Tips to Rebound After Bad Trading Yesterday

[RagingBull Elite]( Dear Trader— Jeff Bishop here, If you got knocked down in the market yesterday, you’re not alone— it was a sea of red and a lot of traders lost money. But the good news is that today is a new opportunity for better decisions. In today’s issue of All-Access, we’ll provide a macro view of what happened in the market yesterday and what to be aware of moving forward— as well as 2 short ideas. By the way, investing in private companies is a great way to diversify when investing in stocks feels uncertain. [Find out here at 8 PM ET tonight]( how we believe we’ve found the Tesla of offroad vehicles. By attending, you’ll even have a chance to win one of these bad boys. [I'm an image] Today’s chart of the day is SPY. With the S&P 500 closing down 1.85% yesterday, it would be foolish to focus on anything else. Here’s what the intraday action looked like: [Alternate text] While the mainstream financial media might find dozens of reasons for the weakness, nobody really knows why. The truth is that there is plenty of uncertainty in the near future and the market participants seem to be in risk-off mode. At least until things become more certain. Here are the main catalysts you should be aware of: 1) The US President Elections 2) Earnings season 3) Disagreement on the stimulus package in the US Government 4) Potential for additional damage to global economy from the second wave of the virus All of these events are almost impossible to predict. However, there are a couple of things traders can do to prepare for uncertainty and volatility: 1) Keep an open mind Don’t let your opinion interfere with your trading. Let the market tell you which way it wants to go. The best traders know that being a permabull or a permabear is counterproductive when daytrading the market. In volatile times, there might be setups for both long and short in the same day. 2) Keep an eye on relative volume (RVOL): The higher the RVOL, the more likely that the stock will not trade in sync with the broad market. Stocks with catalyst and high RVOL generally have less correlation with indices, especially in time when everything seems to be moving in lockstep. 3) Don’t increase your sizes: When there is uncertainty, there is usually a lot of chop and headline-driven action. However, if you are making good trades, you will be inclined to increase your sizes. This could have disastrous consequences for your account. Instead, let the volatility scale you up naturally: with the ranges widening, stocks will move much further than you are used to. If you want to learn to trade the SPY, you’ll be pleased to know that Ben Sturgill is teaching traders how in [his upcoming SPY trading workshop here.]( [Alternate text] “Is the market finally crashing?” This is the first and only question that naturally comes to mind after a day like this. If you try to count the number of times you’ve heard/seen this asked over the past few months, chances are solid you’ll end up in thousands. Chances are even higher you’ve been wondering this yourself! We certainly don’t blame you— let’s stay politically correct and just say it’s “unusual” that the market is booming in the midst of a pandemic with half the world locked down. Crash/correction/pullback is likely coming— but if you’ve been a reader, you’ll know we don’t like to jump to conclusions. We stay cautiously bullish— we’re Raging Bull, after all!— but we’ll be prepared if hell breaks loose. Today’s All Access watchlist is just about that— we present to you 2 stocks we’d want to be short, shall the market finally give ground: Wayfair - W - Wayfair is no Amazon, but it’s certainly made a name for itself in the online retail space— and investors noticed. The stock is currently up over 1,200% since March’s lows, reaching as high as 1,700% gain at all time highs - The pandemic has no doubt boosted the fundamentals. For the most recent quarter, Wayfair reported a 83.7% YoY increase in net revenue to $4.3B, a diluted EPS of $2.54 per share, as well as large increases on all customer/order #s metrics. Still, it may not be enough to justify a $26B valuation for a company that’s been a steady cash burner pre-pandemic. - Lately, the stock has finally started showing weakness (or lack of its incredible strength) and broke the uptrend of the past 7 month. - With resistance above $300 and plenty of space to fill on the downside, W should provide great short opportunities when the market gives it a reason to. Our game plan is as follows: - Short zone: $280-$300 - Profit zone: $233 for half, ride the rest till $202 and keep