Make Volatility Great Again

Episode Summary:

• SmileDirectClub gets love from traders SDC
• More Vaccine Data
• IPOs to watch this week: Toast and Freshworks

Guests:

Tim Quast, Founder/CEO, ModernIR and Market Structure Edge 35:00

Twitter: https://twitter.com/_timquast

Matt Hammond, IPO Warriors 61:00

https://www.Ipowarriors.com

Twitter: https://twitter.com/warrioripo

https://www.pngaming.com/

Penn National Gaming, North America’s largest regional gaming operator, is a highly innovative provider of retail and online gaming, sports betting, live entertainment, parimutuel racing and hospitality.

BENZINGA CANNABIS CAPITAL CONFERENCE

The premier gathering of cannabis entrepreneurs and investors in North America returns for a 2-Day Hybrid Event on October 14-15.

Speakers will include $SNDL and other major Cannabis Companies, for more information visit https://www.benzinga.com/events/cannabis/

MEET THE HOSTS:

Dennis Dick

Twitter: https://twitter.com/TripleDTrader

Mitch Hoch

Twitter: https://twitter.com/STORYInvestors

Joel Elconin

Twitter: https://twitter.com/Spus

https://www.premarketprep.com/

Disclaimer: All of the information, material, and/or content contained in this program is for informational purposes only. Investing in stocks, options, and futures is risky and not suitable for all investors. Please consult your own independent financial adviser before making any investment decisions.

Subscribe to all Benzinga Podcasts at https://www.benzinga.com/podcasts

Unedited Transcript

coming to you live from downtown Detroit. This has been Zynga is pre-market prep with your host Joel Kahn. And this is a valid tile puppy here. Isn't it. And Dennis Dick I've been in the petty. I will buy the stock for a pet with everything that you need to start your trading day.

good morning, everybody. Happy Monday. Welcome to pre-market prep. Spencer check, mic, check, mic check. I'm sorry. I swear.

I swear. I changed it. I swear. I did a anyway, welcome to market for, to Spencer. Joel, Dennis, what are we do? We're opening down again. We just had two down weeks in a row. You wake up this morning and everything is down. Stocks are down. Bitcoin is down. Code is down. Everything is down. What are we going to do?

Everyone? That's the question of the day? Uh, make volatility. Um, he great again, we're going to talk about all of that. Oh, this volatility we're getting in the market right now. We'll talk, um, some vaccine stocks. Uh, I wanted to talk about Lee auto for a second and later on in the show. Cause they did lower their guidance today.

But, um, that'll be later. We got to talk about this volatility. We got Tim Costa on 8 35 to talk about it as well. We've got that Hammond to preview the week in IPO land at nine. But man, we got a lot to discuss today because the market is interesting again. And I'm excited for that. So go ahead and smash that like button and um, let us know what you think of our new graphics, because we got some new graph what's going on today.

You like it. You don't want to get one if you like it. And I don't want, that's all I want to hear. I only want to hear if you like it, if you don't like it, I don't really want to hear that. Um, so all that being said, let's bring up Joel's charts and uh, you can tell us about the damages this morning. Yeah.

First of all, I'd like to announce a special event on September 28th on pre-market prep.com a one to one 30 exclusive Jean monster versus our mystery guest. Uh, we're going to cover some great topics to go over to pre-med and prep.com and sign up that, uh, putting together a good list of questions for that.

Uh, let's go to the markets. Let's go to the screens here. And we got some major red here and expiration turn. Uh, they were pounding the market in the after hours. The actual clothes was 12 up at 44, 21 75, but, uh, by five o'clock to sing was 13 handles lower, not much, uh, at six, 6:00 PM the whole, the market up, uh, 43 48 50.

That is your pre-market low. I have another daily low below that. I'll talk about that a little bit later on, but just trying to find support here in the pre-market not doing a good job of it as a piece down 1.5, 6%, uh, crude after. Getting close to 73 yesterday, testing 70 down a buck, 73 and 73 0 3, a gold beacon of light here.

The only green on my front page up 5 90 17, 57 30 silver, still in the red by a couple pennies at 2332 big coin. Joining the hit parade down $3,745 at 43,700 Ethereum falling. Nearly 11%. Here were the futures are down $367 at 30 59 are triple D. I mean, I want that. Can we blame it on the quad, which, you know, often turning points in the market while you taught, we glide taught about the buyer balances and you were saying, no, no, no, no.

Be careful here. They kid flip. And they flipped a lot of them flipped big time. You just want to talk about that real quick about that? I mean, the media is going to blame this whole thing on evergreen hand. That's what I've just seen. You know, they're always find some fundamental reason the way it works.

And I know this because I have reporters that call me on. The way it works is when they see the market's moving, they go and they try to find, okay, well, what's the funnel. If they don't want to hear anything technical, they don't want to hear the market's over bought. They need a headline. I need a fundamental catalyst what's happened.

So ever grant is going to be the scapegoat here for the sell off that has been happening here for a while, just quietly. But, you know, we knew when we broke down on and, and you're right, Joel, Friday completely reverse, reverse. So we opened right up into resistance. There was some stocks actually on Friday and actually it's Thursday that we opened a resistance for Friday.

We, we opened, we were trying to open higher. We were trading, you know, and it looked like we had some buying balances and then we turned around and we flipped, but there was some wicked, wicked opens both ways. So check out this checkout, Berkshire Hathaway, where it opened, this is why you should have your orders out.

You know, if you want to get out there, you know, even if you're not a day trader, even if you're not an efficiency trader, just having your order out there and ready to rock. You got a day that the spy was opening down Berkshire Hathaway at the last second flipped to a buy and balance and open up almost four points.

This is like a fund. I mean, this is, you know, moves with high correlation, the overall market it's, buydown Burke up. And if you look at the chair, can we see, I, I get confused. I still don't like all these charts. So I'm looking at the top left, I guess. Yes, but you can see, it doesn't look like much, but we opened a 2 81 on Berkshire Hathaway on Friday.

The stock had closed the previous day at 2 77 and a half on a day. We were opening down. So fair value for Burke. I said this on Friday, I was like, this is how we play them. You know, you get the fair value you offer short and you, and you offer, you know, any bid, you know, below that the fair value. And if stock opens too high, you get short of stock opens too low.

You get long that strategy worked like a charm on Friday. So Berkshire Hathaway to 77 and a half fair value was down like 2 76, nobody, 2 81. 2 81 came in, like you took zero heat. Exxon mobile opened up a dollar. It actually indicated and looked like it was going to open way down. They flipped it at the last second.

And the stock opened up a buck on a day. That crude was way down ExxonMobil, straight in opening tech high. You short that you took zero heat straight down all day. Um, Nike, another one, Nike opened up three bucks. Three bucks on Friday. Bring that one up. And again, opening tech was the high straight down three points in about three minutes, and then it continued to leak all day.

And now obviously it's gotten ugly does report this week, I believe on Thursday. Um, you had at and T opening up 30 cents, Verizon opening down 30 cents dogs and cats living in harmony. Not really, but I'm just saying those are paired up together at and T straight down from the open. Verizon went straight up from that open quickly to try to get back in line because those two stocks pair together.

By the end of the day, they were paired right back up together. But those are any efficiencies that, you know, that prop traders take advantage of those or any efficiencies that you know, and you can say, oh, 1%, what do you do that day? But I mean, when you're deploying a lot of capital and you make 1% and one.

It's a hell of a good trade. I still don't know why these guys are, why these words, these orders are put in. I know they need the opening print. I know they need the way, give us a call or send us an email or something. And we'll like, save me a couple million dollars on those orders. I mean, holy Toledo, but yo, you talked about it and it's similar to the market.

The market really tried in the opening couple minutes to rally and it couldn't closed on the lows for the week. We got some fall through. I don't know. I mean, now things are looking a little bit more, you know, a little bit more serious on the downside. Cause now you got that, that they're really a tough area.

