Interim Market Update March 3, 2021

[SOL]

If the Dow drops below 30K don't even dream of panicking. Tactical Investors never panic. The biggest crash is when you die, if you are not worried about your death, then there is no reason to panic over any other event. The trend is up so the stronger the correction the better the opportunity. Though the likelihood of a strong correction is average but if it comes to pass jump in joy. end of story

[AstuteShift]

Let’s see if hysteria will take over this market

[Eric]

Small thing... the Feb. 28th Portfolio Update was dated 2020 instead of 2021.

[SOL]

yes minor error but in the actual update we put the right date. From time to time we also can make silly mistakes lol

[Macca45]

If the Dow drops below 30K don't even dream of panicking. Tactical Investors never panic. The biggest crash is when you die, if you are not worried about your death, then there is no reason to panic over any other event. The trend is up so the stronger the correction the better the opportunity. Though the likelihood of a strong correction is average but if it comes to pass jump in joy. end of story

Hi Sol many of the Nasdaq stocks I own have been hammered this week. When you're using oversold ranges what are the specifics of the entry points and would you hold stocks that are 30%+ down at this stage? Most certainly made mistakes of buying at the wrong time. Appreciate this is a broad question but some general guidance is appreciated.
Many thanks.

[Yodean]

Hi Sol many of the Nasdaq stocks I own have been hammered this week. Would you hold stocks that are 30%+ down at this stage? Most certainly made mistake of buying at the wrong time.

My two cents: if you like those Nasdaq stocks you own that are down 30%+, continue to hold them and try to imagine what their price levels will be when the Nasdaq breaks 15k later this year, which is a high probability event; if you really, really like them, buy a bit more. But if looking at the red numbers next to them bugs you, probably best to just hold for the time being.

A lot of times in these markets, just waiting will correct a lot of so-called "mistakes."

[SOL]

Hi Sol many of the Nasdaq stocks I own have been hammered this week. When you're using oversold ranges what are the specifics of the entry points and would you hold stocks that are 30%+ down at this stage? Most certainly made mistakes of buying at the wrong time. Appreciate this is a broad question but some general guidance is appreciated.
Many thanks.
[/quote]


We use customised indicators and the reason for that is the way I work. I keep having them adjusted until I see patterns that reasonate. I look at the market in terms of patterns. Some stocks have great technical patterns (from a purely technical perspective) but the overall pattern does not appeal to me so I ignore them

I am stating this only to let you know you need to find indicators that speak to you. Tradingview.com is a good place to start for advanced charts. Simpler charts can be found on bigcharts.com

Focus on weekly and monthly charts (monthly are better). SO what we do is we wait for the stocks to move into the oversold ranges on the monthly charts, it takes patience and discipline but we will never get into a stock that is trading in the overbought ranges on the monthly charts no matter how great the outlook might be

Give me one or two examples of what you bought and I can take a look or other TA specialists can chime in but a symbol or two would be helpful.

Yodean also provided some sage advice

[Macca45]

Hi Sol many of the Nasdaq stocks I own have been hammered this week. Would you hold stocks that are 30%+ down at this stage? Most certainly made mistake of buying at the wrong time.

My two cents: if you like those Nasdaq stocks you own that are down 30%+, continue to hold them and try to imagine what their price levels will be when the Nasdaq breaks 15k later this year, which is a high probability event; if you really, really like them, buy a bit more. But if looking at the red numbers next to them bugs you, probably best to just hold for the time being.

A lot of times in these markets, just waiting will correct a lot of so-called "mistakes."

Thanks Yodean appreciate the feedback. What would your sell point be even if the stock appeared to be letting off steam after a great run? Or would 30-50% be more than letting off steam?

[Macca45]

Hi Sol many of the Nasdaq stocks I own have been hammered this week. When you're using oversold ranges what are the specifics of the entry points and would you hold stocks that are 30%+ down at this stage? Most certainly made mistakes of buying at the wrong time. Appreciate this is a broad question but some general guidance is appreciated.
Many thanks.

We use customised indicators and the reason for that is the way I work. I keep having them adjusted until I see patterns. I look at the market in terms of patterns. Some stocks have great technical patterns (from a purely technical perspective) but the overall pattern does not appeal to me so I ignore them

I stating this only to let you know you need to find indicators that speak to you. Tradingview.com is a good place to start for advanced charts. Simpler charts can be found on bigcharts.com

Focus on weekly and monthly charts (monthly are better). SO what we do is we wait for the stocks to move into the oversold ranges on the monthly charts, it takes patience and discipline but we will never get into a stock that is trading in the overbought ranges on the monthly charts no matter how great the outlook might be

Give me one or two examples of what you bought and I can take a look or other TA specialists can chime in but a symbol or two would be helpful.

Yodean also provided some sage advice
[/quote]
Hi Sol thanks a lot appreciate the advice. It would appear my issue is using Daily charts to find entry points on what have been momentum stocks, Peloton, Palantir, Lemonade and Fulgent Genetics are among them. All were bought in oversold ranges but clearly a shorter timeframe and have since fallen further. Would buying more at a lower price be a smart move with this group?

