There's ONE Stock On Watch for Monday

What's up everyone? All right, in
today's episode, I'm going to break down
my day trading watch list for Monday
morning and the game plan for the week
ahead. We had a few stocks that squeezed
up in the after hours session on Friday.
And so, those will be the first stocks
we look at for a potential continuation
into Monday morning. That has been
working fairly well. A stock squeezes
after hours, it continues the next
morning. However, it's been a little hit
or miss whether that stock continues and
maintains its status as the number one
leading gainer, most obvious stock for
the whole day. It often does continue a
bit further, but then sometimes there's
a second stock or a third stock that
pops up and sort of displaces that after
hours gainer as being the most obvious.
Maybe the after hours gainer was a
little higher priced to begin with and
so when this new stock pops up traders
are more inclined to jump over to it. So
we are seeing a little bit of this
musical chairs where we'll have one
stock that everyone's focusing on and
then you know everyone forgets about
that and switches to the next one and
then everyone forgets about that and
switches to the next one. So, it
requires you to be kind of nimble. And
one of the challenges here that I'm
having in this current market is that
it's not totally clear to me which stock
is going to end up making the 3, four,
500, maybe 700 or,000% move and which
one's going to pop up and then slam back
down. And so, there were a number of
stocks I traded last week and I was
frustrated myself because, you know, I
felt like I sold it too soon and the
stock did end up going up a,000%. And
then there were a couple others where I
sized up thinking, okay, this is going
to be the one. And it just does a huge
rejection. This is sort of this the
current state of the market. And the
reason is because in this current hot
cycle that we're in, traders are very
aggressive and jumping on anything
that's moving. But there's not a clear
theme that ties together all of these
stocks that have made big moves. A lot
of them have been Chinese with no news
whatsoever, but not every Chinese stock
with no news is making a thousand% move.
So, it's been a little bit difficult or
very difficult to figure out which one
is going to be really obvious. And so,
the the sort of best approach right now
is kind of testing the water, building a
little bit of a cushion, and then if the
thing keeps holding up, it's like, all
right, it's holding up at 100%. That's
good. All right, I'm going to keep
trading it. Then it's holding up at
200%. All right. And then it just sort
of keeps going higher and you just keep
trading it. But it doesn't seem
realistic to get in and then not taking
anything off the table hoping it's going
to go up a,000%. Because although that's
been happening, more of them are popping
up a little bit and then rolling over.
All right, so let's go ahead and jump on
the screen share. Now, if you tuned in
to my recap from Friday, you know that
Friday was my biggest red day of the
year. This is where I finished last week
including uh both my small account
challenge at um Thinker Swim and my uh
Roth IRA. The small account challenge
um you know I I don't usually include it
here. Uh this will be the first week I
have but I imported all the trades for
the day 30 uh recap. So we'll just pull
this back and just look at my uh Roth
IRA for right now. Okay, so the Roth IRA
I finished the week last week up about
$25,000 give or take. So let's see. So
this is August. Um so yeah, 28,000.
That's even a little bit better than I
uh realized there. But nonetheless, um
so 19,000 on Monday, nothing on Tuesday,
no trade day. And then Wednesday and
Thursday were good. And then Friday was
just horrendous and gave back way too
much. Um, you know, this was just
started red, went to green, and then
just got smoked on that trade on DSY,
and then it just got worse from there.
So, right now, I am in a draw down, a
$73,000
draw down. It happened very quickly. Um,
and so that's where I'm at right now.
This is going to require some thought
because what I don't want to have happen
is have another $73,000 red day or gosh,
an even bigger red day. Uh, so typically
what I do after a big red day like
Friday, and this applies for any of you
guys who are red right now on the month
of August, whether it was a big red day
or small red day, doesn't matter. If
you're red, this is the way I approach
it. The um the the worst thing that can
happen is that you end up having
consecutive red days in a row where you
just keep losing more and more and more.
