{"id":50171,"date":"2020-10-02T11:35:16","date_gmt":"2020-10-02T15:35:16","guid":{"rendered":"https:\/\/www.smbtraining.com\/blog\/?p=50171"},"modified":"2020-10-02T10:35:35","modified_gmt":"2020-10-02T14:35:35","slug":"the-smartest-dumb-trade-youll-ever-make","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/the-smartest-dumb-trade-youll-ever-make","title":{"rendered":"The Smartest Dumb Trade You’ll Ever Make"},"content":{"rendered":"

In this video, Steve Spencer talks about breaking news trades that involve momentum stocks. If trading momentum stocks is of interest to you, then you won’t want to miss this video.<\/p>\nView Video Transcript<\/strong><\/span>

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in today’s trading lesson we are going<\/div>\n<\/div>\n<\/div>\n
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to talk about<\/div>\n<\/div>\n<\/div>\n
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a kind of breaking news trade that<\/div>\n<\/div>\n<\/div>\n
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involves momentum stocks<\/div>\n<\/div>\n<\/div>\n
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names like peloton amazon<\/div>\n<\/div>\n<\/div>\n
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netflix if trading momentum stocks<\/div>\n<\/div>\n<\/div>\n
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is of interest to you stick around<\/div>\n<\/div>\n<\/div>\n
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my name is steven spencer i am a<\/div>\n<\/div>\n<\/div>\n
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partner at smb capital we are<\/div>\n<\/div>\n<\/div>\n
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proprietary trading firm<\/div>\n<\/div>\n<\/div>\n
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in midtown manhattan where we trade<\/div>\n<\/div>\n<\/div>\n
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stocks<\/div>\n<\/div>\n<\/div>\n
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futures and options<\/div>\n<\/div>\n<\/div>\n
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so today’s trade<\/div>\n<\/div>\n<\/div>\n
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is what i like to refer to as the<\/div>\n<\/div>\n<\/div>\n
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smartest dumb trade<\/div>\n<\/div>\n<\/div>\n
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you’ll ever make and this is a trade<\/div>\n<\/div>\n<\/div>\n
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that’s been around for many many years<\/div>\n<\/div>\n<\/div>\n
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it usually crops up a few times during<\/div>\n<\/div>\n<\/div>\n
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the year<\/div>\n<\/div>\n<\/div>\n
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and it is a subset of a breaking news<\/div>\n<\/div>\n<\/div>\n
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trade<\/div>\n<\/div>\n<\/div>\n
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so the idea the idea behind the setup<\/div>\n<\/div>\n<\/div>\n
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is basically there’s a market leading<\/div>\n<\/div>\n<\/div>\n
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company<\/div>\n<\/div>\n<\/div>\n
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um they have a segment that they’re a<\/div>\n<\/div>\n<\/div>\n
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leader of and i mentioned<\/div>\n<\/div>\n<\/div>\n
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at the beginning of peloton so they have<\/div>\n<\/div>\n<\/div>\n
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this particular segment like<\/div>\n<\/div>\n<\/div>\n
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home exercise or perhaps you know years<\/div>\n<\/div>\n<\/div>\n
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ago netflix<\/div>\n<\/div>\n<\/div>\n
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market leading segment would be online<\/div>\n<\/div>\n<\/div>\n
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streaming<\/div>\n<\/div>\n<\/div>\n
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and then what happens is news breaking<\/div>\n<\/div>\n<\/div>\n
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news story will happen during the day<\/div>\n<\/div>\n<\/div>\n
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that one of the large market leaders<\/div>\n<\/div>\n<\/div>\n
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like an apple<\/div>\n<\/div>\n<\/div>\n
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or an amazon or one of these huge<\/div>\n<\/div>\n<\/div>\n
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companies google<\/div>\n<\/div>\n<\/div>\n
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microsoft will come along and they’re<\/div>\n<\/div>\n<\/div>\n
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going to somehow compete<\/div>\n<\/div>\n<\/div>\n
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with this company that’s become very<\/div>\n<\/div>\n<\/div>\n
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strong in a particular niche<\/div>\n<\/div>\n<\/div>\n
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now when you step back and you think<\/div>\n<\/div>\n<\/div>\n
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about it<\/div>\n<\/div>\n<\/div>\n
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the the the market leader of a<\/div>\n<\/div>\n<\/div>\n
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particular segment like a peloton<\/div>\n<\/div>\n<\/div>\n
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they’re the market leader<\/div>\n<\/div>\n<\/div>\n
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the segment leader for a reason they<\/div>\n<\/div>\n<\/div>\n
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figured out an addressable need<\/div>\n<\/div>\n<\/div>\n
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they developed a product that’s popular<\/div>\n<\/div>\n<\/div>\n
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and they’ve executed really well<\/div>\n<\/div>\n<\/div>\n
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and so just from a pure analysis<\/div>\n<\/div>\n<\/div>\n
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standpoint<\/div>\n<\/div>\n<\/div>\n
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the fact that amazon or apple or someone<\/div>\n<\/div>\n<\/div>\n
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might come along and compete<\/div>\n<\/div>\n<\/div>\n
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that’s not going to change peloton’s<\/div>\n<\/div>\n<\/div>\n
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long-term prospects at least it’s not<\/div>\n<\/div>\n<\/div>\n
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the vast majority of the time most times<\/div>\n<\/div>\n<\/div>\n
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when a very big company says they want<\/div>\n<\/div>\n<\/div>\n
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to compete in a particular segment<\/div>\n<\/div>\n<\/div>\n
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that’s fine it’s usually because they<\/div>\n<\/div>\n<\/div>\n
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can’t actually take over the leader of<\/div>\n<\/div>\n<\/div>\n
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that particular segment and so they have<\/div>\n<\/div>\n<\/div>\n
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to<\/div>\n<\/div>\n<\/div>\n
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basically develop their own thing<\/div>\n<\/div>\n<\/div>\n
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internally<\/div>\n<\/div>\n<\/div>\n
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but almost never is it a situation where<\/div>\n<\/div>\n<\/div>\n
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you know to give you an example from the<\/div>\n<\/div>\n<\/div>\n
