Is TESLA Stock Topping Or Pausing?

Outline

  • Introduction
  • Importance of understanding earnings and their impact on stock prices
  • Example of RCL (Royal Caribbean) and its price movement after earnings

     

  • Analyzing Stock Price Movement
  • Importance of looking for separation from the earnings price
  • No trade opportunity if the stock couldn’t hold the earnings price
  • The excitement of trading when there’s no guessing involved

     

  • Examples of Stock Price Movement
  • Sketchers as an example of a professional gap trade
  • The significance of taking out the previous day’s higher low
  • Managing downside risk and seeking profitability

     

  • List of Stocks to Watch
  • Breakdown of industrials and technology stocks
  • Notable stocks to keep an eye on, including semiconductor stocks and popular companies like Meta, Google, Baidu, and DoorDash

     

  • The Importance of Knowing What You’re Looking For
  • Trading is easier when you have a clear system and know what to look for
  • Differentiating between chart reading and trading
  • The importance of having a system that helps identify profitable trade opportunities

     

  • Conclusion
  • Invitation to join the community and coaching program
  • Reminder of upcoming earnings and economic data releases
  • Request for viewers to like, subscribe, and contact support for more information

Summary

The video begins by emphasizing the importance of understanding earnings and their impact on stock prices. Pete mentions that trading becomes fun when you know what you’re looking for. They suggest taking a snapshot of the list provided in the video to refer to later.

Pete then discusses the example of RCL (Royal Caribbean) and its price movement after reporting earnings. They mentione that two days after reporting, stocks were having a hard time separating from the earnings gap. Pete highlights that this is exactly what they are looking for and encourages viewers to take note of the chart provided.

Next, Pete introduces the concept of a professional gap using the example of Skechers. They explain that a professional gap is a gap in the opposite direction of the previous day’s close and takes out the previous day’s higher low. Pete points out that Skechers closed the day prior to earnings at a certain level and after earnings, it broke out in the opposite direction, creating an obvious box pattern. They describe this as a pretty easy trade where you can quickly determine if you’re going to make money or not.

Pete emphasizes the importance of managing downside risk to achieve net profitability. They mention that once you understand how to manage the profitable side of a trade, everything changes.

The video then provides a list of stocks to watch, including breakdowns of industrials and technology stocks. Pete highlights specific stocks like 3M, ADP, and semiconductor stocks. They encourage viewers to take a screenshot of the list to build their own personal watchlist.

Pete reiterates the importance of knowing what you’re looking for in trading and having a system in place that identifies profitable trade opportunities. They differentiate between chart reading and trading, emphasizing the need to be a trader rather than just a chart reader.

In conclusion, Pete invites viewers to join their community and coaching program for further support. They mention upcoming earnings and economic data releases and ask viewers to like, subscribe, and contact support for more information.

Hey, everybody. It’s Pete. Good morning. Welcome to Stock Trading Pro. More importantly, welcome to Stocks for Breakfast, where we set up the entire week of trading, breaking it down from the big picture of the market all the way down to individual stock ideas that I’m watching and our community is going to be watching this week.

So we got a ton of stuff to talk about, but as we talked about on the thumbnail and the headline of today’s video, we’re actually going to break down Tesla. We’re going to go old school and map out no moving averages, no indicators. We’re going to break it down. the way that I actually love to trade, which is chart reading with trend lines and actually getting in there and digging into it.

We have one very specific number that we’re going to pay attention to with Tesla this week. The news of Tesla’s kind of been all over the place. Elon Musk did a fantastic job of counteracting the fact that it was the second consecutive quarter. where conversation was about lowered margins and more competition.

And of course, what he did was he came right back in and talked about AI and AI being the topic of conversation with Tesla. So we’ve got a lot to talk about. We’re going to break down sectors that have been hot, stocks that are still near optimal entries, picks that I’m looking at for this particular week, which is now the end of July heading into August.

The last trading day of July is today, but we’re going to map out the entire week. We have a lot of good stuff that we’re going to talk about today, and you’re going to want to take a lot of good notes, so stick around, be back in just one second. Okay, so thank you so much for being here with me today really appreciate it.

Obviously, everything we talk about here is for educational purposes. It’s your job to make the final decision, but it’s my job, my mission, actually, to help you make better decisions. We’re actually going to start by mapping out the S& P 500 and taking a look at what happened last week. And if you’ve never used FinViz before, it’s a really awesome software.