You don't want to do that. Now, if the
market ends up, you know, cooling off,
Friday wasn't exactly cold. I just kind
of was mistiming and mismanaging my
trades. Uh we did end up having stocks
that made big moves and I just didn't
trade them well. But if the market does
cool off, then what should I do? I
should absolutely reduce my share size
and I can reduce the number of trades
I'm taking by focusing on the highest
quality setups. By doing that, my
accuracy will improve. I'll avoid some
of those outlier losses. And although
I'll be trading with smaller share size,
I should be able to lock up a couple of
small green days. And then once I've
recup re recovered or recouped about
half of the loss, the draw down, that's
when I kind of start to take the
training wheels back off and go back to
full-size positions. So the logical
thing for Monday morning is for me to
start with smaller positions to build a
cushion, kind of get a feel for things,
break the ice, and if with smaller size
I end up going red on Monday, then it's
like, okay, whoa. All right. So, the
market's not better or I'm not better,
you know, in sort of being centered and
calm, cool, collected. And so, let's
just stop right there and only lose at
the rate of one quarter of full position
size rather than full position size. So,
tomorrow morning is all about breaking
the ice for me. Now, that's generally a
good rule of thumb, even if you're in
the middle of a hot streak. But, I will
say that when the market's really hot, I
do tend to start right out of the gate
swinging hard because my accuracy has
been higher and I've been seeing, you
know, bigger winners. So that's what I
need to refrain from tomorrow is just
don't swing hard on the first trade.
Instead, kind of build a cushion and get
a little bit comfortable and then start
to size up. Uh so that's really the the
best approach because if I continue to
trade with full size right out of the
gates, um the upside potential is that I
could end up, you know, potentially
making back half the loss in just one
day or or maybe even, you know, making
back more than half of in one day. Now,
my biggest green day in the last like
month was about 73,000. 60 72,000 here
and 62,000. So, to lose 73 in one day,
it's very unlikely I'd be able to make
that all back in one day. It's not
impossible, but it's not it's not likely
and I shouldn't be aiming for that.
Instead, I should probably aim that
it'll take probably 3 days, 4 days to
make back the loss. And so, if I can
finish this week up 75 to $100,000, that
would put me in great shape. uh I'd have
recouped the loss and I'd be back to,
you know, pretty solid position for the
month of August. So that means just 20
that $20,000 days, you know, $25,000
days roughly, um and maintaining good
accuracy and sort of sticking with that.
So, uh yes, the upside if I trade a big
size would be that I could make back the
loss quickly. The downside though isn't
just that I would lose more money, it's
that I would lose more confidence. And
when you start losing more confidence,
that's when things start to get really
bad. So, my confidence on Friday was
obviously shaken a bit. Um, but I think
if I can self-correct quickly here by
not letting that spiral into multiple
red days that I'll be back on track
pretty quickly. All right, so that gives
you a summary of kind of my approach
going into Monday morning. Now, on
Friday, we did have YJ uh which ended up
making a big move from $2 to $14 a share
and then it came all the way back down
to 274. So, in terms of percentage
return, this did go up over a,000% on
Friday. What's the catalyst? There was
none. It was a Chinese stock with no
news. [sighs]
All right. And it trade on how many
shares of volume? 51 million shares of
volume. Now, in hindsight, you know, if
I had stuck around on Friday, could I
have bought, you know, $100,000 worth at
two and, you know, sold it on the way up
to whatever?
Technically, yes. Would that have been a
good idea? No, it would have been very
risky. And you can see how this started
on lighter volume. Yes, the volume
increased. Um, but lighter volume with
backto-back halts definitely makes it
harder to manage risk. And you can get
caught in a halt going the wrong way and
suddenly you're in too high and you're
down 40 50% on a position. So, I didn't
take any trades on that. Uh, but this is
another example of a Chinese stock with
no news making a big move. This one was
during regular hours. MB, this was a
Hong Kong company. He made a big move
during pre-market hours from $4 to 20
bucks
[sighs] again, you know, impressive, but
ends up double topping and then coming
back down towards six. Uh, VAT, this was
a US company. This one surprised me a
bit that it made as big of a move as it
did, especially because it was easy to
borrow. Uh, NAMI, this was big on
Friday, had put in this squeeze from
after hours Thursday and continued into
Friday morning. It was the stock I did
the best on, but then I gave back the
profit um jumping in heavily at 10 and
then getting caught in this flush. But I
had a nice trade from this area to this
area. I just gave it all back because I
became a bit emotionally compromised by
my loss on the other stock. So, uh then
if we look at WY uh HG, was this it?
