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How to “Fix” a Trade That’s Moving Against You

By , America's No. 1 Pattern Trader, Money Morning • @powerproftrades -

Let's be honest: We've all broken something, whether it's a favorite coffee mug, a bicycle, a window, a computer, a car, a toy - anything.

Me? I'm usually inclined to try to fix whatever it is before I throw in the towel and replace it.

What a lot of folks don't realize is that trading stocks is the same way.

Now, sometimes there's no fixing it, and you've got to close out a position with a loss. It helps me to think of it as paying for a lesson.

But more often, you can quickly fix that trade and walk off with profit in your pocket - and, of course, the satisfaction of a job well done.

Here's how...

The Profitable Move to Make as We Wait Around for Stimulus

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks -

The market's big struggle right now, its driving narrative, is between COVID-19 and the prospects of a new, multitrillion-dollar round of stimulus.

Stocks have rebounded over the past two days, after an apparent improvement in the president's COVID-19 symptoms merited his discharge from Walter Reed National Military Medical Center.

On the coronavirus front, investors seem to have digested the bigger picture: The virus remains a severe threat and a major disruptor, but death rates are declining right now, better therapeutics are available, and several vaccine candidates are on the horizon.

Against this backdrop, we've seen no convincing signs of progress in House Speaker Nancy Pelosi's and Treasury Secretary Steven Mnuchin's negotiations over a fresh multitrillion-dollar round of stimulus. The rally lost some significant "steam" on Tuesday after U.S. Federal Reserve Chair Jerome Powell and Speaker Pelosi stressed the need for fresh stimulus, then began a much steeper dive minutes after Trump said negotiations were off until after the November election.

White House-watchers and Wall Street insiders opined that Trump's abrupt move was likely a negotiating tactic, not the end of the stimulus road.

That's established the pattern investors will have to contend with: pullbacks, driven by stimulus worries, will be promptly followed by rallies, as coronavirus fears ease. Rinse and repeat, until further notice.

I'll tell you what I think of our stimulus chances, where the market will go next, and most importantly, the one profitable play you can make right now...

No Stimulus Necessary for My Watchlist Stocks to Move

By , Special Contributor, Money Morning -

The airline sector continues to get clobbered by the pandemic with no stimulus in sight.

But it would be a mistake to count on it regardless.

The same is true of investing and trading right now – a big stimulus rally could happen, but don’t bank on it.

Here’s what our Andrew Keene is doing instead… .

Read more...

The Long and the Short of It: How to Play the 2020 Election

By , Behavioral Trading Specialist, Money Morning -

There's no guarantee what the market will do post-election, but the closer we get to it, traders start paying more attention to how the results of Nov.

3 will impact the markets.

That's why it's time to hedge our bets and keep a close eye on the VIX to determine how much of a hedge we should have in place to protect ourselves against a possible plunge...

Read more...

Your "Winter Survival Plan" Means Avoiding These Six Stocks Now

By , Technical Trading Specialist, Money Morning • @DRBarton_Stocks -

The warm summer weather allowed people and restaurants to enjoy outdoor activities safely.

But now with the onset of fall and dropping temperatures, COVID-19 cases are resurging.

In fact, four sectors are going to be hit hard this fall and winter.

So D.R.'s showing you the six stocks to avoid now in his "Winter Survival Plan" to ensure your portfolio is well-insulated....

Read more...

Here's the Right Profit Plan for This Wild Market

By , Special Contributor, Money Morning -

We've seen the Dow swing from 29,100 to 26,763 since the highs of Sept. 2 - and if that's not "volatility," I don't know what is.

That's probably pretty scary for buy-and-hold investors, but the thing is, as traders, we absolutely need that volatility; if stocks won't budge, most trades just won't make money - definitely not the kind of money that frees you up to spend an hour trading and the rest of the time doing what you want.

So we need markets to swing around a bit, and that means we also need a good plan to stay on the winning side of those big moves.

It turns out "plan your trade and trade your plan" is an old Wall Street saying for a really good reason.

Let's do it - it's easier than you might think...

You Could Double Your Money (at Least) 10 Times Between Now and Just After the Election

By , America's No. 1 Pattern Trader, Money Morning • @powerproftrades -

As we've talked about before, the stock market can act as sort of a crystal ball for an impending U.S. presidential election.