One of the big things that a lot of people get confused about with the size of these boxes is the size of the box is the market cap of the stock. So the larger the box, the greater their market cap. You can actually see here Apple, which actually scheduled to report this week. I’m going to take a look at that in a second.

Probably the largest box in the entire thing, but more importantly, if you remember last Monday, because obviously we do these on Mondays we actually spent a lot of time talking about what kind of market we expected last week. We had the Fed last week. We had a lot of big tech earnings last week.

We had some really big economic data last week. And let’s talk about that. The GDP numbers came out last week, and boy, they surprised everybody. And the market just kept moving higher and really. The only thing that’s going to stop the market right now is the Fed and they did what everybody expected anyway and nothing changed.

So this is the biggest thing I want to get across to everybody right now. We get a lot of people talking about profitable trades, right? Which is really a fantastic problem to have. The thing you have to be asking yourself is what do I want to see? And what don’t I want to see? So in other words, a lot of people kind of panic.

They get out as soon as that thing slows down a little bit. And this has been a good month of trading in July. I’m going to break that down in one second. You have to ask yourself, has it slowed down or has it changed? That’s a very big difference because a lot of times you’ll see a stock move up, go sideways.

And pause and you’re like, ah, is it still valid? You have to really be asking yourself, what does it need to look like for me to say that the scenario is no longer valid? So remember, one of the most common quotes that we use here on the channel, and obviously in our community, is when you know what you’re looking for, you’re never lost.

And if we tie that into before the trade, what you’re looking for, and then obviously looking for an optimal entry that has sufficient profit potential, After the trade, we have a whole new set of decisions to make because the market didn’t stop just because we got in. So now you need to understand what it looks like from a trailing stop loss perspective.

And that’s actually what we want to break down in Tesla. But the big thing I want to get across if you remember last Monday, we said that we expected last week, the week that just finished to be a back and forth week with all of the indecision. The market does not like indecision. We do have some employment numbers coming out on Friday.

Some big earnings are scheduled for this week as well. Apple, I believe, is on Thursday, which we’ll take a look at in just a second. But the bigger economic data is out of the way. The Fed’s kind of out of the way. This should be a pretty good week to trade just based on earnings catalyst, short term earnings catalyst.

One of the biggest things, let me actually just pull this up for you, so you can actually get a feel for what’s coming out this week. Mapping that out right there for you. One of the biggest things to remember this week is trading into earnings. We get a lot of conversations about, should I buy?

into earnings. And I just want to be super clear about this. The way that we trade, the way that I trade specifically is if I have a swing trade on and I have a reasonable profit heading into that earnings announcement. And for me, it’s usually a certain percentage of average true range. So in other words, if we take a look at let’s just say Apple for a second.

Because Apple’s coming out this week. Let’s say that we take a look at Apple and we break down the average true range in Apple, which you can see over here is 2. 84. So generally speaking what I like to do, again this is how I trade, hopefully you can get some ideas off of this. Since Apple’s average true range is 2.

84, let’s do that math quickly in our head, that’s 5. 68. Double the average true range is the minimum profit that I want to have on a trade if I am personally going to hold that trade into earnings. So in other words, if 2. 84 doubled is 5. 60. Let’s just keep that math simple, 5. 68. If I buy it at 1. 50, it needs to be trading at 5.

68 above that in order for me to hold through earnings. If I do not have a profit of at least double what it normally does on an average true range basis, then I won’t be looking to hang on to that trade. So then I will probably scale out, most likely scale out, hang on a little bit if I like the trade and I do have a decent profit.

I’m just trying to give you some structure. I’m not telling you what to do. This is the way I look at things. The easier trade for me personally is after the earnings announcement comes out. Let all the wiggles and jiggles and all everybody, all the algorithms fight it out. Then the next day you get that line in the sand where it opens.

That to me is the price that I’m really leaning on for the next quarter to watch that trade hang on. And if as long as it stays above that level after the earnings catalyst, that’s a kind of a, dare I say, a little bit of an easier trade. Because you had the cat, you had the news, you had the announcement, you had the interpretation of the announcement, and then what we’re looking for, do buyers step back up and hold those earnings.

Again, so I’m going to give you a very quick scan, which is a cool way to do it here. If we go into Finviz as well and if we go over to the screener and we actually want to let’s actually just break this down a little bit more where we have a raw list. Actually, you know what?

