11 Jan

Why Aren’t You Outperforming The Market?

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It’s been a wacky market, to say the least, as political tensions rose earlier this week… as the Dow futures looked to gap down on Tuesday, only to turn positive on the day.

The Nasdaq and S&P 500 notched record highs this week… and traders are still trying to make sense of the market.

 

 

This morning, Iran came out and admitted they “accidentally” shot down a Ukrainian jetliner. That means we could be setting up for a massive gap down come Monday, who knows. Whatever the case may be, I’ll be ready.

If you’re having trouble finding winners in this environment, I don’t blame you… and you shouldn’t beat yourself up about it.

Tom Brady couldn’t have said it better, In both life and football, failure is inevitable. You don’t always win. You can, however, learn from that failure, pick yourself back up with great enthusiasm, and place yourself in the arena again…And that’s right where you’ll find me. Because I know I still have more to prove.

This actually applies to the markets as well. However, we have to approach it a little differently. For the most part, as traders, we have to journal all of our strategies and see exactly what our money makers are, and where our losses are coming from (if any).

Then it becomes simple, focus on the winning strategies. Right now, my small-cap momentum patterns are working out extremely well, and I want to walk you through a few winners I had this week.

 

Two Patterns, More Than $20K In Profits

 

Last year I started Q1 up about $300,000 and took a 2-month break from trading… and it was all thanks to my small-cap momentum trades. As I reviewed my trades, I realized these are the best plays for me, especially when it’s hard to figure out the direction of the overall market.

So I’m sticking to my guns, and I’ll be focused on these plays for the time being.

Let me show you how it all works… and I want to kick things off with my trusty fish hook pattern. 

Fish Hook Pattern Reels in $12K Winner

It’s really simple with this setup. All I’m looking for is beaten down names that have found a support level and just starting to bounce.

With this setup, there are 3 things I’m looking for:

  • The stock experiences a massive drop.
  • The stock finds support and holds.
  • The stock to catch a small bounce.

Well, I spotted this pattern in Overstock.com (OSTK), and I just knew I had to get in. Just take a look at the daily chart in OSTK.

 

 

OSTK had a massive drop during the last few months of 2019… and found some support. That was a sign OSTK could reverse and catch a bounce.

The thing is, I was a little late to the party, so I had to plan accordingly. Here’s what I sent out to my Jason Bond Picks premium subscribers

 

 

Of course, I was chasing a little because I was stubborn and tried to nail the perfect entry.

However, once I saw the stock running up… I couldn’t ignore the price action, so I decided to get in. I wasn’t looking for a massive winner, just 5-10%.

But the thing is, OSTK had massive upside potential, and it could’ve been good for a 20%+ winner.

Here’s a look at what happened with OSTK.

 

 

The stock hit a high of $8.83 that day… and I sold into the strength. I locked in about 10% overnight, a $9,000 profit overnight! I didn’t want to get greedy, so I sold ¾ of my position, and let the rest ride.

 

With this specific play (since I chased the stock), I need to properly risk manage. Since I already locked in a $9,000 winner, I wanted to let the rest ride. However, for the rest of my position, I actually put a stop-market order.

That way, if OSTK actually reversed, I wouldn’t give back all my gains and turn a winner into a loser.

Well, my order got hit at $8.50 on the remaining shares, so I still came out on top with about a 10% winner overall.

 

 

That was good for approximately $12,000 overnight!

The Rocket Pattern

Another one of my favorite setups is the rocket pattern. Basically, I’m looking for stocks poised to break out… and this was the case in Glu Mobile (GLUU).

I’ve talked about this a lot in Q4 2019 as a January effect trade, and this week I took it.

Here’s what I sent out to my premium subscribers:

“Few weeks swing, maybe more. In play above $6 with range to $7 if it works. Up on a down day today suggests someone is buying and nobody is selling which to me makes it a safer swing in an uncertain market.”

 

If you look at the chart above, GLUU was trending higher and reached a key resistance level. So I took the play.

However, since the market was a little shaky, I decided to take the base hit and lock down a $2,500 winner.

 

 

Last, but not least, I took a momentum play in Genetic Technologies (GENE).

 

The setup you see above is known as a “bull flag” setup. Typically, when we see this pattern, the stock rockets higher… and I was right on the money. Of course, I alerted my Elite clients about this trade… and guess what – this was good for another massive winner.

 

If you want to outperform the market… it’s really simple. Find what’s working and focus on that. That’s what I’ll be doing… and since my small-cap momentum strategy works extremely well in any environment, I’m going to stick with them.

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