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iphone moment from 2007<\/div>\n<\/div>\n<\/div>\n
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where apple came in and they said you<\/div>\n<\/div>\n<\/div>\n
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know what the way that this sector<\/div>\n<\/div>\n<\/div>\n
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is going right now with smartphones<\/div>\n<\/div>\n<\/div>\n
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nokia blackberry this doesn’t make any<\/div>\n<\/div>\n<\/div>\n
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sense<\/div>\n<\/div>\n<\/div>\n
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we’re going to come in disrupt and<\/div>\n<\/div>\n<\/div>\n
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completely take over this segment or a<\/div>\n<\/div>\n<\/div>\n
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more recent example<\/div>\n<\/div>\n<\/div>\n
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in the last few years maybe tesla the<\/div>\n<\/div>\n<\/div>\n
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way automobiles are manufactured<\/div>\n<\/div>\n<\/div>\n
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it should be electric it should be<\/div>\n<\/div>\n<\/div>\n
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software fully integrated we’re going to<\/div>\n<\/div>\n<\/div>\n
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come and disrupt this segment and<\/div>\n<\/div>\n<\/div>\n
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completely take it over the next<\/div>\n<\/div>\n<\/div>\n
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decade so that’s those are the<\/div>\n<\/div>\n<\/div>\n
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exceptions that’s very very very rare<\/div>\n<\/div>\n<\/div>\n
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what happens normally is a large very<\/div>\n<\/div>\n<\/div>\n
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large conglomerate will come along<\/div>\n<\/div>\n<\/div>\n
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they’ll try to compete in a narrow area<\/div>\n<\/div>\n<\/div>\n
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and<\/div>\n<\/div>\n<\/div>\n
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they might have some modest success or<\/div>\n<\/div>\n<\/div>\n
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maybe they’ll even do quite well and<\/div>\n<\/div>\n<\/div>\n
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compete<\/div>\n<\/div>\n<\/div>\n
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with with the segment leader but they’re<\/div>\n<\/div>\n<\/div>\n
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not going to destroy that<\/div>\n<\/div>\n<\/div>\n
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that company but that doesn’t matter for<\/div>\n<\/div>\n<\/div>\n
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in terms of intraday trading if news<\/div>\n<\/div>\n<\/div>\n
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breaks during the day<\/div>\n<\/div>\n<\/div>\n
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because the reality the fact of the<\/div>\n<\/div>\n<\/div>\n
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matter is that if you have breaking news<\/div>\n<\/div>\n<\/div>\n
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during the day<\/div>\n<\/div>\n<\/div>\n
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that somebody like apple is going to<\/div>\n<\/div>\n<\/div>\n
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come along and compete or somebody like<\/div>\n<\/div>\n<\/div>\n
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facebook is going to come along and<\/div>\n<\/div>\n<\/div>\n
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compete<\/div>\n<\/div>\n<\/div>\n
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the algorithms that are scanning all the<\/div>\n<\/div>\n<\/div>\n
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news feeds scanning the bloomberg<\/div>\n<\/div>\n<\/div>\n
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terminal stories and using natural<\/div>\n<\/div>\n<\/div>\n
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language processors<\/div>\n<\/div>\n<\/div>\n
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to look for stocks to buy or sell<\/div>\n<\/div>\n<\/div>\n
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they’re going to see<\/div>\n<\/div>\n<\/div>\n
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that headline for that news story and<\/div>\n<\/div>\n<\/div>\n
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that announcement<\/div>\n<\/div>\n<\/div>\n
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and they’re going to shoot first and ask<\/div>\n<\/div>\n<\/div>\n
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questions later and what happens is<\/div>\n<\/div>\n<\/div>\n
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there will be some initial cell pressure<\/div>\n<\/div>\n<\/div>\n
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when a story like this comes out<\/div>\n<\/div>\n<\/div>\n
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then human traders short-term traders<\/div>\n<\/div>\n<\/div>\n
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such as traders at our firm<\/div>\n<\/div>\n<\/div>\n
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they come along and they will start to<\/div>\n<\/div>\n<\/div>\n
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trade intraday<\/div>\n<\/div>\n<\/div>\n
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and they will use their trading skills<\/div>\n<\/div>\n<\/div>\n
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to pile on on the short side<\/div>\n<\/div>\n<\/div>\n
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and then ultimately the stock might have<\/div>\n<\/div>\n<\/div>\n
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some bottoming action and we will look<\/div>\n<\/div>\n<\/div>\n
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for a reversal intraday<\/div>\n<\/div>\n<\/div>\n
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and then over the coming days because<\/div>\n<\/div>\n<\/div>\n
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the stock that’s<\/div>\n<\/div>\n<\/div>\n
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that’s being sold off is a segment<\/div>\n<\/div>\n<\/div>\n
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leader in their particular niche<\/div>\n<\/div>\n<\/div>\n
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we will look for a longer term swing<\/div>\n<\/div>\n<\/div>\n
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trade to the upside<\/div>\n<\/div>\n<\/div>\n
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so for those of you are interday traders<\/div>\n<\/div>\n<\/div>\n
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what we’re going to look at this is<\/div>\n<\/div>\n<\/div>\n
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great for you for those of you who are<\/div>\n<\/div>\n<\/div>\n
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intraday and swing<\/div>\n<\/div>\n<\/div>\n
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we’re going to also address the swing<\/div>\n<\/div>\n<\/div>\n
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component the swing setup<\/div>\n<\/div>\n<\/div>\n
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as well our first example the best<\/div>\n<\/div>\n<\/div>\n
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example i could think of for the last<\/div>\n<\/div>\n<\/div>\n
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couple of years<\/div>\n<\/div>\n<\/div>\n
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from the last couple of years was in<\/div>\n<\/div>\n<\/div>\n
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2018<\/div>\n<\/div>\n<\/div>\n
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in the middle of the day facebook<\/div>\n<\/div>\n<\/div>\n