Let me do this from scratch. Probably a little bit easier. If we go over to the screener, and we’re just going to break this down by stocks that average at least 1Million shares per day. And stocks that average at least. One from an average true range perspective. Okay, but this is the one that we want to talk about over here.

Ernie, so we’re going to actually go to the previous five days. Let’s actually go to the previous week. That’s probably an easier one. So so the 148 stocks Let me just zoom this in a little bit and I want before I actually get into this I want to show you exactly what we’re doing So what we’re actually doing here live right now if you’re watching the replay is we’re setting up a earnings trade That has a little bit different criteria than reading what the revenue was.

Did it meet or beat the revenue? And then the outlook, what’s the guidance and all that kind of stuff. After the fact, I’m not saying don’t do that. Obviously you can, if you want to dig into that’s a great skill to have. We have David Treanor on the podcast with us every couple of weeks. You can definitely dive into that.

But what I’m about to show you is probably an earnings trade. That’s a little bit easier on your heart because we are essentially looking for, if there’s buying pressure or I should say in this case, a bullish catalyst, which in this case would be the earnings play, do buyers step up after all of the nonsense going back and forth of algorithms and headlines and everybody trying to get a foot, do they step back up?

That’s what we’re looking for. So we’re looking for earnings. And then after the earnings, stocks trading higher, and then we start to look for ideas. So that’s actually what we’re going to set up here. So if you take a look at what we did, we have minimum criteria, right? Average true range, this is the volatility, and average volume, 1 million average.

That means it has institutional attention on a regular basis. And now we actually have earnings over the previous week. Now we’re going to go all the way back over here, and we’re going to look at it, and are they up for the previous week? So we just took 148 stocks. And narrowed that down to 74. So essentially what we just did is we filtered out all of the stocks on Wall Street that reported earnings last week and are above from when they reported.

So cool, right? So I’m going to actually break that down. Now you would need to go into the individual stocks. To see when they reported, but essentially what we’re looking to do and let’s actually put a BBV. We’ll get back to Tesla right after this in the window here, just to give everybody an idea of how to do this for yourself.

So if we work our way over here, you can actually see the earnings gap and the earnings play. So this is the day before earnings. This is the day after earnings. So now you can actually see how easy it is to map that trade out and trade it, because essentially what we’re doing right now is we have a catalyst, we have a side of the market, so pick a side, which is the bullish side in this case, after the earnings catalyst, and now we have to measure our risk.

We have to be accepting the risk and remember, the entire reason that we choose to accept risk is because we believe that it is likely to hit our profit target in exchange for the risk that we need to take on that trade. So the way that we do it in the New York method, we have order flow, tape reading, optimal entry, and then the last part is profit maximizing those four very important and quite frankly, easy spots.

But this is a little bit of a different way of mapping that out where we’re waiting for the catalyst to come out. And that’s going to be the line in the sand. So if you could imagine, this is where it closed. This is what happened after the earnings and buyers came back. That’s really what we’re looking for.

And that’s going to take us into this guy over here. So again, Tesla is such a lightning rod. Everybody either loves the stock and loves Elon Musk, or you’re on the other side of the market and you’re like, the guy’s playing with monopoly money. It doesn’t make a difference. The guy has a lot of success.

I think, I believe, I’m pretty sure he’s either one or two in the world right now as far as wealthiest person. I guess it depends on what Tesla stock does at that point. What we want to talk about now is Tesla showing signs of topping out? Or is Tesla pausing for another move higher? Now, the two arguments for Tesla right now is number one is the low margins, which I talked about at the beginning of the call today.

I don’t care what company you have, having lower margins are not good for your company. So they have a lot more competition. They’re putting out a lower priced model car themselves. So you have competition, lower priced models, and those two things are going to lead to lower margins. The upside to Tesla right now is whether or not the fact that they have a network effect right now, where the same thing with cellular service.

You need other people to be using it. And he expands the significance of it with the more people that are using it. So now the upside with Tesla is their charging stations and how many other companies are looking to lease or use their charging stations. Plus Elon Musk, genius that he is, came out with a conversation, like we said, about AI and NVIDIA.

Inside of what they’re doing with Tesla. That’s the big picture So remember what we said last week coming into the week that there was a lot of indecision heading into the week So right now there’s multiple sides of the story to Tesla and the stock price is reflecting that so what we’re seeing now And again, if you haven’t done this before we’re going to walk through this Actually, you know what?