I've done it, lots of independent analysts have done it, and you can see for yourself, too; we look at the three months leading up to an election to try and see if the incumbent resident at 1600 Pennsylvania Avenue NW will stay put, or be sent packing.

This analysis has shown that the S&P 500 can correctly answer that question 86.4% of the time - not bad.

Of course, these days, the markets are obviously undergoing a correction of some kind.

After a dynamite August, the big indexes - the Nasdaq, S&P 500, and the Dow - are down 10.7%, 9%, and 7.7% respectively, from their Sept. 2 intraday highs.

Normally, that might get an incumbent president in the mood to look for movers.

But this bearish trend isn't necessarily decisive because, if we know anything to be true, this is a year and an election unlike any other.

So the S&P 500's uncanny predictive powers might be a little weaker this year. I think, regardless of who the frontrunner or ultimate winner is, it's likely we'll see more downside between now and then.

This is a fantastic opportunity for anyone who trades (and if you never have, you can certainly start now). That's because, for us, extraordinary times mean extraordinary profit potential.

This is real once-in-a-lifetime stuff...

My Favorite Medieval Italian Guy Likes These Stocks Now

By , America's No. 1 Pattern Trader, Money Morning • @powerproftrades -

As I predicted last month, September's been a volatile, "down" month. In fact, the big indexes are on pace to turn in the worst September results since 2011.

But, like always, there are some juicy opportunities in all that volatility. Volatility's always a trader's dream, because a stock's got to move - up or down - for us to make money. The more the price moves, the better.

Right now, I'm going to show you an old - as in, 800 years old - method you can use to spot stocks that are about to move, and how to work out how far they're likely to go.

That's not only a huge factor in spotting stocks you might like to buy and hold at a good price, but it can also help you find when and where to move in your trading...

Let's get started...

I Found a Bear Market Hiding in the Weirdest Place – Here's How to Profit

By , Quantitative Specialist, Money Morning -

Tech stocks have been the most celebrated of this pandemic year.

It's been tech that's kept us connected to friends, family, and colleagues. It's kept some of us working, and it's helped some of us find work. Tech has kept us clothed and fed.

I'd go so far as to say modern tech has been the glue that's helped hold the country together since March.

Ultimately, it'll be technology that gets us a vaccine or therapy in record time, which in turn gets the economy out of this mess and on track to a full recovery.

In that sense, it's really a no-brainer that the tech-centric Nasdaq Composite has been outperforming this year, despite the economy. It took the Nasdaq 20 years to double from 5,000 to 10,000. But it was the first index to reach record highs after the March crash, shooting as high as 75% since then.

For a $10 trillion index to turn in that performance in a year - after a crash... Well, that's when you know it's got the "secret sauce."

That's why it was so jarring to uncover - let's call it - the "Nasdaq's dirty secret." I found it when I was looking at some charts, researching some recommendations for my paid subscribers.

And no, I'm not talking about the current correction underway.

It turns out, there are a few skeletons in this closet. Skeletons that could jolt some unprepared investors.

But for us, it adds up to some choice profit opportunities...

Don't Fall for the Nikola Rebound – Buy This Stock Instead

By , Special Contributor, Money Morning -

Nikola Corp. saw its stock gain 3% yesterday - despite still being in the middle of a major fiasco.

As I told you last week, Nikola has been dealing with legal issues regarding a slew of fraud allegations. And while the company was thoroughly investigated and mostly cleared, the investigation's impact is still playing out.

The biggest loser happens to be Nikola's founder and chair, Trevor Milton. It was announced on Monday that the founder voluntarily resigned - 10 days after short-selling firm Hindenburg Research released a report claiming Nikola was an "intricate fraud."

Milton's resignation only further spooked already-shaken investors, and the stock plunged nearly 30% in premarket trading on Monday. While Nikola had a backup plan already in place - including adding Stephen Girsky, former vice chair of General Motors and a member of Nikola's board, as chair of the board, effective immediately - investors still piled selling pressure onto the stock.

Now, while Milton has stepped away, he's nowhere near done. Here's what the young founder had to say...