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decided to announce<\/div>\n<\/div>\n<\/div>\n
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that we are going to start producing a<\/div>\n<\/div>\n<\/div>\n
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dating app<\/div>\n<\/div>\n<\/div>\n
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and we’re going to compete with the<\/div>\n<\/div>\n<\/div>\n
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you know the the top people in the<\/div>\n<\/div>\n<\/div>\n
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dating online dating space now<\/div>\n<\/div>\n<\/div>\n
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there’s one publicly traded company<\/div>\n<\/div>\n<\/div>\n
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that’s controlled this space for many<\/div>\n<\/div>\n<\/div>\n
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many years and is<\/div>\n<\/div>\n<\/div>\n
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dominant and that’s known as match.com<\/div>\n<\/div>\n<\/div>\n
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and it’s actually<\/div>\n<\/div>\n<\/div>\n
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mtch so when that news broke the<\/div>\n<\/div>\n<\/div>\n
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algorithms hit the bids<\/div>\n<\/div>\n<\/div>\n
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the stock went down very quickly and<\/div>\n<\/div>\n<\/div>\n
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bedlam ensued here’s a multi-day chart<\/div>\n<\/div>\n<\/div>\n
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what you can see is very clearly on day<\/div>\n<\/div>\n<\/div>\n
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one when that announcement came out at<\/div>\n<\/div>\n<\/div>\n
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one o’clock or two o’clock or whatever<\/div>\n<\/div>\n<\/div>\n
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it was<\/div>\n<\/div>\n<\/div>\n
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it was boom went straight down several<\/div>\n<\/div>\n<\/div>\n
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dollars<\/div>\n<\/div>\n<\/div>\n
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and eventually ended up selling some off<\/div>\n<\/div>\n<\/div>\n
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some more the next day if we actually<\/div>\n<\/div>\n<\/div>\n
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zoom in<\/div>\n<\/div>\n<\/div>\n
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and take a closer look at what happened<\/div>\n<\/div>\n<\/div>\n
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is you can see and i’ve labeled this<\/div>\n<\/div>\n<\/div>\n
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there i’ve given you three potential<\/div>\n<\/div>\n<\/div>\n
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action points<\/div>\n<\/div>\n<\/div>\n
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and the first action point is really you<\/div>\n<\/div>\n<\/div>\n
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know it’s either going to be<\/div>\n<\/div>\n<\/div>\n
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algorithms seeing the news scanning the<\/div>\n<\/div>\n<\/div>\n
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news<\/div>\n<\/div>\n<\/div>\n
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and getting short match when facebook<\/div>\n<\/div>\n<\/div>\n
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says they’re going to compete with<\/div>\n<\/div>\n<\/div>\n
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match.com<\/div>\n<\/div>\n<\/div>\n
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those are the first people to get short<\/div>\n<\/div>\n<\/div>\n
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the the algorithms that are quicker than<\/div>\n<\/div>\n<\/div>\n
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the humans<\/div>\n<\/div>\n<\/div>\n
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the humans on our desk will have<\/div>\n<\/div>\n<\/div>\n
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scanning<\/div>\n<\/div>\n<\/div>\n
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software that’s built into our trading<\/div>\n<\/div>\n<\/div>\n
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platform and that scanning software<\/div>\n<\/div>\n<\/div>\n
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within<\/div>\n<\/div>\n<\/div>\n
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usually within a few seconds we’ll pick<\/div>\n<\/div>\n<\/div>\n
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up on the unusual trading activity<\/div>\n<\/div>\n<\/div>\n
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or maybe even within a second we’ll pick<\/div>\n<\/div>\n<\/div>\n
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up the unusual trading activity<\/div>\n<\/div>\n<\/div>\n
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um in match mtch<\/div>\n<\/div>\n<\/div>\n
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and so as it’s dropping a point or so<\/div>\n<\/div>\n<\/div>\n
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the momentum traders who trade breaking<\/div>\n<\/div>\n<\/div>\n
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news stories<\/div>\n<\/div>\n<\/div>\n
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will actually start to get short um<\/div>\n<\/div>\n<\/div>\n
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match and then watch to you know for<\/div>\n<\/div>\n<\/div>\n
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that initial<\/div>\n<\/div>\n<\/div>\n
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momentum down and then the the traders<\/div>\n<\/div>\n<\/div>\n
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who are kind of more wait and see<\/div>\n<\/div>\n<\/div>\n
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approach<\/div>\n<\/div>\n<\/div>\n
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will look at that initial down move in<\/div>\n<\/div>\n<\/div>\n
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the first five 10 15 minutes<\/div>\n<\/div>\n<\/div>\n
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look for some sort of retracement some<\/div>\n<\/div>\n<\/div>\n
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sort of bounce<\/div>\n<\/div>\n<\/div>\n
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and you can see that’s where i labeled<\/div>\n<\/div>\n<\/div>\n
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number two it’s actually an area i<\/div>\n<\/div>\n<\/div>\n
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circled<\/div>\n<\/div>\n<\/div>\n
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it went down pretty pretty hard in that<\/div>\n<\/div>\n<\/div>\n
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first<\/div>\n<\/div>\n<\/div>\n
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first 15 or 20 minutes or so there was<\/div>\n<\/div>\n<\/div>\n
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about a two dollar bounce two to three<\/div>\n<\/div>\n<\/div>\n
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dollar balance<\/div>\n<\/div>\n<\/div>\n
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and that sort of normal retracement is<\/div>\n<\/div>\n<\/div>\n
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where experienced traders<\/div>\n<\/div>\n<\/div>\n
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who weren’t participating in that<\/div>\n<\/div>\n<\/div>\n
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initial momentum down move will look to<\/div>\n<\/div>\n<\/div>\n
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see where it starts to move sideways<\/div>\n<\/div>\n<\/div>\n
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because anytime you have a momentum down<\/div>\n<\/div>\n<\/div>\n