Let me just remove these guys. I want to show you how to do this So anytime that you are looking to draw trend lines that you could do with moving averages And most people will use the 20 and the 50 and you get a feeling for that, right? The problem with using moving averages is it’s very easy to be lazy with moving averages.

And just say it’s above the moving average or it’s below the moving average and not really put price action into the equation. And we do use moving averages. We teach moving averages, but the very first thing I do is I teach how to actually work the chart because when you work the chart, you’re actually getting into the highs, the lows, the trading ranges and that kind of stuff.

And you don’t really necessarily see that when you’re using the moving averages. Matter of fact, you’re probably not even looking for it because you’re looking at above or below. You’re looking for crossovers, right? So when we start to draw trend lines, we are basically looking to never go through. the previous price, right?

We’re looking to draw a line. Now, obviously, this is where the stock took off, right? Earnings came out, bottomed out. That’s not really the trend. The trend is where the stock started to accelerate. And this, remember what I said just a minute ago, this is a very important thing. There are always going to be new decisions in the market.

You have all that information going up to the trade that you made, and you feel like you built a good argument for choosing to accept risk. And then you have a whole bunch more information as new price action, new information unfolds, and that’s actually what we’re doing here. So we had the original trend line in Tesla, and then the stock took off.

So now we have to adjust our trend lines. To the volatility, the new volatility of the stock, and that’s going to give us the feedback to make a determination of whether or not the stock is pausing right now, whether it’s exactly the right price. Or what level would tell us that Tesla has topped out and maybe we should scale back if not being aggressive short seller again, mapping out if then that’s all a trading, right?

So we kind of worked this out where the acceleration now caused us to need a new trend line. So one thing you never want to do. is go through prices. So what I’m saying is you don’t want to go like that. We’re going through any of those prices. You want to go to the highest low without crossing through anything.

And as long as that’s still valid, that trend is still valid. So you can actually see here, we started here where we took off again, and we did not go through any price action. And you could see that trend held the entire time. Now, the only other thing you could have possibly done is here. Where instead of starting down here, you would actually draw it like that.

And what’s cool about this is as we drew this one, you can actually see where it broke. Now here’s the thing. Anytime we are looking at price action, we need to know, is it still obvious? Is that bias still valid? Or is there a P. C. O. T. Which we call a potential change of trend. Now, if that trend line breaks, you have to let that trend continue.

And then when it stops, you do not have two very valuable reference points. You have where it broke the trend. And where it just came from, that’s the price action that you need to monitor. And that’s why it’s fun to draw these trend lines, because you’re working the charts, you’re getting to know the real levels, and you’re not just relying on moving averages, because now you’re involved in the chart, and you know the chart much better.

So what’s fun about this is actually where we broke. So as we broke this trend line, we stopped over here. And what we would do then is we just map out that level. And then we map out where it came from. So if we could zoom out right over there, that’s the new level in Tesla.

So only one of two things can happen. It will break down and take out this level, which will invalidate this move, and that would be where you would exit your trailing stop loss, or if you’re really aggressive, which I don’t recommend in a super strong bull market short selling, more likely it’d be moving up a trailing stop loss up to that level.

So remember, only one of two things. It breaks down, and this is done, or it takes off again, and this is still valid. So we’re working our way in. Now, the second thing to think about is making a new trade while it’s stuck in here. You need to understand that if that’s the right price, if we broke down and now we have what we call the box, that’s the right price.

So if you happen to be trading while it’s stuck in that box, you really don’t want to have, at least the way I do it, you don’t want to have a bigger share size because that’s the right price. We only want to take advantage of when there’s an edge, and an edge means that if we’re choosing that risk, There’s a likely profit target that’s going to get hit and we can’t assume a new likely profit target until we make new levels And get out of that box.

It’s really simple. You might want to watch this video one more time So we dance around in this box, right? We work our way out and more good news comes out and we finally get out of the box now This is the part that we said remember we said we got to adjust right? New information came in, so we’re going to get rid of this guy.

This guy right now either was going to break that or that, and it broke that one. So this trend line now is no longer valid, and we have to draw a new one. So we start at the low again, and we start working that chart, and that’s the price action. So as long as that is in place, let me move this out of the way.

