron Hunziker TODAY at 4:00 p.m EST to see exactly how we’ll conquer the challenge.
*Past performance does not indicate future results