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move intraday<\/div>\n<\/div>\n<\/div>\n
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there’s going to be a natural<\/div>\n<\/div>\n<\/div>\n
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retracement one of the things to look<\/div>\n<\/div>\n<\/div>\n
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for for that retracement is<\/div>\n<\/div>\n<\/div>\n
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did volume hit a crescendo did volume<\/div>\n<\/div>\n<\/div>\n
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really get quite high and then start to<\/div>\n<\/div>\n<\/div>\n
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tail off again<\/div>\n<\/div>\n<\/div>\n
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i circled on the bottom part of that<\/div>\n<\/div>\n<\/div>\n
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chart where the volume is being<\/div>\n<\/div>\n<\/div>\n
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highlighted<\/div>\n<\/div>\n<\/div>\n
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and you see those last two down bars on<\/div>\n<\/div>\n<\/div>\n
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the chart<\/div>\n<\/div>\n<\/div>\n
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that the volume got extremely high and<\/div>\n<\/div>\n<\/div>\n
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that marked the intraday low for that<\/div>\n<\/div>\n<\/div>\n
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for about an hour or so and<\/div>\n<\/div>\n<\/div>\n
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that is where people who shorted on a<\/div>\n<\/div>\n<\/div>\n
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momentum basis would probably start to<\/div>\n<\/div>\n<\/div>\n
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look to cover as it starts to move<\/div>\n<\/div>\n<\/div>\n
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sideways<\/div>\n<\/div>\n<\/div>\n
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but as it starts to consolidate and the<\/div>\n<\/div>\n<\/div>\n
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sellers emerge at the top of that<\/div>\n<\/div>\n<\/div>\n
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consolidation<\/div>\n<\/div>\n<\/div>\n
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some cradles will start to build into a<\/div>\n<\/div>\n<\/div>\n
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short position again and they won’t<\/div>\n<\/div>\n<\/div>\n
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actually<\/div>\n<\/div>\n<\/div>\n
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wait for the break of that consolidation<\/div>\n<\/div>\n<\/div>\n
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for myself<\/div>\n<\/div>\n<\/div>\n
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i’m actually looking to see which way it<\/div>\n<\/div>\n<\/div>\n
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breaks because<\/div>\n<\/div>\n<\/div>\n
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in this scenario where facebook decides<\/div>\n<\/div>\n<\/div>\n
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that they’re going<\/div>\n<\/div>\n<\/div>\n
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to announce a competing product at some<\/div>\n<\/div>\n<\/div>\n
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point in the future<\/div>\n<\/div>\n<\/div>\n
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with the dominant player my natural<\/div>\n<\/div>\n<\/div>\n
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skepticism kicks in<\/div>\n<\/div>\n<\/div>\n
\n
\n
and so what i’m for the most part<\/div>\n<\/div>\n<\/div>\n
\n
\n
looking to do<\/div>\n<\/div>\n<\/div>\n
\n
\n
is just waiting to see those sellers<\/div>\n<\/div>\n<\/div>\n
\n
\n
step down lower<\/div>\n<\/div>\n<\/div>\n
\n
\n
and a break of the consolidation and<\/div>\n<\/div>\n<\/div>\n
\n
\n
play that<\/div>\n<\/div>\n<\/div>\n
\n
\n
and that’s where even the traders that<\/div>\n<\/div>\n<\/div>\n
\n
\n
are perhaps shorting during that<\/div>\n<\/div>\n<\/div>\n
\n
\n
consolidation towards the top of the<\/div>\n<\/div>\n<\/div>\n
\n
\n
range<\/div>\n<\/div>\n<\/div>\n
\n
\n
they’re not going to get really<\/div>\n<\/div>\n<\/div>\n
\n
\n
aggressive until they see the break<\/div>\n<\/div>\n<\/div>\n
\n
\n
as well and that’s where i’ve labeled<\/div>\n<\/div>\n<\/div>\n
\n
\n
point number three where it actually<\/div>\n<\/div>\n<\/div>\n
\n
\n
breaks out of consolidation<\/div>\n<\/div>\n<\/div>\n
\n
\n
in addition to what we see when the<\/div>\n<\/div>\n<\/div>\n
\n
\n
initial story comes out in the<\/div>\n<\/div>\n<\/div>\n
\n
\n
algorithms<\/div>\n<\/div>\n<\/div>\n
\n
\n
hitting the bids and causing this<\/div>\n<\/div>\n<\/div>\n
\n
\n
downward pressure intraday what you have<\/div>\n<\/div>\n<\/div>\n
\n
\n
usually in the next day or two<\/div>\n<\/div>\n<\/div>\n
\n
\n
is what i refer to as the dumb headlines<\/div>\n<\/div>\n<\/div>\n
\n
\n
we know that a lot of publications are<\/div>\n<\/div>\n<\/div>\n
\n
\n
designed<\/div>\n<\/div>\n<\/div>\n
\n
\n
to make money by getting people to click<\/div>\n<\/div>\n<\/div>\n
\n
\n
on headlines click on stories that’s how<\/div>\n<\/div>\n<\/div>\n
\n
\n
they make money through ads<\/div>\n<\/div>\n<\/div>\n
\n
\n
and so we’ll see um after a stock like<\/div>\n<\/div>\n<\/div>\n
\n
\n
match sells off<\/div>\n<\/div>\n<\/div>\n
\n
\n
um these online publications know<\/div>\n<\/div>\n<\/div>\n
\n
\n
that if they have headlines like here’s<\/div>\n<\/div>\n<\/div>\n
\n
\n
an example right here<\/div>\n<\/div>\n<\/div>\n
\n
\n
facebook is a beast unlike any other<\/div>\n<\/div>\n<\/div>\n
\n
\n
that match group has<\/div>\n<\/div>\n<\/div>\n
\n
\n
seen and so that’s a big headline from<\/div>\n<\/div>\n<\/div>\n
\n
\n
business insider they’re known to<\/div>\n<\/div>\n<\/div>\n
\n
\n
kind of puff up stories and do things<\/div>\n<\/div>\n<\/div>\n
\n
\n
like this they’ve been doing that for<\/div>\n<\/div>\n<\/div>\n
\n
\n
years<\/div>\n<\/div>\n<\/div>\n
\n
\n
um but you have to think about it from<\/div>\n<\/div>\n<\/div>\n
\n
\n
the standpoint of on day one<\/div>\n<\/div>\n<\/div>\n
\n
\n
if something moves down intraday and<\/div>\n<\/div>\n<\/div>\n
\n
\n
then closes pretty weak<\/div>\n<\/div>\n<\/div>\n
\n
\n
you’re going to then get these headlines<\/div>\n<\/div>\n<\/div>\n
\n
\n
online you’re then going to get the<\/div>\n<\/div>\n<\/div>\n
\n
\n
financial media<\/div>\n<\/div>\n<\/div>\n
\n
\n
the people the you know investors<\/div>\n<\/div>\n<\/div>\n
\n
\n
watching tv that night<\/div>\n<\/div>\n<\/div>\n
\n
\n
you know saying match.com dropped 10<\/div>\n<\/div>\n<\/div>\n
\n
\n
or 15 facebook’s going to compete and so<\/div>\n<\/div>\n<\/div>\n
\n
\n
you’re going to get more people<\/div>\n<\/div>\n<\/div>\n
\n
\n
putting in orders perhaps that are even<\/div>\n<\/div>\n<\/div>\n
\n
\n
long match deciding oh my goodness i<\/div>\n<\/div>\n<\/div>\n
\n
\n
better sell it the next morning because<\/div>\n<\/div>\n<\/div>\n
\n
\n
there’s competition coming from facebook<\/div>\n<\/div>\n<\/div>\n
\n
\n
and that<\/div>\n<\/div>\n<\/div>\n
\n
\n
usually on day two if that stock closed<\/div>\n<\/div>\n<\/div>\n
\n
\n
week will create some further pressure<\/div>\n<\/div>\n<\/div>\n
\n
\n
but what i referred to at the top of the<\/div>\n<\/div>\n<\/div>\n
\n
\n
video was<\/div>\n<\/div>\n<\/div>\n
\n
\n
once you get that initial selling on day<\/div>\n<\/div>\n<\/div>\n
\n
\n
one once you get people jumping in on<\/div>\n<\/div>\n<\/div>\n
\n
\n
day two and selling some more<\/div>\n<\/div>\n<\/div>\n
\n
\n
as long as we’re coming into longer term<\/div>\n<\/div>\n<\/div>\n
\n
\n
support we’re going to start to look for<\/div>\n<\/div>\n<\/div>\n
\n
\n
sideways action over the next two or<\/div>\n<\/div>\n<\/div>\n
\n
\n
three days<\/div>\n<\/div>\n<\/div>\n
\n
\n
maybe some sort of bounce and then over<\/div>\n<\/div>\n<\/div>\n
\n
\n
the next week or two<\/div>\n<\/div>\n<\/div>\n
\n
\n