I’m going to actually take this guy off of here. and take this guy off of here. As long as this is still in place, we’re cool. But now we actually break it again. We let it stop right there, and now we have to draw two new lines. So we have Tesla there and we have Tesla there. So what’s the beauty of this is we’re not guessing anymore.

Institutions have attention on stocks and they start to pay higher prices. When that stops. You get these boxes. You get the break of the trend. We have to pay attention. Remember, the most expensive thing in the market is if you don’t pay attention. But when you know what to look for, and you’re paying attention to that specifically, you eliminate all of the overwhelm that a lot of people have in the market, which is very prevalent to a lot of people that come into our community.

I’m overwhelmed. It’s exhausting. I’m looking at too much. I can’t figure out how to narrow it down, right? What we just did is we narrowed it down to something specific. How to identify the trend, how to identify and draw that trend, how to mark it off if that trend breaks, what to do after that trend breaks while it’s in the box, and now you only have two scenarios, it either validates and still in play, or pulls back and we move up a trailing stop loss for that existing trend.

So the way that Tesla is trading right now, we are still stuck in this box. We have this big digging a little bit deeper. Now we also have this bearish gap here, obviously, which came out after earnings. So as of right now, the market is still digesting the bearish conversation around margins in Tesla.

So if I’m looking to establish a new position in Tesla right now, we know that we have where it just broke the trend line. So we know that’s the line in the sand where the bears might be taking a little bit of control or just bigger profit taking. And then we also have the line up here. Now one other box that we have is this little box right here.

So we’re in a 1, day trading range and Friday was what we call an inside candle. So we have multiple things going on in Tesla right now. We have a bearish gap from earnings. We have the uptrend broken. We have a wide box here. But, maybe you think longer term, Tesla’s still bullish.

So there’s two plays right now, the way I’m mapping this out. If it takes out this level, which is basically 253, 254, I’d be moving up internally. Look to that level and probably get out if it rallies back up because we’re stuck in that box. It’s a two step trade for me right now, but we’re working this way a little bit more.

So there’s two negatives here. We broke the uptrend earnings came out. We’re not perceived as positive in a bearish gap. And now, six days later, seven days later, we haven’t filled that gap. It’s an old trading thing that If you don’t fill it within three days, you’re probably going to continue in that direction of the gap.

If I’m looking to be long Tesla right now, I’d be looking to trade my first piece out of this box, and I would not have my second piece until we establish new higher highs. So I just want to be clear about that. Bearish gap down, earnings have not recovered yet, and now we have a seven day box, six day box, right above the break of the trend line.

So what I’d be looking to do first in Tesla is if it breaks down below that 253 253, 254 level, that’s where my trailing stop would be based on that recent trend that started in May. If we start to rally and get out of this six day box, because we’re stuck in that bigger box, and again, I just want to point out those two boxes, here’s the bigger box and here’s the recent trading range.

If we break to the upside and do not break down and take out that change of trend, because we’re in that bigger box, the smaller breakout is piece number one for a new buying opportunity, but I’m not putting on full share size or adding to the position until we get out of the top part. Now, what we just talked about and what we just broke down, I want to just say this a little bit differently.

Most traders make the mistake. And this costs them a small fortune, not understanding that each trade has a different likelihood of probability. So basically what that means is every trade is different. And when you develop the skill and have the system, what we’re showing you right now, to say, this is what I’m looking for, and unless I see it, I’m not going to trade.

This is what I’m looking for. And when I do see it, then I need to make a distinction on how much I love this idea. So you can actually have trades where, let’s just keep it simple, where 3, you love it, 2, you like it, and 1, you’re like, eh, maybe I’ll put a small piece on because maybe it broke out, which actually is what we saw in some of the energy stocks a couple of weeks ago, right?

We actually had these trades where they were breaking down, going sideways, and we said if they finally get out of here, this would be an initial reversal. An initial reversal would be the initial position size. So what we basically just broke down is I’m trying to help you, maybe realize helping. Maybe if you don’t have one or maybe if you fine tune what you’re looking for.

And obviously I’d love you to come and work with us in our community, but really think through that’s what I’m looking for. And when I see that only then will I choose to accept risk. If I don’t see it, I’m perfectly okay with being in cash. I’m not going to have fear of missing out because the only reason you want to put your money in harm’s way is because the risk that you’re choosing to accept has a likely reward potential based on what you just put together in the way that we just talked about.

