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Saturday, October 8, 2016

Trading Recap 10/7/2016

Friday was a losing day. There were some good trades and some bad ones - good ideas again that I didn't end up executing on unfortunately. I did make a stupid trade on CLVS that deterred me from trading it again when I had the right reads on it completely. I just gave it a random shot and forced something that I knew wasn't really there for some reason - very unusual of me. But afterwards I didn't care about too much although I wish I traded it later on.

AUPH: Going into the day I wasn't sure what to think and wasn't in a hurry to short it. I still thought that it could go a bit more due to the float rotation the past few days. The ideal trade was it pushing to r/g with heavy volume and failing. It pushed to the prior support from the prior day and thought that could be a trade. I did find it weak looking that it broke that level in premkt trading. So I thought about shorting it when it got up there but overall decided against it. It did get under vwap after that though and I decided overall it looked weak then. So I gave it a shot and for what I wanted to see and for my trade to make sense - it wouldn't get over vwap again. It hovered under vwap for a while but I just saw it basing and said this doesn't look like a good entry overall and it's not fading right away like these setups usually do so I got out for flat essentially and it was right before it made its push higher, which was good. Afterwards it looked like it didn't have much volume on the 1min although looking back it was still alright. I saw it get under vwap again and thought about giving it another shot but again I thought about the lowish volume and the fact that it could just spike higher randomly. Unfortunately, I didn't see a very, very good setup afterwards since I took my eye off of it where it just hovers below the prior support and then the dump just ensues. Overall, it was worth a shot in the morning, it was just bad timing but it was good to take it off when it wasn't doing what I thought it should. Only thing to learn from is to keep things more on watch I guess and don't discount your ideas so much as again, they are getting better. The only thing I could have done is start into it on that push and give it to 5.20s where I thought a push would happen to add in and that would be my risk. Had I done that I probably would have added under vwap and maybe covered it all when I didn't like what it was doing. Waited until it came back down again to short it. Obviously this is hindsight but something to think about.

LPCN: I didn't see it all for the morning move but saw it on my scanner later on. I saw the news and daily chart and the price target just seemed like a pump that would be faded back to nowhere. So while I missed the initial move I thought there was still a lot more room to go. I shorted after it looked like it was peaking the prior levels and once it came under I added into it. It was just consolidating lower there and it ended up being a bear trap so it ripped up a bit. I told myself damn I got caught in the trap but I think it will dip at least. So instead of panicking out at the top I waited to see if it dipped. It dipped near my avg and I just got out there which was a good choice. So no harm done from this trade. Later on I saw it higher and instead of ignoring it I should have thought - hey it looked liked it squeezed out all the bear trap people who didn't cover before. It had a push above the 5.7 level that was rejected which showed me it could have squeezed everyone out. At the same time I thought that these analyst upgrade stocks sometimes get pumped even higher and I didn't want to be exposed. But it ended up being a good trade. Later on in the day I saw it stuff vwap a few times and I thought ok it could fade more but never gave it a shot. But then it went through vwap with some decent volume and I thought ok this could fade now that they pushed it here. So I shorted small in case they needed to pump it higher. It got under vwap so I added and then it just hung around. I saw they might need to pump it higher because they flashed some big fake bids and I saw offers that needed to be filled so I didn't want to a repeat of OPTT so I sized down and waited. It came back under vwap so I got back in again to half size but it just never washed out and just went a little higher so I covered for a small loss. Overall it was a good shot and worthwhile and I am proud of how I sized in and out of it when I thought they would pump it higher.

CLVS: What a pump this turned out to be. Unfortunately I didn't trade it all during premarket although the spreads were pretty wide at some points so it was definitely sketchy. My thesis going into the open was that there would be a lot of bagholders who would want to sell so I was still short biased despite the deep pullback. I thought about shorting it at the open but didn't see a really good setup and I was really undecided if I should just get in there or not. It did end up working for a good scalp back to the lows but I think a lot of people had the same idea to short it and so it rocketed back up and squeezed. I did think about shorting on a big volume bar candle but wanted to wait it out. It did go a $1 higher and I saw it hovering near the top. It popped up again past the candle and I definitely felt it just did that extra pop to get everyone out. I definitely thought about shorting it there but didn't and I regret it as that was definitely a nice scalp. Later on I did short it at a random spot and as I alluded to in the intro, it was just a forced trade that came out of nowhere for some reason. I looked way too minutely into the chart. After that I didn't trade it although it did the exact same thing again where it had a small final push after consolidating at highs before coming off. Later on it just did nothing for a while and it was just churning around. I figured it would dip and trap more shorts and come back into range or stuff hard and get all shorts in. It did the former but what was interesting was it just got back to the prior $31 level and didn't go higher after it must have trapped shorts. I did find that odd but wasn't sure although it definitely looked weak. Later on, even though the dips were getting bought back up I saw that each successive pop was lower so I did think about shorting it but couldn't really find an entry I liked and by the time I noticed it, it was at the bottom of the range and I didn't want to short at support. I figured I would let it drop and short a retest of $30 for a backside move once shorts were exhausted and also something else I didn't think of in real time was that longs who were bagged might have waited for a bounce and something in the the $30ish level before selling. Anyway it never got back to $30 - once a stock gets all the shorts out it just goes down without issue. I didn't want to short it lower than that although looking back it did have that nice consolidation underneath lows that works very well just like AUPH. So that might be why it squeezed how it did - only shorts in the morning and no longs selling until it got higher. So overall besides that one trade I had a good read on it but just didn't execute as well as I had liked. Overall in a situation like this I should be wary that others are just going to short it and that longs may want a bounce before selling. Another important thing to mention is that throughout the trade I thought it would have to go parabolic a bit before a top was put in. I tend to default that it has to go parabolic but a top can be put in via other ways too. One thing to note is it did go a bit parabolic earlier but it still went a bit higher anyway. A top can be put in just via price rejection (each of the small consolidation breakouts getting rejected right back down). There was no big volume stuff or parabolic to mark the top - just an initiative move upward that got shorts out and longs in and that was it.

Other ideas I had:
Short COUP when it went red which worked fantastic - sometimes these work and sometimes they don't.
Short ACIA when it was under vwap - it definitely worked and I did notice it was pretty weak after the offering. There were no shares to short and it did pop after I would have gotten in had there been shares but it goes to show you have to give things room.

Things to work on:
1. Plan better in the mornings. Balance this with just reacting vs. predicting.
2. In situation with CLVS - remember that in the beginning it could just be shorts that go for it and longs may wait until higher prices to sell which can lead to a squeeze. When the news is obviously bad, it can be crowded to the short side.
3. On CLVS trades you have to short when it looks good to breakout and cover when it dips for sure.
4. While you are definitely perceptive, AUPH and CLVS patterns were good. It is good to remind yourself during the session to look at the charts again in a big picture way for the day.
5. In cases like bear traps think of where they would panic out of and then short there like LPCN/CLVS.
6. Tops can be put in via just pure price - there doesn't have to be a big stuff volume bar or a parabolic - the stock just has to get shorts out so if that means it's just a small initial move upward out of a consolidation that gets rejected then that's it. It is all situation dependent but don't always look for big volume/huge parabolics as tops all the time.

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