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My Thought Process—$SPY Selloff

May 22nd, 2013 | By | Category: Steven Spencer (Steve's) Blogs, Trader Development, Trading Lesson
One type of price action that puts me on alert for a hard down move in the market is unusually large gyrations in quick succession. That is what is what we saw during the first few hours of trading today. Points 1&2 on the chart show up and down moves larger than the ATR of the SPY. This type of signalling usually occurs on the daily time frame. For a good higher time frame example check the SPY chart from January 2010. Point 3. The SPY was at 167.80 and sellers started to take control as the pattern of higher lows was broken. At this time SPY 167 Puts were being purchased. Point 4. More traders on the desk jumped into the SPY short. Point 5. The short trade is working Point Read more [...]

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Trade Review: $RAX

May 20th, 2013 | By | Category: General Comments, SMB on TV, Steven Spencer (Steve's) Blogs
To receive Steve's Trade Review videos via email as they become available, please sign up below. You will receive his latest trade review on $DDD where he discusses a "momentum reversal" short. Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is sspencer@smbcap.com. No Relevant Positions Read more [...]

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A Well-Priced Deal: $DDD

May 17th, 2013 | By | Category: Steven Spencer (Steve's) Blogs, Trader Development
Publicly traded companies sometimes choose to raise capital by issuing more shares. This allows them to have more working capital without the burden of taking on debt. The better run companies tend to do “secondaries” (according to Wikipedia “secondary” is a misnomer and this type of deal is a “follow on” offering) when their stocks have run up quite a bit. By issuing new shares when their stock is at higher levels they can raise more capital with less dilution to current shareholders. As short-term traders we can profit from these secondaries in several different ways. The first is by receiving an “allocation” from the underwriter in a secondary, which if priced “correctly” Read more [...]

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Trade Review: $CLF

May 13th, 2013 | By | Category: SMB on TV, Steven Spencer (Steve's) Blogs, Trading Lesson
In this video snippet from the May 10th morning meeting I discuss a Second Day Play in CLF that was traded the prior day and advise our traders to look for this setup again. To watch the video please sign up below: If you would like Steve Spencer's Trade Review videos to arrive directly to your inbox as they become available, please subscribe HERE.   Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is sspencer@smbcap.com. No Relevant Positions Read more [...]

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My Stupid Trade in $QIHU

May 11th, 2013 | By | Category: Steven Spencer (Steve's) Blogs, Technical Plays, Trader Development
A few days ago my trading clerk asked me to take a look at QIHU. It had exploded above its ATH on heavy volume. I didn't take a trade in it on Day 1 but made a note of the 36.50 pullback low after its Opening Drive. On Day 2 after a stock has broken out I like to get long if it consolidates above this level. On Day 2 I got long a quarter position at 36.65 in the late afternoon as it was clearly being bought above the 36.50 support. I was risking about 20 cents on the position with the intention of swinging it for the next leg higher. From a measured moved perspective if it broke out from the Day 1 high a reasonable target would be around 40.60. On Day 3 it opened flattish then drove up Read more [...]

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My Thought Process: $AAPL

May 2nd, 2013 | By | Category: General Comments, Steven Spencer (Steve's) Blogs, Trader Development
Here is a timeline of my trading thought process starting on April 24th the morning after AAPL reported earnings through April 29th. I want to put this first StockTweet in context. After AAPL released their earnings report trading was halted. AAPL announced a capital plan to return about $100 billion dollars to shareholders via dividends and stock buybacks. They reported gross margins of 37.5% which was fairly in line with expectations. When AAPL resumed trading after the halt it was at 419 up around 13 points from its  4:00PM Close. By the time the after hours session had ended AAPL had completely filled the gap, and it was setting up for a likely test of 390 the next morning, which was Read more [...]

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Technical Breakdown Trade: $AAPL

Apr 28th, 2013 | By | Category: Steven Spencer (Steve's) Blogs, Technical Plays, Trading Lesson
In this trade review Steve discusses the multi-day approach to a technical breakdown in AAPL below 419. There will be a followup trade review this week where Steve will discuss the long reversal a position he is currently still holding.   Steven Spencer is the co-founder of SMB Capital and SMB University and has traded professionally for 16 years. His email is sspencer@smbcap.com. Steven Spencer is currently long AAPL and short GLD Try all our trading tools for 2 months *SMB Radar not included Read more [...]

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Don’t Be a Trading Cliché

Apr 4th, 2013 | By | Category: Steven Spencer (Steve's) Blogs
The trader who doesn't like to share ideas and strategies with others because they actually believe their techniques are so special that they will lose their "edge" if they share. seriously.  The trader who fades every gap The trader who trades every gap for a continuation The trader who thinks that reviewing your important trades is "second guessing" or "monday morning quarter backing". seriously. The trader who thinks that there is some vast conspiracy against every position they are in The trader who bangs, curses and screams  The trader who rips up thousands short a stock after missing a 3 day 15% decline. i.e. NFLX The trader who gets short a stock the day every momo Read more [...]

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My Thought Process: $NFLX

Apr 2nd, 2013 | By | Category: General Comments, Steven Spencer (Steve's) Blogs, Trading Lesson
NFLX had a very powerful downtrend the prior day when it broke the March 28th support of 188.70. I was continuing to monitor it for a break of the 180-179 area. I missed the initial short entry on the Open when it held below 182. As luck would have it I returned to the desk just as NFLX was spiking up to an important support area from the prior day's trading range. I quickly placed a series of offers from 182.75 to 182.90 to get short. I was operating under the assumption that this quick spike would fail and that entries so far from the morning's support area would put me in a position of strength for a swing short. NFLX had just taken out the morning low of 179.60 and this Read more [...]

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Did My Exit Make Sense?

Apr 2nd, 2013 | By | Category: Steven Spencer (Steve's) Blogs
Yesterday I had an alert set for BIIB at 192 as it was support into the Close the previous trading day. In stocks that are in strong uptrends I like to buy at this price level if I see support on the tape. After pulling back to 192 BIIB moved sideways for over an hour moving above and below this important level. I got long at 192.10 with a stop below 191.80. The market closed with BIIB at 191.70 and I decided to take the position home. One of my points of emphasis for 2013 is taking advantage of more swing trades in this low volatility low risk environment (see #NewNormal posts from january).  When I turned on my platform this morning I saw BIIB print at 194.70. I figured it was just some Read more [...]

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