So there’s other ideas that maybe have a little bit better reward potential right now. So we could take a look at something like Wayfair. Which you can see this level here. It was support big breakout. And now you can see we’re actually up through that level. So these are a little bit different.

Look at the room to go that the stock has compared to what we just looked at before. So I want to just give you that structure again. Order flow is there a dominant bias to the stock hedge funds? The deep pockets of the market have research analysts. Those research analysts say this cash flow looks good in the future.

Their guidance was good. Order flow starts to go into the market and you see a slow accumulation of those stocks. Tape reading is whether or not that order flow is still valid. That’s where we have pauses and pullbacks and all those kinds of things. Then the last two parts of the trade is what we actually just discussed, finding the optimal entry where the reward potential of that order flow and that set up is good.

So in other words, if I risk 5 on an overnight swing trade. Is it likely that I’m going to make 15? That’s a big part of the equation, right? Then the last part is, Oh my gosh, we had a profitable trade. Now what? A lot of people panic as soon as that thing slows down. You need that last part, which is what we call a profit maximizer.

Profit maximizer is a fancy way of saying a trailing stop loss. But the thing that’s interesting is, you need to pay attention to when your stock slows down and how you react. Do you get all nervous? Then you’re a momentum trader and you need to build a trailing stop loss system around the fact that when that thing slows down, you don’t want to give everything back.

You have a system for getting out. If that thing slows down, let’s use LJ as an example. LJ, good morning. And that thing slows down, he’s got a good trade on, it pushes and it pauses, and LJ’s I can’t wait to add to this thing. As long as volume’s light, I’m looking for the next big move, right?

A lot of people in our community just had that experience in UPST. This was probably one of the bigger trades. that we’ve had on this pause over here, right over here in this and pretty good move, right? Can actually see over 65%. So on the push and the pause, you’re looking to actually add to those positions.

So what we basically just went over was order flow, tape reading, optimal entry, but probably one of the most important parts is how to manage profitable trades. We get a lot of people that commit to the community and they say, I’m doing okay. I got news for you. July was freaking amazing. Let’s talk about that for just one second.

July was just absolutely amazing. We look at the month, look at the last 21 days of trading. So here’s the thing I want to get across to you, and let’s actually start to get into the metrics a little bit, right? So if we break down the metrics, and we start to take a look at how the market traded from a market internal perspective, look at the high low difference over the last three or four weeks.

Look at the 20 day breakouts compared to 20 day breakdowns over the last four weeks. So here’s the big thing that I want to get across to you. Maybe you did good during July, right? But do you have systems in place? Do you have a repeatable process in place that when the market is awesome, that you’re putting yourself in position to make more?

Maybe you made 3000 this month. Maybe you made 5, 000 this month. How do you know you shouldn’t have made 10? That’s the thing to think about. So you have to do a raw assessment of how you traded during the month of July and ask yourself, with the amount of good opportunities on the table, do you have a system in place for managing winning trades?

And did you make enough? Now, that might be hard to do sometimes. We all have those brokerage statements that, they don’t want to get in there and open my statement, right? And you don’t have a good month. On good months, especially, you need to get in there and say what was available and how did I do?

Did I take advantage of it? And is it repeatable? Or, did I panic and get out of a trade as soon as it slowed down, only to watch that trade take off without me? It’s not a bad thing. It’s feedback. You just need to spend that extra five minutes on a weekend, pour a pot of coffee, get a notepad out and say, how do I manage my winners?

But before that, you need to put yourself in position to find winners. So what I’m going to do now is I’m going to walk you through the list. You might have to pause this one or two times to get the entire list. But I want to show you how I’m breaking down the market this week and what I’m looking for, especially heading into Monday, which is our daily ticker.

We do this every week for everybody. So we also, we went through already the earnings that are coming out this week and you can see how we break it down. We talk about the market, options, sector rotation, industry groups, and then alerts, right? So I want to work our way through the big thing with the option side of the market.

Still bullish. Just a question of what kind of option strategy you’re going to put on. You can see John’s actually looking here at M. U. R. And by the way, I want to give you an idea that is at the top of my list heading into week three M. If you watched our video last week, you actually remember we were talking about this pause over here.

All those headlines about lawsuits and all that kind of stuff seems to be out of its way. Yeah. And now we’re actually pausing now after this big move up, one of the top stocks on my radar heading into this week. Okay, but I want to get over here to sector rotation. This is where we start to break down how many good ideas are on the table and where are they?