Yeah, WHG from the other day. Uh this
one as well put in a big move from $4 up
to 12, pulls back, then goes from eight
all the way up here to a high of $24 a
share and then comes back down to four.
So we're seeing a lot of volatility in
this volatility certainly are
opportunities.
But when you trade stocks with big
ranges and you get on the wrong side of
it, it can be an emotional experience.
So going into Monday, I'm not really
expecting any of these stocks here to be
good contenders for continuation. YJ,
could it bounce? I guess, but this would
be the backside of this move here. So,
all of this move would be in the shadow
of this high over here at 14. And I'm
not interested in trading that backside.
I really don't prefer that setup. Y uh
sorry, ZJ L. This is a Chinese stock
that has squeezed shorts before very
hard. Um, it had a day where it halted
up about, I don't remember, $20 a share
and it resumed at $200 a share and ended
up giving this just unbelievable move
right here. As you can see, that ended
up going all the way up to $500. So, I
don't want to underestimate this one. I
know that it can be very volatile.
However, at this point, the float is 20
million shares. It's higher. The company
has sold shares on the open market to
raise money, which is why the float went
up. So, I wouldn't typically have high
expectations uh for a 20 million share
float going into Monday morning. This
might continue at 4:00 a.m. a break of
five and a squeeze up towards 6, maybe
7. The size of this move is about that
big. So, then kind of the next leg up is
sort of similar. So, maybe 650ish. Um
sometimes they, you know, are not
matching in size. They'll decrease and
or or they'll increase and be bigger. Uh
but nonetheless, I'm not super super
interested in this one, but it is worth
keeping an eye on. So ZJ Y L going into
Monday for continuation. XHLD, this one
was up 46% in after hours trading, but a
little bit deceiving because it closed
weak and then bounced up. So the close
is here and so that gives it a gap, but
you can see it's because it flushed
before the close. This one on the daily
chart does have some room, but I just
don't know if it's going to work. This
is that similar kind of um issue where
you have this big move and then it's
sold off. So now all of this action is
in the shadow of that big move. Make
sure you're zooming out on your charts.
So when you're looking at these, you can
see is there something I'm missing like
back there. Seeing it on the daily chart
is also um helpful. HDI, we've had some
big moves on this one. Um if we scroll
back here, uh even this year we had this
day where it went from a dollar up to
like $6 a share. So here it goes from 75
cents up to $130. Pulls back, pops up,
pulls back. This is a price that a lot
of traders like. I'm not really one of
them. I find these to be a bit too
cheap, but some traders may take
interest in it. 4.23 million share
float. Up 39%
in after hours trading. INHD. This one
um personally not interested. Uh if
anything, it's just a would be a dead
cap bounce. So, this is the stock that
was halted for over a month. Um, and
it's it's kind of sort of like a crazy
situation because this stock ended up
going up um if we look on the daily
chart on 300 million shares of volume.
You know, it goes from like $2 a share
to 40, whatever it was, ends up getting
halted and um then it's halted. This was
from June 8th. It's halted till July
31st. Um, there was a a short seller
that filed a lawsuit against the company
alleging uh that the company was
intentionally keeping their stock halted
during this T12 halt, not providing
information to regulators because they
knew that this short seller was paying
$100,000 per day in borrowing fees on
their short position. $100,000 a day.
Holy smokes. You multiply that by what
was it? 60 days or not quite. it was 30,
45 days, it's $4.5 million, something
like that. I mean, even if the stock
went to zero, now you've got to cover
$4.5 million in borrowing fees. I don't
know what ended up happening with that
lawsuit if that ended up, you know, I
don't I don't know. But, um, in any
case, it goes to show that there are
some short sellers that take really big
positions on these. And, you know,
eventually here they've been correct.
