Fly High with These Hot Tech Trades

The tech takeoff has been epic, and the S&P is back within striking distance of all-time highs following its incredible rally. The broad market barometer has defied all logic and gained 50% off its March lows

Think for a moment about how significant this recovery rally has been in this time of global turmoil…

As I’ve said time and again this summer, money flow has made everything fly. Those not long have been dead wrong.

I know it can be difficult to ignore all the bad news out there. In fact, I just had some good friends fly up to my lake house last week. They too are having trouble grasping the difference between the bad economy and the go-go markets.

But sometimes you have to hop onboard and ride with the wind…

One of my visitors was my childhood friend who grew up with me in this Lake Superior oasis. He’s now a captain for a major airline — and offered to take me out on a plane from his flying club to see the sights. Needless to say, the trip did not disappoint…

helicopter

Being in the air certainly gives you different perspective!

It’s critical to trust your instruments and also visually see precisely what is in front of you at all times.

The same discipline is needed in the markets. Trade what you see — not what you think!

Stocks are soaring right now. But the flight will not last forever. Make sure to plan ahead for a safe place to land…

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Chart of the Day: Time for a social media sympathy rally?

Greg Guenthner

Last week, we were treated to more new highs in tech sector. The moves we’ve witnessed have been nothing short of breathtaking. As Alan noted, the flight won’t last forever — so we need to enjoy these impressive breakouts while we can.

Of course, the FANG names get much of the credit for last week’s rise. Apple Inc. (NASDAQ:AAPL) and Facebook Inc. (NASDAQ:FB) were the strongest of the group as each posted new all-time highs.

But Facebook’s move takes top prize. A buying frenzy ignited shares heading into the weekend, bringing its gains since Jul 30 to more than 17% — an incredible move for one of the biggest tech stocks on the market.

Facebook’s incredible run is lifting other social media stocks as well. Just take a look at this Pinterest Inc. (NYSE:PINS) chart:

PINS

PINS hasn’t slowed down a bit since its earnings breakout late last month. The stock is now up nearly 250% since bottoming out back in March. What a move! And it doesn’t look like it’s finished just yet as shares continue to drift higher following its earnings beat.

I expect other social media stocks might follow suit in the weeks ahead — including a couple that still have some work to do before putting in new highs. Stay tuned…

Trading Tip of the Day

“As long as a stock is acting right, and the market is right, do not be in a hurry to take profits.”

– Jesse Livermore

Well before most speculators discussed the market in terms of trends, legendary trader Livermore possessed a deep understanding of the madness of stock market participants. He knew the trend was his friend – and he was more than content to ride it until it stalled out.

These days, it feels as if traders’ timeframes are getting shorter and shorter. Instead of letting a trade run its course, speculators are taking profits in a matter of hours, or even minutes. Sure, they might make some spare change here and there. But the real money is made by grabbing onto a big trend and not letting go until the market shakes you off.

If you’re confident in your process, don’t be afraid to let your winners ride!

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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