[SOL]

We don't trade the daily charts and on PTON and PLTR there is not enough data to come up with a good monthly chart. Generally, we would avoid such stocks, it does not mean they can't trend higher, but they don't meet our trading requirements. But as I stated it does not mean they can't trade higher, it's just not something we would get into even if both appeared set to trend higher as it would entail violating our trading rules and we never break the rules.

FLGT is trading in the overbought ranges on the monthly charts, so even if it looked like it could trend higher we would not get into it and there have been stocks that have trended higher when they are in the overbought ranges, but again we don't break our trading rules.

On a separate note, the Nasdaq high runners will let out twice as much steam as stocks on the Dow as the Nasdaq was on a tear so the current action is will within the acceptable limits. I am talking about the overall NASDAQ action.

[Macca45]

We don't trade the daily charts and on PTON and PLTR there is not enough data to come up with a good monthly chart. Generally, we would avoid such stocks, it does not mean they can't trend higher, but they don't meet our trading requirements. But as I stated it does not mean they can't trade higher, it's just not something we would get into even if both appeared set to trend higher as it would entail violating our trading rules and we never break the rules.

FLGT is trading in the overbought ranges on the monthly charts, so even if it looked like it could trend higher we would not get into it and there have been stocks that have trended higher when they are in the overbought ranges, but again we don't break our trading rules.

On a separate note, the Nasdaq high runners will let out twice as much steam as stocks on the Dow as the Nasdaq was on a tear so the current action is will within the acceptable limits. I am talking about the overall NASDAQ action.

Thanks Sol for taking the time. Will adjust entry points accordingly.

[AstuteShift]

Remember markets behave in cycles and it’s always important to see the sentiment first then see the chart pattern

In thinkorswim, there is a tool that is helpful called market sentiment that can help to gage whether the stock is in topping formation or bottom formation, also sentiment oscillators are helpful as well

Never bother with hourly or daily charts, too much noise. Weekly and monthly charts or you end up chasing momentum stocks and that’s a recipe for disaster. Never chase

Another is looking at stocks that are beaten up, at the bottom end of risk ranges. The masses never look at this stocks since they are beaten up but that’s where you want to be. Especially if it’s going to turn bullish

An example, is the US dollar, extremely oversold and everyone and their mother thinks the dollar is dead. In mass psychology thinking, this an example of a screaming buy



This is how you should view each stock and gage it

[symbios]

We don't trade the daily charts and on PTON and PLTR there is not enough data to come up with a good monthly chart. Generally, we would avoid such stocks, it does not mean they can't trend higher, but they don't meet our trading requirements. But as I stated it does not mean they can't trade higher, it's just not something we would get into even if both appeared set to trend higher as it would entail violating our trading rules and we never break the rules.

FLGT is trading in the overbought ranges on the monthly charts, so even if it looked like it could trend higher we would not get into it and there have been stocks that have trended higher when they are in the overbought ranges, but again we don't break our trading rules.

On a separate note, the Nasdaq high runners will let out twice as much steam as stocks on the Dow as the Nasdaq was on a tear so the current action is will within the acceptable limits. I am talking about the overall NASDAQ action.

Sol, can you elaborate on your trading requirements? Is market cap a consideration?

[SOL]

Market cap is not an issue, neither is the product they make or any other fundamental factor. However we might look at Short Interest and Insider activity as a bonus factor, but only after we feel the play is worth opening a long position.

I can't really explain the pattern i see not because I don't want to but as I stated in a previous thread how do you explain the colour green to a blind man.

However I will attempt to put some aspects of it into words

I prefer stocks that are trading in the extremely oversold ranges on the monthly charts and you can use any TA tool that appeals to you. We focus on Modified MACDs and Modified RSI, plus linear reggression bands. And I am testing out Modified Keltner channels and A modified type of double stochastics

If you look at enough charts with the tools of your choice you will start to notice a pattern, this is the pattern i see. So even if a stock is trading in the extremely oversold ranges and I don't like the pattern I won't get into it. Having said that, in general, stocks that are trading in the extremely oversold ranges on the monthly charts generally trend a bit higher and the risk to reward ratio is generally in favour of the investor.

So the focus should be one finding TA tools that appeal to you and then waiting for them to trade to the oversold ranges on the monthly charts. It takes patience to wait for a stock to pullback to the oversold ranges on the monthly charts and that is why we maintain a database of potential candidates that we constantly monitor.

[Macca45]

Remember markets behave in cycles and it’s always important to see the sentiment first then see the chart pattern

In thinkorswim, there is a tool that is helpful called market sentiment that can help to gage whether the stock is in topping formation or bottom formation, also sentiment oscillators are helpful as well

Never bother with hourly or daily charts, too much noise. Weekly and monthly charts or you end up chasing momentum stocks and that’s a recipe for disaster. Never chase

Another is looking at stocks that are beaten up, at the bottom end of risk ranges. The masses never look at this stocks since they are beaten up but that’s where you want to be. Especially if it’s going to turn bullish

An example, is the US dollar, extremely oversold and everyone and their mother thinks the dollar is dead. In mass psychology thinking, this an example of a screaming buy



This is how you should view each stock and gage it

Great advice thanks. If only I'd asked before last week!!