So if I could just finish this kind of conversation up with you, one of the hardest parts that people have is narrowing down the list of ideas where there’s just so many ideas. How do I understand which ones I should be watching? You have to choose some stocks based on your risk tolerance, the size of your account, how many stocks and decisions can you make at one time?

This is where we believe watching sector rotation and sector rotation is us tracking and piggybacking money in and out of order flow. In and out of sectors. So when institutions are working their way into a sector, we’re joining them and we’re tracking them at some of the stats I just showed you and while they’re still valid, while order flow is still valid, while the tape is still valid and while there’s still good optimal entries, we’re joining them.

As they start to work their way out and the likely profit potential diminishes, then we see them rotating into a different sector. And that’s what I’m going to show you right now. And again, if you’ve been watching us, hopefully you are every Monday, give us a thumbs up and make sure you subscribe.

You know that we worked our way out of technology. We started to work our way into energy. We started to work our way into industrials and we started to work away into basic materials. There’s no job easier than simply paying attention to what the smart money is doing with order flow, sector rotation, industry groups, optimal entry, profit maximizer.

It’s really very Simple. Quite honestly, what’s overwhelming is you’re trying to look at everything. So I want to walk you through it. You might have to take a screenshot of some of the ideas that we’re watching. So right now, technology, Intel exploded last week. You got to wait for Intel to slow down a little bit.

So big move last week, right at a breakout level, right? So we just want to keep going through here. So we’re getting an idea of some of the, of some of the stocks that have order flow, and then we make a determination if they’re still valid. Other stocks, again, I’m breaking down the sector and the group off of the news catalyst.

So go back to what we said before about trading the news catalyst. Open swing trade in IBM from last week, still valid. You can actually see here coming out of this. What a lot of people know is an ascending wedge. You could see IBM is actually still grinding higher there. We’re actually okay looking for energy.

So remember what I said before? What do I want to see? What don’t I want to see? So now I’m waiting for it. I’m already saying what I want, so I’ll know if it’s there and I’ll know if it’s not. So I just want to really think about this for a second. When you look at the market, do you go in every day and say, I know what I’m looking for, or do you go into the market and say, let’s see what happens?

My gosh, they’re totally good, different ways. And your heart is so much more relaxed when you say, I know what I’m looking for, and it’s either there or if it’s not one of my original trading mentors. Probably the best quote that I’ve ever heard in my life, which is if it’s hard to find it’s not there So don’t trade but that assumes, you know what you’re looking for in the first place Okay, so let’s actually continue with the list.

All right Okay, so we just talked about tech stocks. We talked about ibm now. We’re watching some more money that has rotated into consumer cyclical. We just gave a big breakdown on Tesla. So if you missed that, you can keep an eye on that or rewind that, right? Other stocks that obviously, if you remember from three weeks ago, we called out all of the electric vehicle stocks.

Go back, we can post the video for that after this a little bit later. But we were focusing on Riven. And ironically, Riven is not really exploding to the upside. It was really XPEV. We were looking for Riven to take off after this big move. But it turns out that it was XPEV. So we’re working our way into the electric vehicle stocks and you could actually see, and again, what did I say before?

How exciting is this? Nothing more than what should happen. It’s the right price. We exploded, it’s the right price, and you just have patience to wait for the next move. That’s cool, isn’t it? No indicators, no complicated thing. What is happening? What should happen next? Alright? Alright. So we covered the electric vehicle stocks, right?

A few stocks near optimal entry. Now this is a different part of consumer cyclical. Consumer cyclical near an optimal entry. The other one’s a little too far from the optimal entry. Now we’re looking for new ideas. We have an open swing in DKNG right now as well. Okay? RCL. Remember what I said before. Now this is very important.

Remember what I said before about earnings coming out and whether or not it can hold that earnings price, right? That’s what we’re looking for. RCL, Royal Caribbean, came out, big gap up, traded up, traded down, and now it’s right at that level. I’m going to show you this. I want you to have a visualization of this.

This is fun. So if we take a look at RCL last week, you should have a very clear roadmap of what’s going on. Here’s the earnings gap. Let me zoom that out a little bit more. Boom, right? There’s the earnings gap. That’s the price. The next day, it rallied above and came back. So now you’re just looking, do we have separation from that price?

