040: Buy breakouts instead of false bottoms



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Financial Movers Podcast #40

(08/20/20)


PODCAST OUTLINE

Welcome to the Financial Movers Podcast. (today is, the time is e/t, and this is episode # …. , and I’m speaking to you from ...) No matter if you’ve been listening to this podcast since episode 1, or this is your first time listening, OR you’re somewhere in the middle of those two, I promise you'll finish this podcast today with more knowledge than you started it with. 


Whether you’re listening to me on Apple podcasts, Spotify, Stitcher, the FMover website, or Youtube, please subscribe and leave me a review. 


Also, if you want a visual aid to better understand the strategies and indicators I'm using then you can follow along on my Youtube channel @FinancialMovers where I have this episode posted with a screen recording in video format of what I'm doing this entire episode. Similarly, I have all of today's notes posted on the Financial Movers website, so if you're a cliff notes type of person then the outline will serve you well. 


Today’s Agenda:

  1. Election, can we predict who wins by using the S&P 500

  2. We’re all life students of the market

  3. What I entered. 


1.Can we predict who wins by using the S&P 500?


- Fun fact, the S&P500 can predict with extreme accuracy which party wins the US election. It's all about the performance in the 3 months leading to the election. If stocks are up the incumbent party wins, and the other way around.


Citation: @besomebodyfx


2. Always keep learning from your own mistakes and from others:

  • Make your wins more valuable

  • Make your mistakes valuable. Record in journal/excel

  • Always be reading. I was reading a book the other day that a friend sent me called “Getting Started”, which is written by Trading Experts. 4pt book, no i'm not a member. 

  • Buying tops/breakout, not predicting bottoms

  • Plenty of examples, during this run. They go and keep on going (apple, fsly, paypal, amzn)

- Amazon (AMZN):

trading at $3285, ATH $3344 (less than $100 away)

- Enter now at $3285, stop at week low of $3154, thats a 3.9% risk for a potential big move up


- Colgate (CL):

trading at an ATH of $78.18, which is topping 3 year resistance (2017) at $77. Attempted to break through $77 three times in three yrs and failed. This could be it.

The way I see it is like this: 

Stop at week low $76.83

Trading now $78.18 

That’s risking 1.72% on the hopes that CL goes parabolic and makes you half a years salary


-Intercontinental Exchange (ICE):

trading at ATH $104.04, previous high at $101.93 made in Feb

  • Entry at $104.04 Stop at $99.85 to hold support over $100. Risking 4% for parabolic growth. 


- All of these stocks have been beating the market and leading the COVID rally. I doubt they drop while market rockets on. 

- I’m not saying I'm entering any of these but mark them. Do your research on this type of trade strategy and let me know what you think. Twitter, email. 

- If i do make an entry i'll let you know on my Twitter and ill have my stop posted. Be sure to follow me on Twitter


3. What I entered: 


  • Facebook (FB)

I entered and went long $FB on Tuesday at $262.78 

Price consolidating since PEG up in July

Holding above $260 as price becomes relevant

20-day coming to give support

Low sell volume over past three down sessions

Momentum in $NDX and tech


Stop at $258.85 (barely under this week’s low)

First Target $280, where it will test ATH. If it can break through there then parabolic growth.


  • Visa (V)

-Just entered $V at $201.90 with stop barely below yesterday's low at $198.50

-First target is $215

-3.8/1 risk reward

-$215 will be test of ATH, so i will be tight on my stops, but price could go parabolic and be a massive gainer.


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