pretty much erasing um erasing that down<\/div>\n<\/div>\n<\/div>\n
\n
\n
move that that we saw and so in this<\/div>\n<\/div>\n<\/div>\n
\n
\n
chart that we’re looking at right here<\/div>\n<\/div>\n<\/div>\n
\n
\n
what you can see is over the last few<\/div>\n<\/div>\n<\/div>\n
\n
\n
months i’ve circled on the left side of<\/div>\n<\/div>\n<\/div>\n
\n
\n
the chart<\/div>\n<\/div>\n<\/div>\n
\n
\n
where they reported earnings where mtch<\/div>\n<\/div>\n<\/div>\n
\n
\n
reported earnings<\/div>\n<\/div>\n<\/div>\n
\n
\n
it actually had good earnings just you<\/div>\n<\/div>\n<\/div>\n
\n
\n
can tell by the chart<\/div>\n<\/div>\n<\/div>\n
\n
\n
it moved up in the coming days after<\/div>\n<\/div>\n<\/div>\n
\n
\n
that from the 30s into the 40s<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then the announcement from facebook<\/div>\n<\/div>\n<\/div>\n
\n
\n
caused it to drop<\/div>\n<\/div>\n<\/div>\n
\n
\n
not all the way down to the 3435 area<\/div>\n<\/div>\n<\/div>\n
\n
\n
where it was on the prior earnings<\/div>\n<\/div>\n<\/div>\n
\n
\n
but pretty close but on day two you can<\/div>\n<\/div>\n<\/div>\n
\n
\n
see it flushed into that longer term<\/div>\n<\/div>\n<\/div>\n
\n
\n
support<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then you can see in the next couple<\/div>\n<\/div>\n<\/div>\n
\n
\n
of days people starting to nibble<\/div>\n<\/div>\n<\/div>\n
\n
\n
starting to move sideways<\/div>\n<\/div>\n<\/div>\n
\n
\n
and that’s what it looks like when<\/div>\n<\/div>\n<\/div>\n
\n
\n
something stocks come off really hard<\/div>\n<\/div>\n<\/div>\n
\n
\n
what it looks like after that big down<\/div>\n<\/div>\n<\/div>\n
\n
\n
move on day one and then some selling on<\/div>\n<\/div>\n<\/div>\n
\n
\n
day two or day three possibly<\/div>\n<\/div>\n<\/div>\n
\n
\n
you’ll start to see then a range form<\/div>\n<\/div>\n<\/div>\n
\n
\n
and a bounce attempt and usually<\/div>\n<\/div>\n<\/div>\n
\n
\n
that i would say most times that first a<\/div>\n<\/div>\n<\/div>\n
\n
\n
balanced attempt doesn’t go straight<\/div>\n<\/div>\n<\/div>\n
\n
\n
back<\/div>\n<\/div>\n<\/div>\n
\n
\n
up you’ll have some more selling and<\/div>\n<\/div>\n<\/div>\n
\n
\n
then maybe a higher low or a re-test of<\/div>\n<\/div>\n<\/div>\n
\n
\n
the low<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then the next time it starts to move<\/div>\n<\/div>\n<\/div>\n
\n
\n
up and takes out the initial bounce high<\/div>\n<\/div>\n<\/div>\n
\n
\n
you start to have a trend and you’ll go<\/div>\n<\/div>\n<\/div>\n
\n
\n
to price targets and we look at the next<\/div>\n<\/div>\n<\/div>\n
\n
\n
chart what you can see is i’ve labeled a<\/div>\n<\/div>\n<\/div>\n
\n
\n
few profit targets as it starts to<\/div>\n<\/div>\n<\/div>\n
\n
\n
balance in the coming days<\/div>\n<\/div>\n<\/div>\n
\n
\n
the other thing to remember is when<\/div>\n<\/div>\n<\/div>\n
\n
\n
cooler heads prevail three four five<\/div>\n<\/div>\n<\/div>\n
\n
\n
days later you’ll start to see some more<\/div>\n<\/div>\n<\/div>\n
\n
\n
headlines<\/div>\n<\/div>\n<\/div>\n
\n
\n
you know match reports earnings they<\/div>\n<\/div>\n<\/div>\n
\n
\n
gave a good outlook<\/div>\n<\/div>\n<\/div>\n
\n
\n
they should be doing fine and so then<\/div>\n<\/div>\n<\/div>\n
\n
\n
people see the stock starting to move up<\/div>\n<\/div>\n<\/div>\n
\n
\n
and they realize it’s down well off the<\/div>\n<\/div>\n<\/div>\n
\n
\n
highs<\/div>\n<\/div>\n<\/div>\n
\n
\n
more people will start to come back in<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then that creates kind of this<\/div>\n<\/div>\n<\/div>\n
\n
\n
uptrend working its way back into<\/div>\n<\/div>\n<\/div>\n
\n
\n
possible bounce areas so the three areas<\/div>\n<\/div>\n<\/div>\n
\n
\n
that i like to trade<\/div>\n<\/div>\n<\/div>\n
\n
\n
um back into the bounce areas and so on<\/div>\n<\/div>\n<\/div>\n
\n
\n
day two on<\/div>\n<\/div>\n<\/div>\n
\n
\n
first of all let me just say on day two<\/div>\n<\/div>\n<\/div>\n
\n
\n
that’s what i’m looking to put in my<\/div>\n<\/div>\n<\/div>\n
\n
\n
swing long trade<\/div>\n<\/div>\n<\/div>\n
\n
\n
usually right on the open you’ll put in<\/div>\n<\/div>\n<\/div>\n
\n
\n
a low remember in the first 15-20<\/div>\n<\/div>\n<\/div>\n
\n
\n
minutes of the morning<\/div>\n<\/div>\n<\/div>\n
\n
\n
stocks most of the time will put in a<\/div>\n<\/div>\n<\/div>\n
\n
\n
high or a low for the day<\/div>\n<\/div>\n<\/div>\n
\n
\n
and so if something gets sold off the<\/div>\n<\/div>\n<\/div>\n
\n
\n
prior day and is coming off on the pro<\/div>\n<\/div>\n<\/div>\n
\n
\n
on this day two’s open we’ll look for it<\/div>\n<\/div>\n<\/div>\n
\n
\n
to put in its low right on the first 15<\/div>\n<\/div>\n<\/div>\n
\n
\n
minutes or so<\/div>\n<\/div>\n<\/div>\n
\n
\n
and so if something is coming into<\/div>\n<\/div>\n<\/div>\n
\n
\n
long-term support in the first 15<\/div>\n<\/div>\n<\/div>\n
\n
\n
minutes<\/div>\n<\/div>\n<\/div>\n
\n
\n
that’s when i’ll start to buy and then<\/div>\n<\/div>\n<\/div>\n
\n
\n
i’ll look for it at ten o’clock is it<\/div>\n<\/div>\n<\/div>\n
\n
\n
holding above the morning high<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then perhaps add to the position<\/div>\n<\/div>\n<\/div>\n
\n
\n
there so that’s on day two<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then my expectation is if it starts<\/div>\n<\/div>\n<\/div>\n
\n
\n
to bounce on day three if it gets into<\/div>\n<\/div>\n<\/div>\n
\n
\n
the first bounce area<\/div>\n<\/div>\n<\/div>\n
\n
\n
that’s a really good spot to take some<\/div>\n<\/div>\n<\/div>\n
\n
\n
profits now i labeled that as the first<\/div>\n<\/div>\n<\/div>\n
\n
\n
potential bounce area on this chart<\/div>\n<\/div>\n<\/div>\n
\n
\n
we’re looking at<\/div>\n<\/div>\n<\/div>\n
\n
\n
because prior to match putting in its<\/div>\n<\/div>\n<\/div>\n
\n
\n
high<\/div>\n<\/div>\n<\/div>\n
\n
\n
i mean it pulled back to that price and<\/div>\n<\/div>\n<\/div>\n
\n
\n
it’s all about psychology so people are<\/div>\n<\/div>\n<\/div>\n
\n
\n
watching the stock bounce<\/div>\n<\/div>\n<\/div>\n
\n
\n
they see oh it’s it’s at this pivot low<\/div>\n<\/div>\n<\/div>\n
\n
\n
i’m going to maybe take some profits<\/div>\n<\/div>\n<\/div>\n
\n
\n
there it takes a few people to take<\/div>\n<\/div>\n<\/div>\n
\n
\n
profits and before you know it it pulls<\/div>\n<\/div>\n<\/div>\n
\n
\n
back<\/div>\n<\/div>\n<\/div>\n
\n
\n
the good thing about it is when it pulls<\/div>\n<\/div>\n<\/div>\n
\n
\n
back from that first potential bounce<\/div>\n<\/div>\n<\/div>\n
\n
\n
area<\/div>\n<\/div>\n<\/div>\n
\n
\n
it starts to then form an uptrend and<\/div>\n<\/div>\n<\/div>\n
\n
\n
then once the up trend is formed and it<\/div>\n<\/div>\n<\/div>\n
\n
\n
makes another higher low<\/div>\n<\/div>\n<\/div>\n
\n
\n
we can feel comfortable until that trend<\/div>\n<\/div>\n<\/div>\n
\n
\n
breaks to<\/div>\n<\/div>\n<\/div>\n
\n
\n
go to the next target or ultimately to<\/div>\n<\/div>\n<\/div>\n
\n
\n
the third target on the right part of<\/div>\n<\/div>\n<\/div>\n
\n
\n
the chart<\/div>\n<\/div>\n<\/div>\n
\n
\n
which just erases the entire download<\/div>\n<\/div>\n<\/div>\n
\n
\n
from the announcement the next thing we<\/div>\n<\/div>\n<\/div>\n
\n
\n
want to take a look at<\/div>\n<\/div>\n<\/div>\n
\n
\n
is what happened to match in the two<\/div>\n<\/div>\n<\/div>\n
\n
\n
years since that sell-off<\/div>\n<\/div>\n<\/div>\n
\n
\n
in the middle of the chart you can kind<\/div>\n<\/div>\n<\/div>\n
\n
\n
of see the markup area from 2018<\/div>\n<\/div>\n<\/div>\n
\n
\n
and lo and behold the fact that facebook<\/div>\n<\/div>\n<\/div>\n
\n
\n
decided to<\/div>\n<\/div>\n<\/div>\n
\n
\n
you know launch at some indeterminate<\/div>\n<\/div>\n<\/div>\n
\n
\n
point in the future<\/div>\n<\/div>\n<\/div>\n
\n
\n
a competing product had no impact on its<\/div>\n<\/div>\n<\/div>\n
\n
\n
long-term prospects<\/div>\n<\/div>\n<\/div>\n
\n
\n
and in fact it’s actually tripled in the<\/div>\n<\/div>\n<\/div>\n
\n
\n
last few years<\/div>\n<\/div>\n<\/div>\n
\n
\n
or the last couple of years from that<\/div>\n<\/div>\n<\/div>\n
\n
\n
sell-off that day it’s it’s uh<\/div>\n<\/div>\n<\/div>\n
\n
\n
it’s gone from 35 to about 115 a share<\/div>\n<\/div>\n<\/div>\n
\n
\n
