The Shakedown

Headlines?!

From my note Tuesday below -- we got that short term bounce this week, nailed it, but saw weakness Friday right at the first major resistance area. This suggests either more selling or more consolidation is needed. 

We got a late pop on Friday when Trump got on TV to announce they were closer to a deal with China - even though his economic adviser was on the same show about an hour earlier saying they weren't close to accomplishing anything. I took that news as cash is still my best position and took a lot more profit in my winners for the weekend than I usually would have. Got to protect in times like these. 

We always say to watch the leaders for clues on the market direction and the fact the FAANG names have all been extremely weak following their earnings report, with AAPL joining the crew Friday, could be quite troubling for the market. We will see how money rotates but if AAPL continues selling off, it will likely drag the Nasdaq lower with it. I have been taking quicker trades, this market has been favorable for the active trader more so than the long term holder. That's always the case when we encounter some volatility.

I will continue taking trades with smaller size in the best earnings names, as it has continued to work even in this market weakness. I did clear up to about 85% cash going into the weekend.

There are times to kill it and there are times to not kill your account, this one being the latter. 

Zach made a great call mid day in Alpha for this ENSG -- and when I saw the setup it took about 3 seconds to decide I wanted to put on risk in this situation because it is such a familiar trade to me. Link to the recap below

Click above for detailed look at companies reporting this week 

Click above for link to my updated earnings watchlist

"Have you seen the earnings watchlist??"

OFIX Long

There is no doubt in my mind this is the best technical setup in the market right now. I had major hesitation making this stock the trade of the week because of how thinly it trades. The fact of the matter is this is everything we look for in an earnings setup: major gap up showing strength and tight consolidation afterwards. What makes this A+ is the 3 tight consolidation days underneath the major macro level at $62. You're always risking a bit more in these thin names due to the likelihood of slippage on  a stop out if we're wrong, so no need to go max risk on this one, especially with the current market environment. 

Trigger: $62

Stop: $60.50

Target: $68-70+

Hope to see you in the chat Monday!