Happy Friday, Evolvers!
I’m glad you’re here, because we’re wrapping up a seriously wild week in the stock market…
Big tech earnings from Amazon.com Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL) propelled the major indexes higher yesterday.
The beats weren’t huge, but the response from traders was, which reminded me of an old saying in the stock market…
It’s not about the news … it’s about the reaction to the news. And so far, this reaction has been extremely bullish.
If the markets can follow through with another green candle next week, we could be seeing the light at the end of the bear market.
On the other hand, this month’s green price action could be setting up a classic ‘bull trap,’ only to take the June 17 lows out at a future date.
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Adding to this, we’re nearing some key resistance levels — $308 on the Nasdaq and $420 on the S&P 500.
This is why I always tell fellow traders to be prepared for anything. (It’s also why I developed my Shadow Trades strategy, which works beautifully in any market conditions.)
Anyway, it’s time to do some Q&A since it’s Friday. Here we go…
What are your thoughts on the bullish reversal happening in crypto right now? You’re good at playing the downside on crypto stocks … would you consider playing calls to the upside?
Yes, I’m watching the crypto breakout closely and I’m only thinking about buying calls right now.
As the old stock market saying goes … ‘the trend is your friend.’ Currently, the trend in crypto is headed upward.
With that in mind, I’m keeping a particularly close eye on Riot Blockchain Inc. (NASDAQ: RIOT) and Marathon Digital Holdings Inc. (NASDAQ: MARA), two crypto stocks I’ve traded with success in the past.
RIOT has been lagging behind MARA slightly in terms of gains off the bottom, but I think either has the potential for continuation if crypto stays bullish next week.
One final thought…
I feel like some students think I’m a huge bear who only likes to buy puts, but this isn’t accurate.
Yes, my bread and butter setups tend to be put trades. But ultimately, I’m only looking for three things in a potential trade — volatility, volume, and a catalyst.
This is based on my buddy Tim Bohen’s 3-Item Checklist. If you simply focus on stocks that check these boxes, you’ll already be ahead of the 90% of traders who lose money.
Do you know this mystery man?
He’s just discovered one of the most powerful ways to take on this bear market as a trader…
All from exploiting one tiny niche of the stock market (only 4% of stocks) that can bring in 2x, 5x, even 10x BETTER returns than penny stocks.
And he just went live on camera to talk with the public for the first time.
Well, what do you know? Crypto checks all three of these boxes in bold ink. It’s a crazy sector that has led me to some incredible trading opportunities.
Let’s hope next week brings more of those five-star setups from the crypto sector.
Now that AMZN and AAPL have reported strong earnings, what’s your game plan for next week?
I’m happy to see a bullish reaction to these big tech earnings reports, but it doesn’t really change anything about my game plan.
All year, the script’s been the same … it’s been nonstop unpredictable price action. And most of it has been bearish. So, be ready for anything next week.
Quite frankly, AMZN and AAPL’s earnings aren’t important to my strategy. They’re vital components of the major indexes — which is why I talked about them in my most recent video lesson — but they won’t really affect my trading.
The earnings of two tech companies aren’t gonna change the strategy that I’ve developed over 12 years as a professional trader.
I prefer to focus on singular momentum stocks, ideally catching the first red day with put options.
And ultimately, my point is this…
I want every one of you to discover the trading strategy that works for for YOU.
It may be completely different than mine and there’s nothing wrong with that. Every trader is unique.
Your trading strategy should develop organically to fit your specific personality, account size, and risk tolerance.
As always, thanks for all your questions. You can always send more to me on Twitter @thehonestcroock!
Study hard this weekend! Make sure you’re ready for anything come Monday.
Because in this unpredictable market, there are no guarantees. You’ve gotta let your intuition guide you into the setups you should be trading.