and so that’s that’s where it is two<\/div>\n<\/div>\n<\/div>\n
\n
\n
years later so i want to take a look<\/div>\n<\/div>\n<\/div>\n
\n
\n
um at a more recent example and actually<\/div>\n<\/div>\n<\/div>\n
\n
\n
the reason i’m doing this this video<\/div>\n<\/div>\n<\/div>\n
\n
\n
in the last month or so it was like it<\/div>\n<\/div>\n<\/div>\n
\n
\n
seemed like every few days there was<\/div>\n<\/div>\n<\/div>\n
\n
\n
another headline about peloton peloton<\/div>\n<\/div>\n<\/div>\n
\n
\n
so the thing you need to understand<\/div>\n<\/div>\n<\/div>\n
\n
\n
about peloton it’s similar to it’s it’s<\/div>\n<\/div>\n<\/div>\n
\n
\n
a momentum stack<\/div>\n<\/div>\n<\/div>\n
\n
\n
that means it’s high growth it attracts<\/div>\n<\/div>\n<\/div>\n
\n
\n
momentum hedge funds momentum investors<\/div>\n<\/div>\n<\/div>\n
\n
\n
and you know those those types of<\/div>\n<\/div>\n<\/div>\n
\n
\n
situations always attract a lot of short<\/div>\n<\/div>\n<\/div>\n
\n
\n
sellers as well i don’t know what the<\/div>\n<\/div>\n<\/div>\n
\n
\n
short interest is right now<\/div>\n<\/div>\n<\/div>\n
\n
\n
in peloton but it’s probably pretty high<\/div>\n<\/div>\n<\/div>\n
\n
\n
maybe lower than it was when it was in<\/div>\n<\/div>\n<\/div>\n
\n
\n
forty dollars now it’s over a hundred<\/div>\n<\/div>\n<\/div>\n
\n
\n
um very similar to tesla in this sense<\/div>\n<\/div>\n<\/div>\n
\n
\n
that um that it attracts a lot of short<\/div>\n<\/div>\n<\/div>\n
\n
\n
sellers<\/div>\n<\/div>\n<\/div>\n
\n
\n
and the competition’s always coming and<\/div>\n<\/div>\n<\/div>\n
\n
\n
so palatine<\/div>\n<\/div>\n<\/div>\n
\n
\n
um we just started to see headlines it<\/div>\n<\/div>\n<\/div>\n
\n
\n
was like in august<\/div>\n<\/div>\n<\/div>\n
\n
\n
apple was doing something with fitness<\/div>\n<\/div>\n<\/div>\n
\n
\n
and they were going to compete<\/div>\n<\/div>\n<\/div>\n
\n
\n
peloton shares dip then recover<\/div>\n<\/div>\n<\/div>\n
\n
\n
after report possible new competition<\/div>\n<\/div>\n<\/div>\n
\n
\n
from apple<\/div>\n<\/div>\n<\/div>\n
\n
\n
um on that apple announcement what was<\/div>\n<\/div>\n<\/div>\n
\n
\n
very different<\/div>\n<\/div>\n<\/div>\n
\n
\n
was that news came out before the market<\/div>\n<\/div>\n<\/div>\n
\n
\n
opened<\/div>\n<\/div>\n<\/div>\n
\n
\n
and so before the market opens you’re<\/div>\n<\/div>\n<\/div>\n
\n
\n
not going to have those algorithms<\/div>\n<\/div>\n<\/div>\n
\n
\n
scanning the bloomberg headlines to<\/div>\n<\/div>\n<\/div>\n
\n
\n
short because they are going to treat<\/div>\n<\/div>\n<\/div>\n
\n
\n
during<\/div>\n<\/div>\n<\/div>\n
\n
\n
normal market hours so when a headline<\/div>\n<\/div>\n<\/div>\n
\n
\n
comes out<\/div>\n<\/div>\n<\/div>\n
\n
\n
in the pre-market most of your selling<\/div>\n<\/div>\n<\/div>\n
\n
\n
your your people trying to get short and<\/div>\n<\/div>\n<\/div>\n
\n
\n
take advantage of those headlines<\/div>\n<\/div>\n<\/div>\n
\n
\n
are going to be human traders and so<\/div>\n<\/div>\n<\/div>\n
\n
\n
human traders<\/div>\n<\/div>\n<\/div>\n
\n
\n
um you can see the in the middle of the<\/div>\n<\/div>\n<\/div>\n
\n
\n
chart there i’ve circled that it’s<\/div>\n<\/div>\n<\/div>\n
\n
\n
gapping lower a few percent<\/div>\n<\/div>\n<\/div>\n
\n
\n
and they’re they’re shorting when the<\/div>\n<\/div>\n<\/div>\n
\n
\n
market opens<\/div>\n<\/div>\n<\/div>\n
\n
\n
if there’s no sell orders materializing<\/div>\n<\/div>\n<\/div>\n
\n
\n
from the algos<\/div>\n<\/div>\n<\/div>\n
\n
\n
and it goes right up those human traders<\/div>\n<\/div>\n<\/div>\n
\n
\n
that shorter in the pre-market they’re<\/div>\n<\/div>\n<\/div>\n
\n
\n
going to have to cover<\/div>\n<\/div>\n<\/div>\n
\n
\n
so this is a very different scenario<\/div>\n<\/div>\n<\/div>\n
\n
\n
very important to remember<\/div>\n<\/div>\n<\/div>\n
\n
\n
when the breaking news headline comes if<\/div>\n<\/div>\n<\/div>\n
\n
\n
it’s not intraday<\/div>\n<\/div>\n<\/div>\n
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if it’s pre-market and human traders are<\/div>\n<\/div>\n<\/div>\n
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shorting in the pre-market especially a<\/div>\n<\/div>\n<\/div>\n
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stock<\/div>\n<\/div>\n<\/div>\n
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where you can look on the chart it<\/div>\n<\/div>\n<\/div>\n
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already sold off a few days before so it<\/div>\n<\/div>\n<\/div>\n
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was already ready to have a balance<\/div>\n<\/div>\n<\/div>\n
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and so you should be ready to take<\/div>\n<\/div>\n<\/div>\n
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advantage of that if it gaps lower<\/div>\n<\/div>\n<\/div>\n
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right on the open if the stock if the<\/div>\n<\/div>\n<\/div>\n
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first move is up and gets above the<\/div>\n<\/div>\n<\/div>\n
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pre-market high<\/div>\n<\/div>\n<\/div>\n
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you should immediately be looking to buy<\/div>\n<\/div>\n<\/div>\n
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and looking for what it’s called<\/div>\n<\/div>\n<\/div>\n
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filling the gap going positive on the<\/div>\n<\/div>\n<\/div>\n
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day<\/div>\n<\/div>\n<\/div>\n
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those were the initial headlines and<\/div>\n<\/div>\n<\/div>\n
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then we got some more headlines<\/div>\n<\/div>\n<\/div>\n
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where there was going to be some amazon<\/div>\n<\/div>\n<\/div>\n
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competition this was like a couple of<\/div>\n<\/div>\n<\/div>\n
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weeks later<\/div>\n<\/div>\n<\/div>\n
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here’s all the headlines amazon<\/div>\n<\/div>\n<\/div>\n
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competition low price<\/div>\n<\/div>\n<\/div>\n
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bike oh my god amazon’s the biggest<\/div>\n<\/div>\n<\/div>\n
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retailer in the world<\/div>\n<\/div>\n<\/div>\n
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what’s going to happen to peloton their<\/div>\n<\/div>\n<\/div>\n
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business model is over<\/div>\n<\/div>\n<\/div>\n
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no of course that’s not the case amazon<\/div>\n<\/div>\n<\/div>\n
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as big as they are<\/div>\n<\/div>\n<\/div>\n
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have announced a ton of initiatives over<\/div>\n<\/div>\n<\/div>\n
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the years and you know the one that<\/div>\n<\/div>\n<\/div>\n
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comes to top of mind is they were going<\/div>\n<\/div>\n<\/div>\n
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to do a smartphone<\/div>\n<\/div>\n<\/div>\n
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which failed miserably and so this is an<\/div>\n<\/div>\n<\/div>\n
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example<\/div>\n<\/div>\n<\/div>\n
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of where momentum hedge funds and<\/div>\n<\/div>\n<\/div>\n
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investors they love headlines like this<\/div>\n<\/div>\n<\/div>\n
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because if they happen outside of market<\/div>\n<\/div>\n<\/div>\n
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hours<\/div>\n<\/div>\n<\/div>\n
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and the stock is going lower they are<\/div>\n<\/div>\n<\/div>\n