Now you got people that were buying the dip on Friday, right? Cause it always works. It always works. Now, what do you do? And if y'all wanted those trades work again, we're not saying it doesn't work. This is a hell of a. Um, would I be selling stocks into this, you know, heavily, probably not. I'm just saying what has been working as by the dip and saw the rip out if you're just buying the depths and if you're getting to sell the reps, you're not doing very well on the last few weeks because we have been starting to leak here, but I mean, I think you just keep playing at the same way, you know, on days like this, if you're, you know, heavy in cash, you know, if you're on margin, you're I hate being on merge.

And I just tell you right now, you know, when you're heavy, heavy, invested on margin, the markets, it works really well in an up market. It's really ugly in a downmarket though. But I mean, if you're sitting here with extra cash, maybe a and on some stocks, maybe you're looking, you know, what, what, you know, what's, you know, when we're going to highlight a few names today that still haven't breached their lows from a few weeks ago, but I mean, at the same time, I think sell the rip is working better right now.

So the easier trade and people think shorting is evil, but the easier money has been shorting. Just think about that Friday. Shorting, those opens on Burke and, and Exxon mobile and Nike, and you know what? You took zero heat. You were up significantly. So what has really been working well lately, maybe better than buy the dip of sell the rep, but we had that three, four days at the same range on spa, and we finally breached the lower end of the range.

And now we get the collapse, you know, they're going to thank every grand for that, but whatever, you know, we, we broke major support. So you had people nervous. You had a week close on Friday coming to the weekend and crypto gets beat up over the weekend. There's reasons to take profits. And there is still a lot of profits in this market.

Can I show you sure that everyone seems like everyone on there, out there has seen, right. This is a daily chart of the spy. And that, that, that, that blue wine up top, there is a 50 day moving average cut that

everybody has seen this chart. Right. I know. But even if you take you the purple crayon, so I'm not a big fan of moving averages, the purple crown, it kind of looks the same, you know, you're trying to breach, you know, but are we okay? Is this a fake down or a breakdown? We don't know that yet. Nobody knows. I don't care if you got the Muslim.

Now that's the trader that says the best track record ever, and just knows everything because nobody knows anything. It's all probabilities. So am I selling, you know, unload, I got to get the hell out now and sell everything on a day. We're down 700 Dow points. Oh, I think you're doing it backwards. That'd be selling into the Friday open.

And we've said, you know, three times last week I tweeted about selling the rep when we were ripping higher three times, go to look at my. So, I mean, they also have these to sell were plentiful. You know, what happened, happened a lot too last week. And is that we balanced hard. We like, we went down to that, uh, 44, 25, 44, 30 area.

And on Monday we bounced out of there on Tuesday. We bounced out of there and Wednesday we bounced out of there Thursday. I wasn't here. I mean, it was, it was by and then, and then on Friday, you know, cause if you got caught shortening to weakness, all those days, you got smoked. Right. But finally it worked on Friday.

So we'll see the following Monday, hot shorting into weakness. It wasn't working, but if you were shorting into strength in the last week and a half, it's working fantastically. So if you're shorting into today's weakness, it was not working for the last six or seven days. Is it going to work to. Maybe it gets a fall through may.

We're going to have a day, we're going to be down a thousand points. It can happen. But am I betting on that? Probably not because you know, more often than not, we still have this mentality that if I buy the dip, I. And that mentality, even though we've broken, maybe some support, I don't know if it's entirely broken now, am I coming in and just buying, you know, no, I'm always trading.

And why I've talked about is market neutral, where I'm picking up some stocks, but I might short some index against it, just in case, you know, that's how I trade. I play it safe. Why do I play it safe? Because days like this, I can be green on a day like this in all likelihood, I will be green on a day like this.

I don't know the day's just getting started, but, um, you know, where everybody else makes money when the market goes up and loses money. When the market goes down, I make maybe a little bit less money when it's going up, but I make money when it's going down too. So, you know, my P and L typically moves up, you know, most days.

And that's because I'm trading market neutral and taking advantage of market and efficiencies, you know, picking up a little bit extra, maybe on some sales on Friday morning where, you know, I'm picking up some extra. If I had that hedge with an index, I mean, those are ridiculous edges there. So that's what we're going to talk about when we were in Joel, we haven't officially announced it yet, but an October we're going to do it.

Webinar because their first one went very well. And we're going to teach a lot of this different stuff. You know, Rob frees in there who specialize in stuff as do with basket trading, we're going to teach market neutral trading, how to protect your capital. So let's talk today this morning right now.

Right? Every, everything is pretty much down almost. Yes. Almost everything is done this morning. Right? Sure. Um, how do you, how do you approach today? Whatever you want to describe it to you, you want to say it's because of China, you want to say, oh, there's a big fed meeting, uh, on Tuesday and Wednesday, we're waiting for that.

We're waiting for the taper interest rates, whatever, whatever you want to sit with, whatever you want to say, how, why it's here, whatever, it doesn't matter the reason, but like, how do you approach today? You've got to have your list and you know, and everybody's list is going to be different and everybody's portfolio is different.

So you can't just take and blanket and say, this is what you do. You got to look at your own positioning. Um, I've been sitting with cash. You know, we know that for a while, it's been the wrong move. I was, I moved up to 40% cash three months ago because I was nervous that we were just getting over, bought it was the wrong move.

We continued to move higher after that, even though IWM has really gotten nowhere since I went to cash, buy has moved higher, was the wrong move. So now maybe I'm looking, maybe I want to deploy some of that. Maybe I want to go to 35% cash only. You know, this is from an investing standpoint as a trading standpoint, I'm looking, you know, at different, you know, what was strong last week, what stocks wanted to go higher in the last week?

What is, you know, really looking like it's holding up well, because those stocks, actually the ones that could usually continue to hold up well, so you got to look at individual charts and you find some different opportunities. I mean, Alibaba has not breached. So it was good news. You know, we can say how weak the stock has been horribly weak, but I mean, it bounced right where it was supposed to bounce.

1 50, 2 80 August 23rd, 1 53 67, your 1 54 this morning. I mean, you could take a flyer on that. Stock yourself out for a buck and a half year. Joel, if you say the lower, the move is going to hold, I played when that way last week I didn't hold it long through it, but you know, it did have a nice trade overnight.

And the thing, because it didn't breach the low 82 55, it's going to do it to you today. Uh, but you know, there's opportunities, there's different opportunities, uh, in the market. You've just got to have the setups, but this is a little bit of a tougher setup. It's like people are licking their chops, what to buy.

But again, on the first day I might not be doing as much buying as I might be. If it doesn't make a new low tomorrow, because right now I don't know how ugly it can get. There's an unknown. There there's a lot of money to be made on these days. If we just bounce it all the way back and we might, but if we turn into the Dow down 1000 type of day, I'm going to lose money on that.

So I'm probably going to play it safer today, even though your gut instinct says, oh, I got to buy here. Cause I'm going to make a lot of money. I look at it as like, I don't know how to control the risk here. I need a wash out day and then analyze after that. So I'm not just necessarily coming in and hard buying the dip today.

Yeah. And also, I mean, Spencer, you're coming at this, you know, some, there's so many different perspectives that you can bring in here, here, you know, if you're a day trader coming in long, right. Expecting the normal market activity while, you know, what was your, what was your plan on Friday? You know, what was your exit point on Friday, you know, based on Monday's information or your own information, uh, you know, if you come in, in short.

Well, it's a different story. I mean, you know, you've seen what's happened with, you know, when you've tried to hold onto your shorts too long in this market, uh, from, just from a daily perspective, uh, you know, look at your prior your, your prior days, lows from Friday, if you're looking for a gap fill, see if they get back up to that area, because sometimes they do, or sometimes some of these stocks are lazy and they just open up, you know, if there's not a heavily traded stock that you're in, maybe there's some, you know, latent bids in there and you can get some decent prices off the open.