So because it rallied up and pulled back and couldn’t hold that price, there’s no trade in here right now. Maybe it took a small loss. Maybe you’re still holding it a little bit below that level. But the most exciting part is the price. There’s no guessing. Let earnings come out. There’s no guessing.

That’s the price. Do buyers step up again in this stock? So far, the answer is no. So far, but it’s going to be on the radar this week. Fun, right? Exactly what you’re looking for. That’s where trading becomes really fun. Alright, so let’s keep working our way through. You can actually see, again, you can take a snapshot of this and go through this whole list.

Two days after reporting, stocks were having a hard time separating from the earnings gap. So you see that we’re actually mapping out for our community, this is exactly what we’re looking for. You can actually see it right there, right? Sketches we talked about, we just gave you that chart right there. Actually, you know what, I want to talk about that one.

The reason I’m mentioning Skechers actually right here, look where it closed the day prior to earnings and look what it did after earnings and look at how obvious that box is you can’t unsee it now, right? You can see the box unbelievably. A professional gap is a gap in the opposite direction of the previous day’s close.

And it takes out the previous day’s higher low. So in this case here, you could see the low the next day, even though it was earnings, the next day took out the high, which is the complete opposite of the stock closing on the low, and we’re outside of this level. So it’s fun about this. This is actually a pretty easy trade.

And one of the trades that I talk about all the time, which is, you’ll know very quickly if you’re going to make money or not, and we want to keep our money working. In this particular case, it’s either going to hold the breakout or if it doesn’t. If it does, fantastic. We’ll work the trade. If the breakout fails and pulls back below 54, it closes below that level, and more specifically, closes below this low, I hit the road and just go look for another trade.

Remember, managing the downside will get you instantly closer to net profitability. The only other thing you need to learn after that is how to hang on to your winners, okay? So I’m going to go through the rest of this list so you can actually take a screenshot. You can see we start to break down the industrials.

Just talked about 3M for you as well. ADP, really good, clean two day pause. And again, you can’t unsee that anymore, right? You can actually see I’m doing what I’m showing you to do. I’m actually trading and actually managing the ideas the same way. Trend line, breaking the trend line, and starting a new move, right?

ADP. Breaking this down a little bit more from technology. We had semiconductor stocks, and we just gave you a big list of semiconductor stocks. MCHP is one that’s on my radar, and you can actually see the trend.

Bullish gaps. We have Meta, Google, Baidu, and DoorDash. Another big list to keep an eye on. So if you want, you can actually take a screenshot of that. Just pause the video and get all those stocks in that list. And would actually be a pretty good heads up for the week so you can get an idea of building your own personal watch list.

The single biggest thing that I want to get across here today number one is obviously I’m very grateful that you’re here watching this with me, whether it’s live or on YouTube. David Zemke. Good morning. Good morning. How are you today? Thank you so much. I want to get this across. Trading is infinitely easier when you know what you’re looking for.

We get so many people that come into our community. I just want to say hello to Simon. Simon was a member of our boot camp. Good morning, Simon. Thank you so much. He can attest to the fact that one of the things that we are really good at in our community and the system that we use, which is the New York Method, is really bringing all of the noise in the market and just getting it to a point where we say, that’s what I’m looking for.

And if it’s there, then I’m going to make a decision on my entry. But if it’s not there, you don’t even look for an entry. A lot of people are like, oh, I hit a scanner, let’s buy it. That’s not trading, that’s chart reading. You don’t want to be a chart reader, you want to be a trader. So if I can hopefully inspire you just a little bit right now today is just ask yourself, do you know exactly what you’re looking for?

And do you have a system in place that tells you right now is a pretty good time to accept risk because the profit potential is likely. And if that answer comes back and you got a profitable trade like we just showed you, then the last part that you need to work on is obviously how to manage your stop loss, your trailing stop loss when it moves in your favor.

Once you understand how to manage the profitable side of the trade, oh my gosh, everything changes completely. We got a question before about joining our community. There’s actually a email to customer support below in the description. If you’d like to learn more about joining our community we’d love to have you in the coaching program.

Thank you so much, everybody. Have a great week. We got some big earnings coming out this week. I think the biggest economic data is on Friday with the employment numbers. So if we did a good job today, please do me a favor, give us a thumbs up. Make sure you hit that subscribe. And look, if you want to learn more about working with us, absolutely.

Scroll down to that description and email our support team. We’d love to hear from you. Have an awesome day, everybody. I’ll speak to you soon. Thank you so much.

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