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ready to buy<\/div>\n<\/div>\n<\/div>\n
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and the stock will move higher in fact<\/div>\n<\/div>\n<\/div>\n
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we talked about this one in the morning<\/div>\n<\/div>\n<\/div>\n
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meeting somebody said<\/div>\n<\/div>\n<\/div>\n
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somebody asked in the morning meeting<\/div>\n<\/div>\n<\/div>\n
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and by the way what we do in our morning<\/div>\n<\/div>\n<\/div>\n
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meeting<\/div>\n<\/div>\n<\/div>\n
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is we find the most in place docs for<\/div>\n<\/div>\n<\/div>\n
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the day the way we do this is we use our<\/div>\n<\/div>\n<\/div>\n
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scanner<\/div>\n<\/div>\n<\/div>\n
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we have a pre-market scanner where it<\/div>\n<\/div>\n<\/div>\n
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identifies things that are moving in the<\/div>\n<\/div>\n<\/div>\n
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pre-market what the short interest is<\/div>\n<\/div>\n<\/div>\n
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\n
if you want to learn more about the<\/div>\n<\/div>\n<\/div>\n
\n
\n
pre-market scanner in our stock<\/div>\n<\/div>\n<\/div>\n
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\n
selection process<\/div>\n<\/div>\n<\/div>\n
\n
\n
check out the two-hour free workshop<\/div>\n<\/div>\n<\/div>\n
\n
\n
tradingworkshop.com<\/div>\n<\/div>\n<\/div>\n
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\n
as long as you are in the right stocks<\/div>\n<\/div>\n<\/div>\n
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each day<\/div>\n<\/div>\n<\/div>\n
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i found that you’re much more likely to<\/div>\n<\/div>\n<\/div>\n
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be consistently profitable<\/div>\n<\/div>\n<\/div>\n
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experienced intraday traders going to be<\/div>\n<\/div>\n<\/div>\n
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positive 80<\/div>\n<\/div>\n<\/div>\n
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of the days um if they’re in the right<\/div>\n<\/div>\n<\/div>\n
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stocks the next video i do i will talk<\/div>\n<\/div>\n<\/div>\n
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about<\/div>\n<\/div>\n<\/div>\n
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the last few months where i only have<\/div>\n<\/div>\n<\/div>\n
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one negative day and why that is<\/div>\n<\/div>\n<\/div>\n
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stock selection learn about it more<\/div>\n<\/div>\n<\/div>\n
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\n
trading workshop.com<\/div>\n<\/div>\n<\/div>\n
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\n
okay so getting back to the breaking<\/div>\n<\/div>\n<\/div>\n
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news on amazon<\/div>\n<\/div>\n<\/div>\n
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there’s going to be this competing bike<\/div>\n<\/div>\n<\/div>\n
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oh my goodness oh my gracious<\/div>\n<\/div>\n<\/div>\n
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it’s gapping lower in the pre-market in<\/div>\n<\/div>\n<\/div>\n
\n
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this case if we zoom in<\/div>\n<\/div>\n<\/div>\n
\n
\n
on the open it’s always about it’s<\/div>\n<\/div>\n<\/div>\n
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always about the first move and so in<\/div>\n<\/div>\n<\/div>\n
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this case<\/div>\n<\/div>\n<\/div>\n
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it actually the first move was to the<\/div>\n<\/div>\n<\/div>\n
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downside and so<\/div>\n<\/div>\n<\/div>\n
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the way that we look at it is in our in<\/div>\n<\/div>\n<\/div>\n
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our pre-market prep is<\/div>\n<\/div>\n<\/div>\n
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what is the level the key level we’re<\/div>\n<\/div>\n<\/div>\n
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looking at and in this case below 90<\/div>\n<\/div>\n<\/div>\n
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we knew 89 and 88 with support and so<\/div>\n<\/div>\n<\/div>\n
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what i basically said was like look if<\/div>\n<\/div>\n<\/div>\n
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it takes out the pre-market low<\/div>\n<\/div>\n<\/div>\n
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and it’s below 80 90 you can trade it on<\/div>\n<\/div>\n<\/div>\n
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the short side but understand<\/div>\n<\/div>\n<\/div>\n
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that if it gets back above 90 dollars<\/div>\n<\/div>\n<\/div>\n
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and starts to hold<\/div>\n<\/div>\n<\/div>\n
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and then moves back above pre-market<\/div>\n<\/div>\n<\/div>\n
\n
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resistance<\/div>\n<\/div>\n<\/div>\n
\n
\n
we can look for a reversal because this<\/div>\n<\/div>\n<\/div>\n
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is not news<\/div>\n<\/div>\n<\/div>\n
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that the momentum hedge funds are going<\/div>\n<\/div>\n<\/div>\n
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to take seriously<\/div>\n<\/div>\n<\/div>\n
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\n
in fact a few days later amazon the<\/div>\n<\/div>\n<\/div>\n
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whole thing ended up being a little bit<\/div>\n<\/div>\n<\/div>\n
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of a fraud<\/div>\n<\/div>\n<\/div>\n
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\n
so the company that said it was an<\/div>\n<\/div>\n<\/div>\n
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\n
amazon bike um amazon<\/div>\n<\/div>\n<\/div>\n
\n
\n
issued them i think a cease and desist<\/div>\n<\/div>\n<\/div>\n
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order it wasn’t even amazon they were<\/div>\n<\/div>\n<\/div>\n
\n
\n
trying that company was trying to<\/div>\n<\/div>\n<\/div>\n
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uh get on i don’t know play off amazon’s<\/div>\n<\/div>\n<\/div>\n
\n
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name or something like that but<\/div>\n<\/div>\n<\/div>\n
\n
\n
regardless from an intraday perspective<\/div>\n<\/div>\n<\/div>\n
\n
\n
the news comes out in the pre-market<\/div>\n<\/div>\n<\/div>\n
\n
\n
before the market opens i’ve circled<\/div>\n<\/div>\n<\/div>\n
\n
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that little area for you<\/div>\n<\/div>\n<\/div>\n
\n
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um i call it reversal bars the reason<\/div>\n<\/div>\n<\/div>\n
\n
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why two bars is important sometimes<\/div>\n<\/div>\n<\/div>\n
\n
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you’ll get one green bar<\/div>\n<\/div>\n<\/div>\n
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then it’ll roll over again and take out<\/div>\n<\/div>\n<\/div>\n
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the pre-market excuse me the<\/div>\n<\/div>\n<\/div>\n