I think once the open starts, if you start second guessing your decision. So that's for a lot of people, I would just say. If you're long and you've been doing this for awhile, take your loss, move on. Reevaluate. If you short, you're hitting a target, covering your target or bring your stop down. I mean, there's a lot of different things.

If you're a young kid, like you, you don't Spencer and mention other investing people and you're, you know, this, I won't say today's per se a buying opportunity, but you know, you have to put your assets in the market when you deem appropriate. For me, I'm the heavy cash I'm staying cash until maybe 2030 or two.

Yeah. It tells you that was the 30. But again, you know, if you're young, you can take more risks here too, but it's this necessary. I'm going to tell you right now, stocks are not. It's why I raised up. We've just had such a ridiculous run and we're priced for perfection across the board. Nothing is cheap.

Like we were two, we had this conversation four months ago when I was moving to cash and it was the wrong move, dead, wrong. I was dead wrong to move to cash three, four months ago, but I haven't went back in because I just keep looking at it. This is my long-term investment portfolio. Like I said, my art, my RRSP, they call them candidates 40% cash.

It's only. Is to invest. Its only job is to long-term invest. It doesn't do anything else. It's not money I'm taking to build my house. It's not any of that. Its only job is to invest. And I don't like the values right now. I don't think there, there is some value in there. Yes. I'm long, a lot of general motors, you know, which hasn't been great.

I w was good at one time. It's come all the way back down to where I bought it, but I just don't see anything super cheap. And that's why I'm not overly invested in a lot of my RSP is index, but on let's look and I'm like, we've had such a loo. I mean, we are priced just for perfection and it's the type of environment we're in.

You know, we have these NFTs, you know, you go by Brady NFTE. It's like $23,000. I mean the money out there, there's just a lot of. Just chasing any type of asset that they even demon acid. I'm not even sure if these pictures on the internet, the NFTs are assets. We haven't, I haven't even totally decided that myself yet.

Um, and I've been on the fence and I can kind of understand this, you know, the scarcity or, you know, or a picture of a rock sell for a million dollars is pure stupidity. So there's pure. And this is, this is my opinion. I don't think the rock, maybe it's somebody already sold for 2 million. I don't know. I don't follow it, but you know, it's a hot potato eventually that Rock's going to drop like a rock, Dennis, Dennis, the rock has old news, man.

The rock is like, so two weeks ago, there is now. I don't know, just something else. There's so many people just, you know, and I've said this and I've went on record saying this. There was somebody just tweeted, um, about 20, 21. And they'll say, well, look at 2021 and see what a great opportunity this was to invest in 20, 41, 20 years from now.

I think that person is. I think everything is very overvalued right now. And I honestly think we could go into a three or four or five-year market period where we need to let the companies catch up to the valuation apples against itself. When is apple in this expensive talking? It's my book. I own apple, but I mean, it's not that much as chief Spencer's laughing, he says the market only goes up.

Right. It's not what I'm saying. It's not what I'm thinking. What are you thinking? I I'm thinking of. And it's hard to explain. I'm thinking, I I'm thinking that everything you're saying it makes sense logically, but we've, it's been wrong up to this point. Oh yeah. Yeah. So, I mean, th there's no doubt. Like I said, I moved to, I'd already said it and I was wrong.

Four months ago, I went to cash, stupid, stupid, dumb move. You know what the market went up after that, but I'm still looking at it and saying, am I wrong? Or am I just early? So, I mean, I'm not coming in here and just loading up and going on merging because stocks aren't cheap, but am I buying the dip to dancing stocks?

Yeah. But I'll be selling short other stocks against it to hedge myself too. So I like general motors. I'm on the record saying, I think GM is cheap, but you know what? Cheap stocks have gotten cheaper environment paid off. The other thing I'm thinking of like advisor here, Pfizer's a stock and we got news and let's segue to that.

There's good news from that 20% buys off almost 20% from the high. I'm logging Pfizer. I might add to it up here. My cost based on Pfizer is $13. I hate adding cause then he bring up your cost basis so much, but I mean, down in the low forties, I'm fives is a good buy. So there's some opportunities here where some stocks are cheap, but if you just coming in any random stock, Kathy, Woodstown saying growth, is there, I mean, it's been a tougher environment.

I mean, R K K's highs back in February 150, $2 or 159. It's 117. This is 20, 21 has been terrible for high growth investors. You know, we've had moments where it's looked okay, but it hasn't been good. So does the market turn back to high growth maybe, but those valuations are crazy on those docs. Okay. On the Pfizer, there was actually two headlines.

If you missed it from Friday, And FDA panel voted pretty decisively against approving a booster, approving the Pfizer BioNTech booster shot, uh, except for people with high w that are a high risk. So anybody who's at a high risk for COVID they are FDA said, yeah, you can get it. You should get a booster, but no one else you're going to boost it right now.

That was on Friday. This morning, we have new data from Pfizer BioNTech uh, on their study with children. They said children ages five to 11, their vaccine was safe and effective. Uh, they also said that we could get data for children younger than five. Before the end of the year that they were born totally committed on that front, but they said maybe, but as soon as the end of the year, uh, regardless for now, children ages five to 11 Pfizer, BioNTech say their phase two, three study showed that their vaccine was safe in, in children ages five to 11.

So what's next now is, um, inev inevitable FDA approval of the vaccine for kids five to 11. And then when we get the data for kids younger than five, we'll go from there. But that's the news on Pfizer this morning. And that's good news for the overall market. Do we see more of a reopening trade? Come back from that?

Potentially the reopening stocks have had the shit kicked out of them. I'm going to swear. They have, this has been an ugly trade for a long time. We know the casinos and the airlines have gotten ugly. Um, there has been some pockets of strength. Disney has been a pocket of strength, cause it seems like, you know, heads that wins tails.

It wins because they got the Disney plus. Um, you know, it does reopening traits there to, you know, catch on from the Pfizer. Does it, do we have a sneaky reopening by her this morning? I'd lean to those stocks with that news, because that news just getting thrown out baby with the bath water here this morning, but it's good news, you know, because that efficiency that, that gets people like me, that maybe you're staying home still and being a little bit more cautious because I have unvaccinated children, those kids get backstage and I'm like, I can start to be a little bit, you know, do a little bit more of my normal stuff because now my kids are a little bit safer.

So there is that mentality out there. I know there's people anti-vax don't believe any of that. That's fine. They're going to have their opinions. I'm of the opinion that, because I'm vaccinated, I'm somewhat safer because my kids are not vaccinated that then I don't want to risk them. So I try, I am more conservative in what I do.

I would not eat inside a restaurant right now. I would not do it. That's me. I would not do it because I don't want to risk me bringing home the virus, even though I did get sick and giving it to my kids. So, but you know, what, if they get back safe, I might start eating in restaurants again, because they got a little bit of protection, so that can help.

So that's the mentality I'm trying to give you, you know, and thinking that we could have a sneaky, reopening trade show up here again. Cause those stocks, actually, some of them are. Um, boy, a boy pre-market low 42 92. That was about six, 15, got a little off here. Lot of red candles on the daily. Uh, we got a monthly level of contend with today and it looks like we're, uh, we're at there right now.

So I would love to see this show, some support for at least for a day or two. And it's 43 and a quarter area that was a low for last month. Uh, this month. So far 43 31. We are trading below that I'd like to see for me a little bit cheaper. I am long. I think my cost basis bought this a little bit late. I think it's right around here.

And didn't extinguish it on that crazy rally because it's a longer term hold. 42 and a half to 43. It looks like more of like an, the next area. You had three lows in the 42 and a half area. So if you want to lean on that for a swing trade part system, there's a lot of pressure on us. I at least like to see like a lower consolidation than one or two updates in a row.

