Today’s shout out goes to Howard D. from the Millionaire Roadmap.
“My MBOT trade on the first run up (in @ $9.68 | out at $10.25) put $2,415.97 in my pocket and over $3,300 on the day. Thanks Nathan and Jason for the amazing education. Just above 10% in the account so far not even a month into 2019. “Investing” in mutual funds and ETF’s in the past I was lucky to get this in a year.”
+$122,069.42 in the books 24-days into the year for me.
TEACHABLE MOMENT
U.S. stock futures are modestly green Thursday morning after a few days of selling pressure at resistance. The IWM seen below, is the second most popular futures focused equity fund.
Now for those of you who don’t know, the IWM is the iShares Russell 2000 exchange-traded fund composed of U.S. small cap companies (penny stocks) known as the Russell 2000 Index. Small cap stocks are defined by a company’s capitalization as determined by the total market value of its publicly traded shares. Small cap stocks generally have a market capitalization ranging from $300 million to about $2 billion. Micro caps range from $50 million to $300 million and nano caps have market caps below $50 million.
Since I trade small, micro and nano caps under $10, I use the IWM to predict the next few days for small caps and as a measure of the risk I’m willing to take on penny stocks.
So here’s the key takeaway on monitoring the IWM. From September through Christmas, or the last 4-months of 2018, the small cap index crashed from $173.12 to $127.98. This was a massive -26% flush in just 4-months. But my stock trading made me nearly +$250,000 during that stretch.
So why even monitor the IWM? Write this down. I monitor the IWM because “HOW” I trade during a flush is different than how I trade when the IWM is consolidating. And “HOW” I trade during and uptrend is different than when the IWM is trending up.
To make nearly +$250,000 on stocks when the IWM was crashing at the end of 2018 I was buying fish hooks. There were nearly 400 trade ideas daily that fit the fish hook pattern — all I did was target the best washed out companies because they were certain to bounce.
To make over +$100,000 to start 2019 I continued targeting fish hooks while I could, but as you can see above, the IWM put in a fish hook of its own and a rising tide does lift all boats — there’s less than 20 fish hook trade ideas this morning compared to 400+ just a month ago.
But since the small cap index IWM has been bouncing – rockets (breakouts) are everywhere! So as the scan produces less fish hooks, it naturally shows me more fibonacci setups (rockets or breakouts). So Wednesday I made nearly +$10,000 trading, half of which was on this rocket.
Remember what I wrote in Tuesday’s afternoon watch list?
“Market is at major support so I’m looking to take calculated shots on small caps, specifically those that are diverging from the overall market today i.e. green on a red day. This strategy often makes me huge gains if I get lucky and catch good news on the trade idea — and odds go up that could be looming on these since they are bucking the trend.”
Remember what I said about BOXL?
“BOXL – Green on a red day. Tested $2.10 a few times this year but retraced. Volume is growing and triple tops never are, so I’m looking for a $2.70 move on this one.”
Some key takeaways here.
My Jason Bond Picks scan in FINVIZ.com found the breakout worthy stock. I put it on my watch list for you. I monitored it and bought it. I sent a text and email alert when I took action. That was around $2.10 Tuesday. Wednesday shares hit $4.10, nearly 100% from my alert overnight. I sold in the $3’s and alerted everyone. Sure I sold way too early, but you can’t go broke taking profits — what goes up does eventually fatigue and come back down.
Did you know BOXL was not only one of the most active stocks on Wednesday (nearly $100 million traded hands) but for most of the day it was the top % gainer too.
My job as your mentor is to teach you about the market (penny stocks or IWM), my patterns (fish hook and rocket), my scans (oversold and breakout), provide you with a daily primer (watch list) and send you actionable ideas when I put money in or take it out of the market.
All of that is provided at Jason Bond Picks. I think that’s an awesome way to teach trading. But I didn’t stop there, I’ve provided the Millionaire Roadmap for anyone not only looking to get direct mentoring on the above strategy, but that of my mentor (Jeff Bishop) and most successful clients (Nathan Bear and Taylor Conway) — 4 different strategies with accompanying lessons — all live streaming portfolios, order flow and coaching.
Whether you use Jason Bond Picks or Millionaire Roadmap (which includes Jason Bond Picks), I’m proud of what I’ve built here, hope it’s helping you and I couldn’t have done it without having amazing people all around me just like you. I’m so excited about trading and our future together. Now enough on all that, let’s get down to business Thursday.
As Thursday’s market nears open I’m holding a nice looking basket of swing trades comprised of a few fish hooks and a few rockets. To see and monitor the positions go to the Jason Bond Picks live streaming portfolio which is a direct feed from my E*TRADE Pro.
In addition to those open swing trades, all of which I hope to make 5-20% on in 1-4 days, I’m watching the following stocks headed into the weekend.
SPI – Given its history of not holding breakouts, normally I wouldn’t consider a chart like this. However, the proximity to the weekend could get aggressive short sellers, who moved in on day one of the rally, on the bid and tripping over each other — especially since a major pivot at $2.90 is just ahead. If shares hold the upper $2’s, I bet this retests $4 and above there it could get rowdy to $5 or $6.
BLNK – History of big multi-day runs has me interested in BLNK Thursday for the same reason as SPI — the proximity to the weekend could drive a short squeeze. It’s in play above $2 for a move to $3+ into the weekend. Like SPI, this is a very volatile name and not for beginners who often struggle to make decisions quickly and in turn become long-term bag holders. NO bag holders at Jason Bond Picks so if you can’t trade momentum yet — don’t worry, we’ve all been there — but save yourself the headache of holding bags, you thank me later as your portfolio grows. Now if this one catches a bid again, there’s an outside chance this gets to $4.
FENG – Neither a fish hook or a rocket, FENG is a basing pattern I like as a technical swing trade above the now $3.20’s support for a move to $4+ for profit. Over the years I’ve found this stock to pattern trade very nicely and from time to time I’ve walked into good news, simply working the pattern, for bigger wins too. Probably only works if the IWM continues to trend higher, which I think is likely after the few days of rest its had.
ALT – Rising volume has drawn me into this one despite not having the perfect rest and retest pattern (fibonacci). Above $3.20 I’m very interested in a move to $4 and think it could run above that level if that happens. History of monster spikes on massive volume illustrates why I’m hunting this one now that volume is building sporadically. Like SPI and BLNK, this is a bucking bronco right now so leave it alone if you’re not a cowboy / cowgirl just yet.
I’m sure more ideas will present themselves as the day goes on, so I’ll send a midday watch list targeting my favorite ‘rest and retest pattern’ or Fibonacci retracement. Thursday’s into Friday is the absolute best time to target that pattern and can lead to monster gains before happy hour headed into the weekend.