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morning low it actually will be a good<\/div>\n<\/div>\n<\/div>\n
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short but once you have that second<\/div>\n<\/div>\n<\/div>\n
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green bar<\/div>\n<\/div>\n<\/div>\n
\n
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on the five minute and it closes there<\/div>\n<\/div>\n<\/div>\n
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at that point and if it’s above 90 a<\/div>\n<\/div>\n<\/div>\n
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share um<\/div>\n<\/div>\n<\/div>\n
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you’re looking for it to actually move<\/div>\n<\/div>\n<\/div>\n
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higher for the day<\/div>\n<\/div>\n<\/div>\n
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\n
and i want to actually take a look at i<\/div>\n<\/div>\n<\/div>\n
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want to take a look at a higher time<\/div>\n<\/div>\n<\/div>\n
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frame<\/div>\n<\/div>\n<\/div>\n
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the way that we talked about it was if<\/div>\n<\/div>\n<\/div>\n
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it actually closes at the high<\/div>\n<\/div>\n<\/div>\n
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the because it had already sold off a<\/div>\n<\/div>\n<\/div>\n
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few days before<\/div>\n<\/div>\n<\/div>\n
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this is one where we can look for it to<\/div>\n<\/div>\n<\/div>\n
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trend up and work its way back up to a<\/div>\n<\/div>\n<\/div>\n
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\n
hundred dollars<\/div>\n<\/div>\n<\/div>\n
\n
\n
and so just to give you a recap of this<\/div>\n<\/div>\n<\/div>\n
\n
\n
particular trading setup<\/div>\n<\/div>\n<\/div>\n
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competition there’s announcements from<\/div>\n<\/div>\n<\/div>\n
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competition it it it<\/div>\n<\/div>\n<\/div>\n
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triggers it triggers knee-jerk reaction<\/div>\n<\/div>\n<\/div>\n
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and selling that knee-jerk reaction and<\/div>\n<\/div>\n<\/div>\n
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selling the first people shorting is<\/div>\n<\/div>\n<\/div>\n
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always going to be algorithms<\/div>\n<\/div>\n<\/div>\n
\n
\n
but you can have scanning software based<\/div>\n<\/div>\n<\/div>\n
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on volatility<\/div>\n<\/div>\n<\/div>\n
\n
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you set a bunch of different things we<\/div>\n<\/div>\n<\/div>\n
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do it internally on our platform<\/div>\n<\/div>\n<\/div>\n
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\n
obviously if you’re using tradestation<\/div>\n<\/div>\n<\/div>\n
\n
\n
as a platform or you’re using a scanning<\/div>\n<\/div>\n<\/div>\n
\n
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technology<\/div>\n<\/div>\n<\/div>\n
\n
\n
you can set those scans up and<\/div>\n<\/div>\n<\/div>\n
\n
\n
you can in the first few minutes jump on<\/div>\n<\/div>\n<\/div>\n
\n
\n
board on a momentum trade<\/div>\n<\/div>\n<\/div>\n
\n
\n
my favorite trade intraday is after that<\/div>\n<\/div>\n<\/div>\n
\n
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first initial momentum down whether it’s<\/div>\n<\/div>\n<\/div>\n
\n
\n
10 or 15 minutes of down<\/div>\n<\/div>\n<\/div>\n
\n
\n
i watch the retracement normal<\/div>\n<\/div>\n<\/div>\n
\n
\n
retracement rules apply<\/div>\n<\/div>\n<\/div>\n
\n
\n
25 30 retracement look for it to start<\/div>\n<\/div>\n<\/div>\n
\n
\n
to move sideways<\/div>\n<\/div>\n<\/div>\n
\n
\n
and then look for that second leg to the<\/div>\n<\/div>\n<\/div>\n
\n
\n
downside much more likely to work<\/div>\n<\/div>\n<\/div>\n
\n
\n
obviously intraday<\/div>\n<\/div>\n<\/div>\n
\n
\n
always a good swing long as i said at<\/div>\n<\/div>\n<\/div>\n
\n
\n
the beginning of the video<\/div>\n<\/div>\n<\/div>\n
\n
\n
it’s one out of 100 times where you have<\/div>\n<\/div>\n<\/div>\n
\n
\n
apples coming along with an iphone or a<\/div>\n<\/div>\n<\/div>\n
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\n
tesla’s coming along with an electric<\/div>\n<\/div>\n<\/div>\n
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car<\/div>\n<\/div>\n<\/div>\n
\n
\n
integrated with software and batteries<\/div>\n<\/div>\n<\/div>\n
\n
\n
and all these things disrupting an<\/div>\n<\/div>\n<\/div>\n
\n
\n
industry<\/div>\n<\/div>\n<\/div>\n
\n
\n
the most what happens 95 plus percent of<\/div>\n<\/div>\n<\/div>\n
\n
\n
the time<\/div>\n<\/div>\n<\/div>\n
\n
\n
is one of these big players comes in<\/div>\n<\/div>\n<\/div>\n
\n
\n
whether it’s a facebook or an apple or<\/div>\n<\/div>\n<\/div>\n
\n
\n
an amazon or a google<\/div>\n<\/div>\n<\/div>\n
\n
\n
they’re not going to destroy the sector<\/div>\n<\/div>\n<\/div>\n
\n
\n
leader<\/div>\n<\/div>\n<\/div>\n
\n
\n
they are going to create knee-jerk<\/div>\n<\/div>\n<\/div>\n
\n
\n
selling and the smarter<\/div>\n<\/div>\n<\/div>\n
\n
\n
funds larger retail investors<\/div>\n<\/div>\n<\/div>\n
\n
\n
they’re going to step in in the next few<\/div>\n<\/div>\n<\/div>\n
\n
\n
days<\/div>\n<\/div>\n<\/div>\n
\n
\n
and these stocks are going to balance<\/div>\n<\/div>\n<\/div>\n
\n
\n
and you’re going to look back<\/div>\n<\/div>\n<\/div>\n
\n
\n
in a couple of weeks and the stocks are<\/div>\n<\/div>\n<\/div>\n
\n
\n
going to retest the high and depending<\/div>\n<\/div>\n<\/div>\n
\n
\n
on<\/div>\n<\/div>\n<\/div>\n
\n
\n
overall market conditions how strong is<\/div>\n<\/div>\n<\/div>\n
\n
\n
the market that you’re in<\/div>\n<\/div>\n<\/div>\n
\n
\n
and how strong is the uptrend in that<\/div>\n<\/div>\n<\/div>\n
\n
\n
particular stock at that particular time<\/div>\n<\/div>\n<\/div>\n
\n
\n
perhaps not even bounce back to where it<\/div>\n<\/div>\n<\/div>\n
\n
\n
started from but then start<\/div>\n<\/div>\n<\/div>\n
\n
\n
the next leg higher hope you learned<\/div>\n<\/div>\n<\/div>\n
\n
\n
something here<\/div>\n<\/div>\n<\/div>\n
\n
\n
look out for look at it for the next<\/div>\n<\/div>\n<\/div>\n
\n
\n
time this happens it usually happens a<\/div>\n<\/div>\n<\/div>\n
\n
\n
few times a year<\/div>\n<\/div>\n<\/div>\n
\n
\n
please take advantage<\/div>\n<\/div>\n<\/div>\n
\n
\n
<\/div><\/div>\n<\/div>\n<\/div>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In this video, Steve Spencer talks about breaking news trades that involve momentum stocks. If trading momentum stocks is of interest to you, then you won’t want to miss this video.<\/p>\n","protected":false},"author":290,"featured_media":50172,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[4189],"tags":[],"class_list":["post-50171","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-free-daily-trading-video","post_format-post-format-video"],"yoast_head":"\nThe Smartest Dumb Trade You'll Ever Make | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/the-smartest-dumb-trade-youll-ever-make\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Smartest Dumb Trade You'll Ever Make | SMB Training\" \/>\n<meta property=\"og:description\" content=\"In this video, Steve Spencer talks about breaking news trades that involve momentum stocks. If trading momentum stocks is of interest to you, then you won’t want to miss this video.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/the-smartest-dumb-trade-youll-ever-make\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2020-10-02T15:35:16+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2020\/10\/smartest-dumb-trade.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"smbcapital\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" 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