It's just so many red bars here. So first things first pre-market law is at, uh, 42 92. And, uh, for me, the extra major supports at the 42 60 area. Do you know the absolute last thing? Any Chinese stock needs, right? Yeah. I'll tell you it's literally any other bad headline, literally anything else. And that is, that's what Lee auto is getting this morning.

It's gotten there, this Lee's down. It's got nothing really to do. We'll all try and is down. And the Lee is just pouring a little bit of gas on the fire this morning. Cause they said, oh yeah, we're having some, um, supply chain problems and some chip problems. So we're going to lower our Q3 delivery outlook by two to 5%.

Um, and so literally any other bad headline is like pouring grease on the gasoline on this fire right now because, uh, China's got enough going on as it is, right. They lowered from 10 to eight, you know, you're not far off now. You are far off. They lowered their guidance. Uh, originally they were supposed to deliver between 25 and 26,000 cars.

It this quarter, they said we were going to deliver somewhere in the 24,000, uh, range. There was such a bubble in.

I think the Fisker and I I've been punished for having it. It's probably as a bad call. I like it. Cause they have the magnet deal and I do believe there's going to be some Fiskars out there, but all these Evie plays are garbage. A lot of them are just junk. Like, that's my opinion. Obviously, you know, some are going to work out, but I'm going to Italian.

Like 90% of these are not St. Leo's the one, I don't know, the auto, maybe they're making cars, so it's good. But is this like, you know, in your time with 25,000 cars, how many does GM make in a quarter is Ford making it? They mistakenly make 20, they made 25,000 cars. They don't even know, but they don't even count.

It. It's like a ticket. It's like a rounding error for them. It's a rounding error. So I don't know, you know, I'm long GM I'm long forward. Um, other than that I D and Fisker, which is probably, you know, my speculative Evie play speculative. For sure. If it's good to go to zero don't kid yourself a cut. I don't think it is one long.

It, I think it's going to be one. That's going to be one of the S of the, of the stocks, but there's so many. I mean, you know, we've known what we know what ride's done, but there is just, what is there like 50 of these companies, there's gotta be close to 50 at this point. There's not going to be 50, that are all, and the pie is not that big.

So you got everybody trying to eat this pie, but there's just not enough pie for everyone. So let me five for pie for maybe, you know, we know GM and Ford and Tesla are going to be in the pie, but then it's a matter of how much of these speculative play is going to get of the remaining pie and which ones, which companies are it's going to be.

It's kind of a crap shoot, really. So it'll be interesting to see I'm not buying any of these other companies though. Um, these small ones is because I can't figure out how to value. Yeah. Yeah. But at the same time, this is like the one area of China that's like held up relatively Neil. Neil's done. Okay. I mean, it's 35 from 55, but it's held up.

Okay. I mean, it was seven bucks back a year and a half. I know. I know. I know. Anyway, so yeah, the 20 sevens, if you feel like you really have to take it, you know, try and buy the dip on, on this one. They're pair lows at 27, maybe hold up today. Uh, the recent low, the move has been under that, uh, at, uh, 26, 22, but, uh, that's, you'd look at it.

If you're, if you're hoping for a bounce on this thing, 28, get your orders out there near 28, 40, 28 50, the bomber yesterday's range was 28 59 spoos are just that. It's just offered. It's all. There is folks support. Give us a level here. Let's take it back.

Where's the next major? I have a, I have a daily low at 43, 39, 75. That's a daily level. That's what I had to adjust after they took out my 60 to 75 low. I don't have anything lower than 43, 34 with your sheets here, August 19th. And I already had to read just one. So I'm not going to, I'm not going to readjust again and spy we're significantly below that.

That's a beautiful thing that you don't have to adjust your futures for your spy for 33 66. It's three points below that low. If I'm just looking at the spy and I don't look at the futures at all, because it's by so much easier to read straight down this morning. Yeah. You think 43. So you think for a third.

I think we're going to bounce. I think when he Dow gets down a thousand points, if it gets down a thousand points, it's always a natural bounce there. We've seen this last year during the COVID crisis. It wants to bounce when you get down a thousand

and that's, and then it gets a little relief. Cause everybody's always, yeah, well, that's it. So we're down 700 of the Dow. If I was buying the dip today, I think I'd wait till we're down a thousand. I think we could have down a thousand a day. And then I think we could bounce a little bit. So maybe there's a little faster, some point we're so over bought.

I mean, still, like we can say that, but stocks are just not cheap. If we were in this environment where everything's dirt cheap. And like I said, I think GM and Ford are cheap. That's why, if I was buying stocks, I didn't own GM and Ford. I already own them. I probably buy those. You know, here's GM been holding up very well last week.

Now, down two bucks in the free market here. I think it's an opportunity. I don't think, I don't think this chip shortage is a long-term issue either. I mean, they've punished a lot of these stocks because, okay, well they're missing guidance because they don't have the chips, but eventually they're going to figure that out too demand is not a problem here.

I don't think demand is a problem for the automakers, a quick PSA courtesy of Jay woods, who will be on our show later this week. He's an, he's a nice nicey floor director. If anyone's forgotten. Um, I'm just gonna throw it out there. Limit down is 7%. So we are a ways away from that. We are not even close.

We're not in this. We're not back in the COVID. I don't know if we're going down to 3000 PowerPoints here and I there's the mentality here. Like I said, now that's 300 Dow points down from here. I'll probably try to nibble in this. Have your list, have the stocks you want, but if you're buying stocks that are trading 25 times sale, I mean, those stocks can get hit a lot more.

I would just say there is some portion of the percentage of the dialogue today on online on Twitter. That it's a little bit like tongue in cheek and I'm a little bit timeless because it's like, and as Joel said this the other week, I think it was like, it's been like the easiest year, like arguably like ever, like not with, but in terms of the overall market, not in terms of like gross eyes, but like UBS and P like, it shouldn't be a term of spa.

Not even sure. I had some 10% correct. We just had two straight down weeks for the third time all year, which is insane that, that tight, that that's even a thing. Right. So it never should be that easy. So there is, there is a. So not all like the freakout is like genuine, cause there's everyone knows that we're due for a correction.

We've been saying that for a while. So, um, that's just keep that in mind real fast. I want to mention, uh, before we bring Tim Costa on, um, and we talk about this all the time, but in the warranty market of pending murder correction here for a month, at least that's where he has. We'll ask him about that.

But before we get into my 20 mentioned, smile, direct club, please don't chase this today, everyone. Okay. This thing got to 8 24 this morning. We're already down. We're more than a buck. Uh, it is the most mentioned stock on wash your best today. Um, and I think also on Friday as well. So just DC, just it's one of the few stocks in the green this morning, but just please, please, please, please be careful.

It's already, it's already down a dollar from, from the high you do what you want. I mean, this is all just, you know, trading and we know wall street bats can drive stocks. But like I was saying last week, it seems like when you look at these stocks, the really high mentioned stock. You look at it three months later, they seem to be maybe a selective perception on my part, but they always seem to go down afterwards.

Like they seem to, you know, the buzz starts to subside after a few days and they start to leak. What was the one we were talking about last week, you know, like, or two weeks ago, what was it? R S. Oh SRP. No, SPRT isn't even stocking. What the hell is it turned to? Uh, G well, anyways, I went to like, from two to like 68, they did that acquisition, uh, iron net to the right iron it, what?

That one do. Yeah. Look at iron net here. So I went from 10 up to 47. That's a quick correction down 28. Well, I don't trade the stuff. I don't like losing 40% of my money in three hours. I mean, I'm just not my style. So I'm about protecting capital. I don't know how to do it. What I put, you know, can you speculate on some of that stuff like that, but am I going all in, on merging on iron net or.

