044: Never be fully invested



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Financial Movers Podcast: #44

(09/07/20)


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. 


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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. Market sell-off. Why did the market dip?

  2. The importance of having capital: Sales

  3. New setups:


1. Market sell-off: Why did the market dip?

  • S&P 500: Dipped -6.6%

  • NDX: Dipped -10.2

  • DJI: -4.9%

On Wednesday the $NDX closed with:


- hanging man tick

- 85 on the RSI 

- trading 6.4% away from 20-day support


If you want answers as to why the market dropped there are three.


  • Market rotation. Money rotating out of tech. NDX is primarily made up of tech and internet based stocks. 

FROM WED-FRIDAY:

  • AAPL (-19%), MSFT (-11%), AMD (-19%), NFLX (-12%)

  • Dow had half the loss. Not tech heavy and it made up of total sectors. Financial/Industrial heavy

  • GS (+3.8%), MMM(+2.4%), KO(+4.2%), CARR (-6.8%)

  • There’s opportunities to be had in all sectors. You can get Apple on sale for over 10% from what it was trading at last Wednesday and you can get into Industrial/Financial stocks since they consolidated last week. 

  • I say this all the time. Stocks that can outperform the indexes on down days are the stocks that’ll lead the market when the indexes are doing well. 

  • INDUSTRIAL/FINANCIALS

2. The importance of having capital: Sales

  • If you were fully invested on Wednesday and you didn't have stops in, or you did but you have a cash account, ,then you wouldn't be able to take advantage of the sale. 

  • You may be down on your Apple stock by 20%, but youre a long timer who doesn't care. Well, wouldn't it be nice to have some extra cash to buy more while it's on sale? 

  • If you found yourself in this position then learn from it. I’ve learned this experience. Never be fully invested because there will always come opportunities to get a better deal than what was previously being offered.

  • Oftentimes these are flash sales. Maybe a day, three days max to take advantage. There is no time to move money from your savings. No time to refinance your home to free up capital, or sell things to get capital. HAVE IT READY AND ON HAND. 

  • You wouldn't have a gun with no ammo, right? Why have a brokerage account with no cash?

3. New setups:

  • I jumped into three trades on Friday. If you follow me on Twitter @financialmovers then you know this. If you don’t then I do believe there is still opportunity for entry.

  • Three from friday: $AAPL, $VMC, $CARR

- For this upcoming week I’m interested in two bank stocks. I talked about them in the beginning and how they were able to outperform the market during the sell of and they are $GS and $MS

-The other Financial one is $MS