This Bull Doesn’t Break!

If you didn’t notice, I’m not a bull that breaks easily.

In fact, I like to think I view this recent correction differently from most of the doom-and-gloom traders out there…

For instance, I see a sale going on right now. Stocks are cheaper than they were just one month ago. They’re 10% off! That’s looking like a decent deal right now…

Plus, we have the S&P 500 retesting its June breakout above 3,200 this week. So far, we’re seeing buyers come in at these levels. That’s a bullish sign. I’d be more inclined to think we have some more downside left to go if the S&P failed to hold this level. But so far, so good.

But just because the market is having an off month doesn’t mean we can’t find good trades on the long side. Right now, it’s all about being smarter and more selective with our trading.

In fact, I have my eye on a fresh trade right now. Watch my interview below to learn all about it:

 

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Chart of the Day: No reason to buy this tumbling stock…

Greg Guenthner

Nikola Corp. (NASDAQ:NKLA) is in trouble again.

I’m sure you’ve seen the headlines. The alternative energy auto stock that somehow captured the imagination of countless speculators is imploding just months after appearing on the Nasdaq following a reverse merger with VectoIQ Acquisition Corp. A damning short-seller report has sparked investigations from the Justice Department and the SEC. The company is issuing more shares…again. And the stock is plummeting as the controversy grows.

Shares tanked 20% to kick off the new trading week. We saw a small recovery Tuesday morning, but the chart remains a complete mess:

NKLA

The last time I mentioned NKLA back in July, I said I wasn’t sure if the company will be around in five years. Maybe that’s generous. By the looks of things, the company might not make it to 2022.

Thankfully, we have our charts to guide us. There was simply no reason to blindly pile into this stock without an exit plan in place once the stock failed to hold its early September gains. The stock has now tumbled almost 75% from its June highs — and lower prices could very well be on the way.

Trading Tip of the Day

It was another rough start to the week for the market…

As usual, many traders are focused on how to bet against stocks. Unless you’re just looking for a quick day trade, this tactic can be a huge mistake.

During most corrections, flipping through your charts to find pockets of strength and potential support zones that could produce meaningful market bounces are much better uses of your time. We’ve talked a lot about how less is more when the markets aren’t working in your favor. By that, I mean fewer trades — not less work!

Put in the time to find those strong stocks during these corrective moves and you’ll be miles ahead of other traders when the market finally bounces.

— 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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