SmileDirect. No. Alright. It is 8 36 on a Monday, which means, you know what, it's time for

Tim Quass founder and CEO of market structure edge, and Tim, to your credit, you have been, um, you you've been doing not supposed to do right. I've been right. You've been saying that the market is, is going to go down for, I'm not quite sure how, not that long but long enough. Right. Well, and I, and I, and I said that the, the worst day of September would be September 20.

This is the day that would be the, the linchpin for the markets would be September 20. Uh, and there's a reason we could talk about that. Uh, but, uh, I appreciate you pointing that out. I, I wrote to yesterday to the, the edge users, the notes. But I said. If today's a doozy, then, then we have more trouble ahead.

This will be, uh, the fulcrum of what happens to the market. So now everybody will cast about, for a reason, I would remind everyone, however, you know, as we look at the steep drop in the, in the futures of what, uh, uh, Marcus Tulia, Cicero said, uh, he said, you know, if you, if you got, if you have a garden, this always comes to mind, right?

If you have a library in a garden, you have everything. So there you go, you know, just kind of puts things in perspective, uh, if the market's way off. All right. All right. What is, what is the reason in your view? Okay, so let's make sure that, that everybody understands that we consider, you know, that we all read and we, you know, we listen to the various perspectives on what might cause this.

And of course, the thing everybody has fixated on is this, uh, the financial troubles of evergreen real estate out of China because of its, uh, its indebtedness to over 300 billion in debt. Uh, but if you could compare that to the United States right there, why not pick that? There was a big fed meeting, uh, coming up on the, on the 22nd on Wednesday.

Could be that. So everybody will cast about for reasons. Uh, and, and we let's first talk about the cause. Uh, th then we can talk about what reasons contribute to that. The reason today is a difficult day is because today new options trade. So if the, if money doesn't show up at the same level, To recommit to three particular things hedges.

If you're trading global macro like Bridgewater, or what have you, the big hedge funds, uh, now too, if you're a passive money or indexes and you don't use the same level of substitutes that you did before, uh, that's going to be an issue. Number three, if you trade options and futures and you just decide, eh, you know, I'm just going to not do as much as I did all three of those things contribute.

To the money showing up on, uh, or, uh, a, an array, a buffet of derivatives laid out on the 20th and people don't show up for it. So then everything goes on sale. It's not like in some ways it's not more complicated than that, but you need to understand that almost 20% of market volume rests on derivatives.

It's very much like let's use an analogy so that you can understand this traders. So as real estate prices keep going up and people are willing to pay more and more for houses, then more houses come on the market at higher and higher prices. And then there's a point a nexus where that's stuff. And by the way, it's stopping all over the country here in, in Steamboat Springs, we're finally seeing price cuts.

We're seeing it in Denver, uh, seeing it in Texas, all the there it's happening. And so what happens is the thing that you valued a month ago at, at, at this level, you now value it at this level minus 10? Well, the same thing happens to the equity market with derivatives. Derivatives are a right, but not an obligation to do something in the future.

Derivatives are implied supply and demand. So if nobody shows up to consume that supply, Then that supply is marked to zero and it comes out of market cap. And that's why these periods around derivatives explorations are so important. It's why I like to take my money out of the market and walk around to the other side, which I've been encouraging of, which I did myself.

I that's what I do. I want to avoid these periods because the prudence foresee evil and hide themselves. Now, why, why is there less demand for derivatives? That's the big question? Well, pick a thing. It's one of the first day though. Well, that's, what's crucial. So if you're in the business of moving large quantities of wholesale supply, relative to options and futures, and there are banks that do this.

Then this is a very important day for you. This is the day when you furnish to the market, that thing that you expected to consume at a roughly equivalent rate to what it did back in June. And I looked at all the associated data. So I looked at the composition of the market in June when the options expired the last time and where they are now.

And you would arrive at the conclusion if you're in that business, that we're going to have roughly the same amount of demand. Was there any indication in the data that we might not? Well, yes, there was, there was active selling last. Interestingly active money was a seller and during options or during index rebalances, we had good volume volume for the three days in, uh, the three days of expiration.

So Wednesday, Thursday, Friday, Friday was the rebalance in spy, which is a great proxy, was about 270 million shares. Go back and look at it in June. Same time period, almost identical. So if you were, if you were, uh, projecting what the demand might be, you would arrive at the conclusion that it could be very similar.

There, there are only two big differences. Number one, short volume is significantly higher this time. So short vine, miss supply support volume in the overall market. Yes. Short volume is over 46% of the S and P 500. Right now that is almost half of all trading volume is coming from borrowed stock. So if you have a lot of suppliers.

And then the other big difference is what we call internally. We say there are no purple bars, purple bars for us, or evidence of counter parties who are going to consume a significant part of that supply of derivatives. Well, the, instead we saw active selling. So if you have active selling, you don't have the derivative traders showing up and you have higher supply.

What might the market do? It could go down. So now how would we know that that might happen? Well, I'll show you how we think about this and you don't have to know all that stuff, traders, because we do, we, weren't going to know that stuff, you know, our job is to make sure that you know, those things. And so we'll tell you if this is what the data indicates.

So I've gone to market structure edge. This is 2.0, by the way, we've now beta launched a version 2.0 of edge. So I'm going to hit broad market sentiment and just look up. This is this by itself, should tell us what the trouble is. So here is sentiment and it peaked right here. So that, that peak is the 7th of September.

That's the point at that point heading into when the market is down into options, expirations, it may be up the other side, but we're not out of it until we get to Wednesday. So why Wednesday? Because there are options that expire. So all the books have to be accounted for there. The debits and credits associated with the derivatives trading and people.

Don't talk about it enough that CNBC was actually talking about it this past week. Uh, but again, I'll say it's almost 20% of market cap. Okay. Then you have new options trading today. Parties will square the books on those tomorrow. And if opportunists are in the market, the market will go up 600 points tomorrow.

I'm not saying it will, but that's where the, that will get the ledger will get squared. And then Wednesday, we will return to reality. And we'll have an idea of where the market actually is. So if this line bottoms by Wednesday, I'd say, okay, we're good. If it's still falling and broad market supply is rising, then we have more trouble.

And you remember, this is what I said a week ago. I said, if we have a bad day Monday, then the market could take a big leg further down. We'll see. But okay. Also, so I know this is one of your bag, but, but Wednesday is, is when we're going to get the latest fed meeting is they're going to, you know, announce whatever they talked about, the dot plot, whatever.

Right. Couldn't that shouldn't, couldn't that also throw a wrench in. You know, the data you're looking at because it may change expectations. It sure could. It absolutely could. And I, and there is a factor that we spend a lot of time looking at and it's because this factor, the DX, Y uh, it is the single most highly correlated input to market performance.

We track that. So we do all, you know, you put all kinds of inputs. It's the reason we come back to, to, uh, supply and demand in the market. We've determined. That is the biggest, the next thing below that is the dollar, the relative strength of the dollar plays an enormous role and how the market behaves. So if we look at the.

We're good. Thank you market watch for this data. So if you, if you look at the dollar it's trading at about 93 and a half now, which is getting very close to a year to date high, and so a strong dollar tends to depress the prices of risk assets, because a dollar, the dollar denominates risk assets, smaller denominator, larger price, larger denominator, smaller price.

So as this trends up, uh, then the risk to everything from stocks to real estate increases and oil energy has performed very well, but energy was a reflection of what happened between options expirations in August and present the dollar decline. We'll we'll we'll have. Energy stocks were the best performing asset class in the sector in among equities.

But now that trend has reversed and that input will be fed into derivatives and look at what's the worst performers today, a patchy, uh, Occidental, all these things have given up all of their gains of the month, at least now pre-market and there's a, there's a cause. So, and, and to your point, Spencer, I think you make a very good point and astute one, and you should, maybe you should listen to Spencer, everybody and wait to see what the fed does.