"I asked the Board of Directors to let me step aside from my roles as Executive Chairman and as member of Nikola Board of Directors. The focus should be on the company and its world-changing mission, not me. I intend to defend myself against false allegations leveled against me by outside detractors."

But regardless of whether Milton "clears his name" or not, Nikola is still in a tough spot. And it's going to be one that's hard for the company to bounce back from - especially as the stock continues to move down.

The Perfect Options Strategy for Today's Volatile Markets

By , Money Morning -

The stock market has been a very different place since setting all-time highs on Sept.

2.

Volatility has kicked up and we've seen a few days that could make us question the wisdom of remaining in the market.

The CBOE Volatility index has crept up to the high 20s in the last couple weeks.

Of course, that's nowhere near the nightmarish high of 82 we saw earlier in March with the COVID-19 crash.

But anything above 30 is considered high volatility under normal circumstances.

Read more...

How to Play Snowflake Stock Now

By , Special Contributor, Money Morning -

The Snowflake IPO certainly had an impressive run, and its stock more than doubled at its debut, leaving it with a value of around $70 billion.

Though the stock did dip a little on Thursday (it did climb back up mid-Friday), it hasn’t stopped a small group of insiders and pre-IPO investors from boosting their net worth.

But here’s how regular investors should play it….

Read more...

Double Your Chance to Profit with This Two-Week Trade

By , America's No. 1 Pattern Trader, Money Morning • @powerproftrades -

The markets seem to signal another February-sized correction.

Add in COVID-inspired economic conditions and there's a good chance stock portfolios may see another 35% drop.

But while most investors worry or run for the hills, our Tom Gentile expects nothing but profits.

Should the markets go red, Tom's going to show you how to double your chance to make money...

Read more...

The One Profit Play I See in the Nikola Scandal

By , Special Contributor, Money Morning -

Would-be electric truck maker Nikola Corp. is one of the biggest stocks of the mobile-investing craze of the past six months. Its stated goal is to "transform and disrupt the transportation industry globally."

Last time I checked, the global transportation sector was worth in the neighborhood of $6.5 trillion, so there's no denying Nikola is aiming high. As I've said many times here, the electric vehicle industry is the future. Tesla has blazed the trail and proven it. (Get it? Nikola? Tesla?)

It's just that Nikola hasn't really built anything yet.

With a $30 billion market cap, it's the world's biggest truck maker that hasn't built or sold a single truck. Nikola's ideas and concepts are awesome, but there's no getting around the fact that they're just ideas and concepts.

That hasn't stopped retail investors from snapping it up. NKLA shares have been on a wild ride since the pandemic started. At one point in early June, the stock scraped the $80 level, and it still sells for more than three times what it did at its IPO.

But now the company is under attack by a very aggressive short-seller. These attacks have already slammed the shares by as much as 36%; there's no telling how much the short-seller may have made in the process.

It's more important than ever for regular investors to know just what's going on here, because there is a profit play to be made...

How to Protect Your Hard-Earned Money with Options Right Now

By , America's No. 1 Pattern Trader, Money Morning • @powerproftrades -

A UBS study not long ago polled 3,750 investors, and 81% are predicting another market crash before the end of the year. The average drop of the predictions? Thirty-five percent.

Now, I'm usually not one to run with a crowd, but in this case... Well, even the most bullish optimists out there in Sunshine Town have to admit, the risks are there, and they're pretty easy to see.

We've got a potentially chaotic, drawn-out presidential election in November, which is right around the time experts agree cooler weather could bring worse COVID-19 outbreaks. We've got tensions with Iran; China and India have a bone to pick with each other, too. And, any given hour of the day or night, a provocative tweet from the White House could upend any and everything, really.

The 10% dip the Nasdaq took last week could be just an appetizer. Any one or a combination of those things could send stocks tumbling just as low, or lower, than we saw in March.

Look, I'm not saying this to spoil your good time. And I'm not saying it's time to head for the hills - not by a long shot.

But it is the perfect time to look at some inexpensive and, in some cases, potentially very profitable ways to fortify our portfolios and any long-term positions we might like to have on.

These moves will work if we have another crash, but they'll also pay off if we get another big gap downward like last week's, which could be even be more likely than a flat-out crash.

Here's what to do...