All entries by this author

Trading Lesson: Failed Gaps Can Lead To Large Down Moves– $BRCM

Jul 23rd, 2014 | By | Category: General Comments
In this morning's AM Meeting I discussed a possible short setup in BRCM. I was very skeptical of the gap above $40 as this stock was trading at $30 a couple of months ago and only traded higher when they said they were hiring an investment bank to look at selling off some assets. In my view this was a good setup for "sell the news". It is the opposite of recent trades in SWKS, CMG and BIIB that I have discussed that are "buy the news" situations. As traders we need to evaluate each trade on its merits. If you simply short every gap for no rhyme or reason the market will eliminate you pretty quickly. no relevant positions Read more [...]

Why I Got Long Bed, Bath & Beyond ($BBBY)

Jun 29th, 2014 | By | Category: Steven Spencer (Steve's) Blogs, Trading Lesson
In a raging bull market there aren't a lot of spots to put money to work on the long side that offer good risk to reward. BBBY gapped lower Thursday for the third time this year bringing it within striking distance of important longer term support and around 30% from its high. My thought process was that many large managers would use this opportunity to get long because the perceived downside was considerably less than the upside on the intermediate to longer term time frames. In this video I explain how I used this thesis to establish a swing trade in BBBY on the long side. One of the cool things about being a nimble short term Read more [...]

Trading Education: Do You Have A Methodology To Trade Gaps?

Jun 15th, 2014 | By | Category: General Comments, Steven Spencer (Steve's) Blogs, Trader Development, Trading Lesson, Trading Theory
On June 4th we posted a pre-market video in which I discussed a potential "gap fill" trade in TIBX. When a stock gaps outside of the prior day's range you have three options. Play it for a continuation in the direction of the gap, play it to fill some or all of the gap, or simply take a pass on trading it.  I have found over the years that most traders consistently choose the same option each time disregarding many factors that favor choosing one option over another. Why is this the case? For many it is a lack of methodology for trading gaps. For others it may be they are just more comfortable fading stocks versus following Read more [...]

Shorting The SPY (And Living To Write About It)

Jun 10th, 2014 | By | Category: General Comments, Steven Spencer (Steve's) Blogs
I initiated a pre-market short in the SPY on Thursday June 5th at 193.50. I added to the position as it popped to 194 following the ECB announcement of some monetary stimulus. It was the first time I had shorted the SPY in about six weeks. The risk on the trade was about 40 cents from my average entry and was designed to take advantage of a two to four point pull back. Looking back over the past few months the best short term shorts in the SPY were following strength such as April 4th or May 13th. The trade started to work in the pre-market, and when the market opened the first move was down as well. By 10:00AM the SPY was Read more [...]

PetSmart Not So Smart?

May 21st, 2014 | By | Category: Steven Spencer (Steve's) Blogs, Trading Theory
This morning I created a "trade idea" video featuring a short setup in PETM. Here is how the trade actually played out for me. The idea behind the trade was there was a fresh catalyst causing bearish price action during pre-market trading, and a similar setup has yield excellent results recently in stocks such as DKS and INCY. A very important part of the trading process is trade review which should take place after the market closes and you have some time to review each of the day's trades. The below chart highlights the action points from my trading in PETM on the Open. I lost money on two short trades and one long trade. The Read more [...]

Formulating A Trading Plan: $YELP

May 1st, 2014 | By | Category: Steven Spencer (Steve's) Blogs, Trader Development, Trading Lesson, Trading Theory
In this morning's AM Meeting I discussed a recent shift in my approach to trading momentum stocks as we have seen signs that bottoms are forming. In the second half of the video I share my intra-day trading plan for YELP: where it made sense to get long based on recent price action as well as a potential failure area to initiate shorts. By carefully studying price action we are able to formulate trading plans with favorable risk/reward ratios which greatly increases our margin for error. Pay close attention to the video and then compare it to YELP's actual trading pattern for the day. Steven Spencer is the co-founder Read more [...]

Its Ok to Change Your Mind–Pandora

Apr 27th, 2014 | By | Category: Steven Spencer (Steve's) Blogs
Pandora released their earnings after the market closed Thursday. If the numbers were OK I was looking to purchase at 26 or lower. I broadcasted live on SMB Real Time as I bought shares between 25-26. It eventually bounced to 27.50 where I sold most of the shares.   The next morning I was going to repeat what I had done in my after hours trading. There was no major negative news in their conference call and generally analysts were positive on the stock so with a gap opening of $2-$3 lower I viewed the risk of getting long as limited. As the market opened P dropped like rock to its recent low around $24.60. I was Read more [...]

SMB AM Meeting Recap: $PRAN

Mar 31st, 2014 | By | Category: SMB Video Blogs, Steven Spencer (Steve's) Blogs, Trading Ideas
In this short video, Steve discusses a stock from this morning's AM Meeting. Every morning he reviews the market and analyzes the stocks that are in play and likely to have second-day moves. Steve discusses the potential trading setups in $PRAN. Steven Spencer is the co-founder of SMB Capital and SMB University which provides trading education in stocks, options, forex and futures. He has traded professionally for 18 years. His email address is: Steven Spencer is currently long ADBE, CIEN, CLDX, CROX, FB, GM, HLF, LEN, P, PLUG, RAX, SCTY and short SPY. Learn the skills necessary to identify Read more [...]