I think the fed is going to look at this and be, be very dovish because they don't want these things to fall apart, but you never know. You never know. So it's a good reason. Okay. So the takeaway here is going to be watching a demand for derivatives today, tomorrow, Wednesday. Uh, and also keeping an eye on whenever the fed says, or doesn't say with regards to a timeline, as far as when they could potentially taper and all that good stuff, because we noticed, we know what's on their minds, but we still don't know when it's going to start.

The fed is market dependent and not data dependent. And if the market continues to go down, they will do their best to defend this market. And that tapering talk will quiet in a hurry. So you have to, sometimes the market fixes the whole feds issue and the fed is stuck really stuck in a hard place here because they know.

Deep down that inflation seems to be a little more sticky in a lot of areas than they'd like it to be, but they can't come out and flat out say we've got an inflation issue because then they have no excuse. They need to raise rates. And they know if they raise rates, the house of cards starts crumbling, tumbling down.

So it's difficult as a fed official. You're trying to, just to manage it, manage the expectations of, you know, yeah. Maybe we're going to raise rates here, but we know if we really start to really Jack them up, that every, the whole world is built on debt and everything comes tumbling down. So I mean, how, when you look at this, Tim and you look at the market selling off, and maybe we're worried about interest rates going higher, isn't the fed putt here to a certain extent, for lack of a better word, kind of like, you know, a possibility that this market just, you know, eventually finds a bottom just because they know the market participants know the Fed's got the markets.

Well, if it's, uh, we'll find out

well it's, I love these pithy little aphorisms, but again, it reminds me of, of I've used this before, uh, herb Stein's law. So it's called Stein's law. That's what it's known, uh, as in economics. And so herb Stein, for those of you who are younger is the father of Ben Stein, well-known economist and a writer.

And so he famously, he famously said, if something cannot last forever, have you have a, got you guys, ha something cannot last forever. It will stop. And so to your point, Dennis, that the, the fed is in a very difficult position because while it's supposed to be independent, uh, it is, it is heavily, uh, indebted to.

Uh, supporting the economic policies of whoever is in charge at the time. And nobody wants a market's falling apart. There was just no question about that from a trading standpoint, traders, what do you do with that? Well, it, and this is, this will be a little self-serving, but it's, I, I'm telling you from having done this for 20 years now and use this data in front of us for a dozen.

These, these they're not perfect, but they do reflect well, all of the inputs instead of having to wonder, well, what are the hedge funds doing? What are the macro economists thinking? Uh, what about monetary policy? Uh, what about things in China? Uh, how about economic growth? What about the supply of oil? All of these things are inputs that all manifest in this little green line called sentiment.

It's measuring all of those. And so this here, look at this. This has been an issue. And I've talked about this before. This issue started in a. Th in April, we ceased to have a momentum style stock market. It doesn't mean that the consequence arrives right away. So whatever the fed does today will have a consequence in the future.

What the fed has already done is playing out now in the equity. And so when the policies began to slow, the input of money into the market in excess fashion began to slow. And we can look at the fed balance sheet every, every week I do. And while it continues to rise, the rate is slowing, right? The rates slowing well, this started back here.

So while the market has continued to rise, this is inertia, the continuation of something that has been set in motion, but inertia will slow at some point. And this thing's already telling us, right. It's already telling us, I just, uh, I just want it to happen here with one thing. I mean, we're, you know, we're talking about the old thing here and we're talking about, you know, maybe what the fed does, but you know, we know institutional money is what moves these markets, right?

Correct. Uh, don't you, I mean, just, I, I got a monthly chart up here in the spine, right. And that, you know, the move that we've had, you know, discounting even what, you know, the March low, maybe that was a, you know, an artificial low, but even in the activity that we've had in 2021, you're coming up to an end of the quarter here.

Don't you think with everything that's going on with, uh, whatever the macro, whatever the earnings whatever's going on with COVID that I think the big, you know, big money is going to be looking much more to sell the rep in this, of, in this market or, or. Then they are just, cause we're always constantly programmed by the dip, buy the dip.

We're going back to new all time highs. I mean, why can't, uh, you know, the spider go down to 400 or three 50 or 300. I mean, we've had all these sayings. Don't you think that the, and I don't know how you gauge this, but I don't think the institutional money, I mean, you're going to have the overshoots on the downside to everything, but I think now you're far away from like the old time high.

Now you're coming up to the end of the quarter. I think, I think you have to readjust your thinking. So we got the end of the quarter. Friday's a trading day and I believe we get it to the end of next month, but you know, what do you use written indication that, Hey, we're just not buying the dip anymore and we're just, we're just sound the ribs.

Or if we have to sell in the weakness, we're selling the weakness. So this I'll, I'll dovetail the two. It's a very good question, Joel. And it's the great, it's the great existential question for all of us, with exposure to the equity market. I'll note that our prognostications about the effect of what we call risk management derivatives plays out.

So now let me add another piece to this. What, what you're describing is true for about 9% of trading volume. There are, there are investors who are doing those kinds of things, but they are not the predominant money in the market. There is an Achilles heel to the predominant money in the market. The single largest form of institutional asset management is large cap blend that is there.

Those are stocks in the Russell. 1000 that are broke. Both can be both growth and value, which by the way, is. It's Facebook. Those are blend. They could be growth stocks. They could be provide the support for growth ETFs. They can be value stocks and support, provide support for value ETFs, but that is fully one-third of all assets under management.

And that money wants to track a benchmark. It wants to be the S P Y let's say so here's the trouble as spy deteriorates that money has no choice, but to adjust to it. And that w that is what creates snowballing effects. It's not that money doesn't buy dips. The, the money that buys dips is merely excess capital and stock pickers.

Like Ron Baron, Ron Baron is going to, you know, the Baron funds. He's a classic value investor. All the value investors will do what you've described, but they're overwhelmed. Today bias three to one in terms of volume in the markets by money tracking a benchmark, if the benchmark deteriorates. So must the money associated with it.

If energy is 3% of a, of an index and it loses a half a percent of value, half a percent comes out of the. If the things are 25%, I'm adding pluses in there and the fangs drop 5%. Half of that, 5% of the money comes out. That's how you get a snowballing. And this is the double-edged sword of index fund, but that's the fact, that's the way things go at Tim Costa.

Everyone, you can learn more about his site, market structure, edge.com. You can see his notes and his research and his data there. Tim, always a pleasure to talk to you again, Monday. Uh, it is 8 56. We got four minutes left before I'm going to talk IPO's with Manhattan and they was a big week for IPO. So did we miss anything?

Joel, Dennis chat. What else have we gotten to today? Cause I mean, well, let's do three minutes ticker time. Give us your time. So drop those tickers. Okay. I just haven't talked square on the show for probably a few weeks here. It's pulling back. People are looking at the natural dip and looking for the growth stocks, you know, down 10 bucks, 4% down 4%, I would say, as long as it holds the lower than move, which is 2 37 91, there was a washout low with an ugly candle back on the 13th.

That's the level that I think square needs to hold before that Joel might jump into this 2 45 area, which has some nice support. So there's a couple levels there too. So if you're so inclined to buy the dip and you need to buy the difference up there is, you know, the opportunity that the trend is still in tact here.

What I will warn you is that Square's a very expensive. And if we decide to go into a corrective environment where the market starts to lose 10%, um, square, we'll get hit really, really hard. So am I buying this dip on today on square? No. As a trade. Um, if I was doing it, I'm, it'd be a quick one and I'd probably use the 2 45 0 7, actually low from the 15th to stop myself out.