small for continuation to $180 - Stop zone: $315 Options: Not very liquid, we’d advise traders to stay away, but might get involved short-term if the setup is A+. [Check out the Bullseye trading strategy here]( to learn about these kinds of setups. [Alternate text] Fiverr - FVRR - Fiverr is a “gig” platform, an online marketplace for freelance services. The stock is up nearly 7-fold since March’s lows, making it one of the top performers this year. - The fundamentals have definitely improved. For the first time ever, FVRR even managed to turn a $0.10 per share profit in the most recent quarter. Still, it’s hard to justify a nearly $6B valuation for a company that’ll bring in $177-$179M for the year with lack of consistent profitability. - Much like W, the past 2 weeks have marked the first time that the stock hasn’t gone straight up and broke the uptrend— a clear shift of character and momentum. - If helped by the weak market, FVRR has plenty of room to the downside and we want to catch a chunk of it Our game plan is as follows: - Short zone: $155-$170 - Profit zone: $137 for half, ride the rest till $115 and keep small for continuation to below $100. - Stop zone: $182 Options: Dec 18th $130 PUT, currently priced ~$10. [Alternate text] [Alternate text] A big question on every trader's mind right now is, “How do I trade ahead of elections?” While none of our pro traders have a crystal ball, we polled a few of them to see what they’re expecting and what they’re looking into: [Alternate text] "I think the market is going to be volatile as we approach the elections. Markets hate uncertainty and that will likely be the case for the next 2 weeks as we go through the election process. We are also seeing upticks in Europe of *you know what* cases and the U.S. is lagging 3 weeks or so behind typically, so that could add fuel to the volatility as well. I continue to like the biotech space because regardless of who wins, I see biotech's innovation leading the way and the sector gets the added boost from vaccines/ therapeutics/ diagnostics that are developed." ~ Kyle Dennis of [Trade with Kyle]( [Alternate text] "The market is very, very unsure right now— and as such, we are going to see continued volatility into the election and likely through the election. That will provide opportunity of course— but right now, you just don't need to trade with big size to make decent money. So I think you can still take shots right now, but your size has got to be smaller than it would be in a 'normal' market." ~ Nate Bear of [Weekly Money Multiplier]( [Alternate text] “The market has been consolidating for the last month as the fractal energies were near exhaustion and needed to charge back up. I consider the S&P the best view of the overall market. Going into the election, the energies on the S&P Daily and Weekly charts are almost fully charged and should be by election day. The market is a forward looking instrument and is always trading what it believes to be the future. That means, it has already priced in what it believes to be the results of the election. I think that is some sort of gridlock, no matter who wins. And the market loves gridlock. Based on where the energies are, I predict the market will go on a 2-3 month trend higher after the election and get exhausted and have a good 20% or better correction in Q1. This will happen because all the time-frames (daily, weekly, and monthly) will be out of energy and need to charge back up. We essentially saw this same thing happen starting last October and run to exhaustion, when the market had the excuse it needed to correct. There are a lot of opportunities headed our way on all sides of the movement and I am very excited to trade the next 6-12 months!" ~ Dave Lukas of [Options Profit Planner]( [Alternate text] [[Watchlist] 3 Fractal Energy Trades I’m Watching]( By Dave Lukas of Options Profit Planner [Alternate text]( [The State Of The Market]( By Kyle Dennis of Biotech Breakouts [Alternate text]( [Penny Stocks on the Move Today]( By Jeff Williams of Penny Pro [Alternate text]( [My Other Favorite Options Play on Stocks]( By Jeff Bishop of RagingBull Investor [Alternate text]( RagingBull, LLC 62 Calef Hwy. #233, Lee, NH 03861 [Click Here to stop receiving emails from support@ragingbull.com]( [Unsubscribe from all RagingBull emails]( DISCLAIMER: To more fully understand any Ragingbull.com, LLC ("RagingBull") subscription, website, application or other service ("Services"), please review our full disclaimer located at [(. FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. 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