And over the long run, most of these
Chinese stocks will go lower. The
question is, you know, can you afford to
hold during the pain, which ended up
being about 45 days there? And when it
resumed, it resumed at $40 a share,
which, you know, it could have continued
higher. It didn't, but it could have. A
ZJ L, you short something like that and
it ends up going to um Zjy L, it ends up
going to $500 a share and yeah, you're
smoked. You're done. That's the end of
your career as a short seller. And
unfortunately, you'd say, "Well, it
doesn't make sense. You know, the
company it there's no fundamental reason
for it to go that high. Blah blah blah
blah. Here you go. 6 months later, it's
all the way back down." I get it. I know
it doesn't make sense to me either, but
I'm not going to I'm not going to get
stubborn and trade against what the
market's doing. I'm just going to ride
the momentum that is created here. So,
that's kind of my approach each day. You
know, I don't just I don't counter trend
trade. I'm not trading against the
trend. I look for stocks that are
already starting to trend and then I
just jump on that momentum. That's what
most trendbased trading and momentum
trading is all about. Finding an
established trend and jumping on it.
Now, for me, I like to trade the stocks
that have some of the biggest trends,
that are up the most on the day with the
highest total volume, highest relative
volume, because when a stock has a trend
where it's going up 50%, 75%, 100%,
200%, there's just so much more
opportunity in there to jump in, jump
out, and clip 5%, 10%, 20% winners on
individual trades. Whereas, if I was
trading something like, you know,
Nvidia, you know, yes, Nvidia, you could
say, "Oh, it's going up $5 a share, $10
a share. There's a lot of range here."
Yeah, there is. But you would have to
use leverage or derivatives in order to
get a good return on this range because
the stock is $200 a share. So, you know,
and honestly, if you're trading
something like this, you might as well
just be trading the S&P 500 because
they're going to be so closely tied
together. all these stocks, the
algorithm kind of ties them all
together. You know, the S&P starts
dropping, these stocks all drop, too.
And you're sort of like, which comes
first? The S&P 500 is, you know, an
index of the 500 biggest companies are
the ones that are part of the the index.
So, is it the individual company that
has to start moving and then the S&P
changes or is it the S&P? And it's very
it's it's kind of unbelievable how all
of these stocks seem to move together.
The market's going up, they're all going
up. The market's going down, they're all
going down. So why trade one or the
other? You may find that some are are
more reactive. A 1% change in the index
across the board is going to result in
like a 3% change on that stock. So
that's going to be a higher beta stock.
But and nonetheless, I'm getting into a
bit of a tangent. It just to me isn't
the place where retail traders with
relatively small accounts are going to
find much success. And trading in small
accounts is kind of like my thing, you
know. So for me, you know, we'll pull up
the charity challenge here. Um this is
the thinker swim challenge I'm doing
right now. Turning $2,000 into 65 grand
in 30 days. Now days 31 uh was yesterday
or Friday. I mean I I just I wouldn't
have been able to do that trading um
anything other than these highly
volatile small cap stocks. So this is
the area where I focus. Um you've got to
manage your risk. It can be there's
definitely some volatility there and as
you can see uh you know just from my
last um you know 60 days 90 days
whatever um you know definitely have
suffered some draw downs here and there.
Uh but on the other hand um you know
boom we're looking at uh $1.4 million
even after Friday's loss. So the glass
is I mean it's you know this is the top
of the glass here. It's a very narrow
glass and it's 95% full even after the
Friday loss. So, I'm grateful. This
market has been hot. We've been getting
lots of great opportunities and I'll be
streaming tomorrow at 7 a.m. If we have
some stocks that are on the top gainers
scanner right here, I'll certainly be
jumping into those uh trying to break
the ice and build the cushion. And once
I've got a cushion, then you know, we'll
see what we can do from there. So, I'll
remind you as always that well, two
things. Number one, if you're interested
in doing a two-eek trial, it's $20. You
can watch over my shoulder and use this
same software here for charting,
scanning, and breaking news. $20 for two
weeks. So, check that out. That's number
one. Number two, I'll remind you as
always that trading is risky and my
results aren't typical. And there is no
guarantee you'll find success whether
you trade with me or learn on your own.
So, manage your risk and practice in a
simulator before putting real money on
the line. I'll put a link to my day 30
episode of the small account challenge
right here that you guys can check out
of me recapping turning 2,000 into
65,000 in 30 days and donating all of
those profits to children's hospitals
across the country. Have now donated to
40 children's hospitals with the goal of
donating to 50 and hopefully I'll be
able to achieve that goal within the
next uh few weeks. So, thank you guys as
always for tuning in and I'll see you
back at it streaming at 7 a.m. tomorrow
morning.