If I was buying it like right now at 2 45, 70 risk and maybe 80 cents, it's a tough one. And then, you know, you can always look at the imbalance too, which is 43,000 sell, showing an opening indication of 244 75. So it's looking a little weaker from where it's trading right now. Uh, yeah, I mean, I'll give you the, uh, um, You know, you could give their support and potential by areas.

I'd say just I'm someone that's looking at this. I don't know how to day trade or longer term. I mean, in the two 50 handle, you know, maybe not today or tomorrow, but I'd call it two 50 to two fifty, two thirty eight, fifty two thirty eight was low on Friday. That's major resistance. So I be a seller at any kind of repair, not selling in the whole.

Oh, so look at this monthly chart. I mean, you took out last months low, right? I mean, are you really, are you really stepping in here? You've taken out last month, low by nine bucks and now it looks like, uh, you know, maybe you're going for more. So really the only good number I see there is will you look at that bottom rate shirt to Joel?

He make a good point. I mean, we're 50 bucks back during COVID and yes, squares operate, but you know, they're talking about stocks up 400% in just over a year. So you're, you're you're in three months. I mean, there's some people sitting on some huge gains in this thing. Is it logical at all? Stocks go up 400% a year.

Is it going up another 400% next year? Probably not as easy. So is there a profit taking as a potential for this to see 200? Again, it could happen again. Remember Square's also a crypto play to a certain extent, very small portion of it, but it gets a little bit hit harder here because crypto's down today.

Uh, let's do one more quick. Nike are financed by Nike. They report earnings on Thursday. This chart is very interesting.

I mean, they watch someone just wants out ahead of their report here. I mean, that's, that's all there is dragging on the, those of the free market session. I don't know parallels if you're looking for however, already below that there are, well, there were a parallels at the 53 60 area potential support, uh, bombing of the range from yesterday or Friday, you could very see resistance 1 56.

All right. It is no more, one more, one more, one more. Oh my gosh. Okay. Let's do blah, blah, blah, blah, blah. Some of it's not grabbing a 3m 3m. Want to find some different that stocks has been the hits. So. I mean, this is a, this is also margins getting squeezed because of inflation. So we know that that's a known issue for a lot of companies who right now inflation's an issue for 3m as well, lower the move 1 79 41, which was Friday.

We're taking that out. When stocks are making new lows, I always say you got to go. I don't like it because it's breaking new low. You got a chance of the gapfill there and look at their resistance, you know, 79, 41. If it gets anywhere near unchanged, that would be a gift. But, um, I'm the monthly Sierra, since you've taken out last month, low by a wide margin, I'd say if you're looking to buy the dip in this one, maybe wait for the 1 74 area, uh, that was your February and March Lowe's.

So we'll hop over to pre-market prep and cover all these symbols that we missed. And does Spencer I'll check in with you later? Checking with you later, Joel, same to you, Dennis guys, once again, let us know what you thought of the new, uh, graphics today. We, we are, we're not very good at sticking to a plan on this show.

Uh, everyday I come to the show with a plan and every day, Joel, and then it's like, take my plan. They just toss it out the window. Uh, but we stuck to it today. So, uh, give us credit for that. Uh, and, and let us know what you think. Um, share your thoughts in the chat. She was an email shows that fans are going to come.

Let's bring on Matt and guys. It is, it was a wild week, an IPO, and we had a very, very busy slate. We do have some more IPOs coming in this week. A lot to talk about. So let's get Matt on from IPO warriors, Manhattan. And good morning, sir. Uh, how was your week? I bet it was. Uh, yeah, I mean, you couldn't really ask for more, we'd had a long downtime in the IPO world, and then it just came back with a vengeance.

I mean, I didn't even really have time to check much else in my portfolio and was kind of shocked to come back to the kind of rest of the world and see, oh, the market's down. It's like, what kind of, not an IPO world. And we had nothing but wins. It was almost like everything you played, you were making money at to the point where I really, I think going into this week where we have another full slate and I think we have, you know, 12 or 13 IPOs this week, I need to kind of focus on just a few.

So I don't miss some of the ones that I really like locked in, but we can go through a little bit of last week real quick. And, um, and then, and then jump into next week. Cause uh, there was a lot to learn from last week. Um, the first thing I wanted to say was, uh, No, I did come up with something, you know, I'm always improving my rules and, uh, really distilling things into things that I can really take action.

And I've simplified things into two rules that we keep talking about now in the trading group. Uh, if you come over to our Reddit thread and I feel warriors we're live trading these every day, there's IPOs. And one of the things that constantly comes out is people saying, oh, I wish I'd taken pro you know, I wish I had stayed in longer.

No, but then they do that. And then they, you know, they miss out on when opportunities with these things drop just as fast as they go. So one of my first rules is take profits without regrets. And the reason I say without regrets is because it really is a bad habit to get into, to get out with the win and then say, oh, I should've stayed in longer because then you start pushing yourself further and further and further into these traits.

And then when they drop, they drop really hard. I mean, these things come back, you look at dusk brothers from last week, which we're not going to look at what happened after, but it made it to a high of 52 and then dropped all the way down to 43. And then you can say, oh, but I sold out at 44 on the way up.

It's like, it doesn't matter. You took huge profits. You took a 10 point win, you know, in one day. Uh, and you missed out on, on a little bit more. So what take profits without regrets? And it's a very strong discipline. The saying, uh, comparison is the thief of joy. If you can't be happy. Buying a stock, you know, getting a 10% winner.

Cause it also cause it, cause you missed the top. I buy buy $20 or whatever. If you can't be happy about that, then you're never going to be happy. Right. You're going to haul. Exactly. And it goes along with, uh, bulls, make money bears, make money and pigs get slaughtered. You know, the greeter you are, you're going to lose.

I mean, my biggest loss should have been a win and that was, um, Bumble and I just revenge traded it and uh, took what should have been a $5,000 win and turned it into a $10,000. So take your profits. Don't regret it, you know, learn to read, you know, what you could have maybe spotted or identified in the way that the stock was moving or what kind of strategies, maybe a little bit more room with your stop loss and maybe see where the level two orders are and see that kind of high bid pulling the stock further up.

Maybe try to see where you can take some expert pro profits on the next one, but don't put yourself into just the ingredients saying, oh, well I sold out too early last time. So that's the only reason I'm not going to hold, you know, sell for a profit on, you know, on the next one. So the second quick, the second rule is don't chase.

Once you've missed the trade, do not chase it because you're coming in at the higher price point. You know, entry to get into where you're going to take, uh, put yourself in a position to lose. Okay. I just want to fly through some of the last ones. I don't want to spend more than five minutes on this and that'll give us time to work on the next one, a dice therapeutics.

I don't play biotechs usually. And this is a great example of why, even though it opened it 30 peaked at around 40 on each of the, you know, the opening day, the second day, and the third day, if you look at the price movement here, this is almost impossible to play. Um, if you set any kind of stop-loss to protect your downside, once you're up, uh, you're going to get stopped out the volume, the spread, everything was so hard on this one that I look at this and go, yeah.

When opportunity. Sure. I missed it, but I'm okay with missing this one. This would have been very hard to play and you'll see why compared to the next one. Uh, this is one that I called out as I really liked this one. It was processed by a robot. Uh, low flow cert bio robotic surgery. Um, but given this was, you know, the first IPO we had the LA last week was sports radar.

It didn't do all that. Well. Uh, then we had T Y R N I think it was called, uh, it also bombed. And we just had, you know, we hadn't had a strong IPO debut for a long time. So I said, okay, if this goes up on the debut, I'm going to set a stop loss on my debut point. And that ended up stopping me out early, but I didn't lose any money.

And I'm okay with that. Even though I had a high conviction in this and I missed out on the opportunity to win here, I took my money back into my account. There were a lot of other IPO's that day, and I was able to put my money into some, you know, into some plays that were kind of safer plays. Um, when there's a lot of IPO's you want to focus, you know, don't be afraid of protecting the downside.

