Category: Commentary

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Each of us has been to a traditional car dealer at least once in our life. Let me take a wild guess. The experience of most of us has not been great. With the risk of offending, most car dealers are pushy, sleazy salesmen who don’t really have your best interest in mind. It seems Carvana has solved that issue because people are raving about their experience on social media. Happy customers tell their friends and come back.

I’ve traded CVNA multiple times in the past year and a half. The reason is simple. It’s a high momentum stock and those type of stocks are among the best trading vehicles in any market. When I saw it bouncing from its rising 200dma today, I shared the following idea on StockTwits and Twitter:

CVNA kept going up the rest of the day fueled by the risk-on mood of the overall market. If the market bounce keeps going, CVNA is very likely to test its 50-day moving average near $52-53, where it will probably encounter a significant resistance and offer a decent risk/reward short setup.

If CVNA loses 34, it will likely tests $20-25, which would be a great spot for a long-term investor to back up the truck.

Check out my latest book: Swing Trading with Options – How to trade big trends for big returns.

All charts on Momentum Monday are powered by MarketSmith

The market mood matters a lot in the short-term. Lately, it has been quite sour. Look at the market reactions to decent earnings reports. Amazon, Google, Netflix among many others beat earnings estimates and yet the market found a reason to push them lower. This is what happens in a weak corrective market. Good news is ignored, the bad news is magnified and over-discounted.

There are two types of stocks that outperform after a big market correction:

1) The ones that got hit the worst.
2) The ones that held the best.

In this episode of Momentum Monday, we took a quick look at some of the stocks that might turn into potential future leaders and we commented on the price action in popular stocks like MCD, WMT, AAPL, SBUX, TWTR, FB, etc.

Don’t forget to check out my latest book: Swing Trading with Options – How to trade big trends for big profits.

All charts on Momentum Monday are powered by MarketSmith

The only people that are happy with this market are short-sellers, intra-day traders and your grandmother, who probably owns a bunch of utilities and consumer staple stocks.

Today’s selloff was pretty nasty. It brought the Nasdaq 100 deep below its 200-day moving average. V-shaped recoveries typically don’t happen below a 200-day moving average. Selloffs like these take a much longer time to heal.

On today’s show, we took a look at some important technical levels and shared some trading ideas. Howard has a list of stocks and indexes he wants to buy on weakness – TEAM, OKTA, AAPL, TQQQ, SPY. Since correlations are extremely high in corrective markets, I rather focus on trading 3x ETFs intraday. My go-to trading vehicles in this market are TQQQ and LABU (and their respective opposites: SQQQ and LABD).

Don’t forget to check out my latest book: Swing Trading with Options – How to trade big trends for big profits.