Uh, where you not losing money? I don't like to take stop losses where I would lose money, but once I'm up in a position, I will lock in a win or a non loss to avoid getting in a position where I'm stuck, especially when I want to use that money for plays that are kind of, you know, easier to play. The ones that go straight up off the debut are far easier to stay in than something that's bouncing around.

Uh, we also hadn't seen how strong the market was during this day. And as the day kind of progressed, my confidence in the IPO plays, uh, went up a definitive healthcare. This was a huge winner. I passed on this one simply because I didn't quite understand it. And it was the first IPO we really saw. Uh, of the session of this kind of slate of IPOs that went straight up and it started to build my confidence.

If you got in on the debut is 37 15, I think the IPO price on this was 24, 25. So it debuted at a significant premium. And since we hadn't seen anything really blow up yet, I have passed on this one, but it started by watching this one. It gave me the confidence to play, you know, the next ones. And this one, you had outs here.

If you want to play the initial spike, maybe take a third of your position out here. If you're trying to play this as a single day trade, maybe take out with a trailing stop loss around here. You get stopped out by this candle. Uh, if you had a lot of conviction in this, you're going to let it run for day two.

The opening day to dip on a huge run-up on day one is okay. Uh, you hold through that and then you either put in a trailing stop loss as a climbs here, or you say no, I really believe that this is going to hit 45 46. And if you had seen the other IPO. You know, had gone live on it on day one, you would have had a lot of confidence in these IPOs.

And if you liked this company to begin with, it's not unrealistic to think that maybe you stayed up through here at a stop loss or really went, you know, if you held any position beyond that, I think once you see a big number, like 50 coming up, it's a good time to take money there. But just another example of one, this is the kind of play that makes it so easy on you because when it goes up from 37 to 40, okay.

You put your stop-loss in at 38, sit back, get comfortable, you know, and focus on other trades. Dutch brothers was kind of the, the big surprise, I think, for a lot of people in the world, apparently. Yeah. And I, I, uh, got, so this is the one where I just got distracted. I had a stock, uh, entry order. It was originally showing at, uh, indicating a 29 on the bid 31 at the ask.

And I set my entry at 3 85. You know, we did get a little dip off the date. Uh, which would have caught. Cause I was trying to undercut by, you know, the ask by about, you know, 15 cents and I got caught watching other trades getting into other trades. And when they raised the ask to 33, I was literally in the middle of updating my order when this went live, once it jumped up, I didn't want to chase and uh, kind of kicked myself for missing it, but I took all the proceeds and put it into on and made money on that one.

So I can't kick myself too badly. But again, this is exactly what you mean. This is the dream set up. It just goes straight up. You're not taking any heat. You can set your stop loss. If you know, around here after, you know, you watch it go up, you can take profits at any of these points. Um, but you do want to be taking profits.

See, this is what I was talking about right here. If you got gradients, so no, it's going to go to 80 and it's not going to go to 80 right away without coming back a bit. And if you're in this for a quick trade, this is, you know, you take profits at major milestones. 40 is a major milestone. 45 is a major milestone.

Uh, 50th, certainly a time when I'd say, look, if I had anything left in this and it goes to from 32 to 50 and two days I'm taking profits out. And if you didn't, if you tried to catch this like one minute, when it jumped up on the very opening, you know, day 3 54, you know, you got hammered, he lost, uh, 12 points in about 30 minutes watching this thing come down, hoping it's going to come back.

And the feeling here, you get kind of desperate. You, you don't want to sell cause you're in your mind. You're like, oh, I could have had that. Maybe it'll come back and you hold. And then it comes down here and you're just like, Ugh. And then you panic sell down here. I might as well, just sold two days earlier and use that money in another IPO.

So take your profits. Don't regret it. Round numbers are important. Round numbers on prime numbers on these definitely important, uh, ThoughtWorks. This one kind of surprised me. I think it just kinda caught the trend of everything. You know, everything was rising in the IPO world, I believe. And I hope that we're seeing IPO's that are not debuting at a hundred percent premiums.

We're seeing like the strong, solid ones debut at, you know, 30% premier, 40 prints percent preview premium. And that gives us some room as retail traders to get in and experience a bit of the pop, a ThoughtWorks, I think caught that trend. It sort of opened up and drops, uh, came back up a little bit and it's just kind of bouncing around and then it felt like the market went, wait, IPO's are hot.

ThoughtWorks is an IPO today. Okay. And it just blasts. And then it carried that momentum. I think it was writing a lot of, um, a lot of the trend. I didn't have an, I was fully committed to on, on by this point. Um, but this one was, you know, did well. And when I start seeing all the IPOs do strongly, I'm going to start, you know, it gives me more confidence to, Hey, this, this trade is working.

I want to get in this, um, easy fill. This is a low float kind of Mimi pumped in the stock group. Uh, if you're gonna play these, you know, try to buy on the lower than the, the debut and just wait for that one pump, we've seen it on day one or day two, we get one big pump. And when it does that, if you want to play this, you're taking a big risk.

In my opinion, you know, by the dips, all the rip, uh, wait for day one or day two is when we've seen a lot of these. Take your money out and then forget about it. I don't think this is a strong company on, on this was the Michael Jordan ringing. The bell. Federer backed is an obvious day to run for me. Uh, I bought an on debut and just basically sat it out.

I didn't try to take profits here and play it out. I just said, look, I'm going to hold this today too. And I'm going to take, you know, at 38 50, I'm going to take my profits and then play the next one, which was my best win of the week. By the time Thursday rolled around for DRock was poised for a run. It was tack its identity.

Its cybersecurity has a pretty low float and it was just, you know, I took a very big position on the debut. Uh, let it ride for day two and then just started taking out, you know, took 1500 chairs, took 500 out here, 500 out. Uh, here, I got stopped out. I was protecting, you know, 500 on the downside here and then 500 on the way up here.

So we're in the 42 range. So that was an easy win now. Taking what we looked at last week. We're still seeing IPO's yeah, we have a full slate. I'm going to just completely skip through some of these. Um, we have a full slate of IPO's IPO's are still debuting it a little bit of a tentative premium, which is radio trading.

Uh, we have a day to run almost all of these are giving us day two runs where we'll have all the plays. So my strategy is to play as many as I can without taking a loss, stacking up five, 10% winds and rolling my winds into the next one. If somehow this week I can play four or five IPOs without taking a loss and taking a 10% win on each one or rare that will compound itself into a very large win total by the end of the week.

And when I looked back at my totals at the end of last week, even though I made some mistakes, I miss some opportunities. I still did incredibly. So the first one is AKA brands holding. I don't know much about this. This is a retail brand that, uh, you know, clothing for gen Z. They have a direct to consumer and mobile first model.

So low overhead. Uh, some of the brand names are princess Polly, culture, Kings pedal, and pup and Reb dolls. I guess princess Polly and culture Kings are the 90% of their, of their business. They have growing revenue, gross profits and gross margins are the three kind of, uh, things that we look for and revenue was up 166% in the first half of 2021 verse 2020 gross profit up 170%, 20, 21 and 2020, and a pretty low float.

So the financials are there. I don't know if the brand recognition is going to be there amongst traders. I mean, gen Z, I don't know how many of them are going to be buying, you know, stock. And I don't know how many of them will connect the dots between AKA brands holding and these brands that we're talking to.

But, um, I've missed out on some, you know, some strong retail debuts that are just not in my wheelhouse. I'm more focused on tech and growth socks. Like not, not necessarily in retail, but we saw a curve. We saw a few others that did really well off the IPO. So, um, this one might be worth dip in a dependent toe in the water, but there's a lot of IPOs on this date and the next state.

So I definitely don't want to get caught in anything. And I'm willing to miss, uh, or undercut to, uh, the entry to try to, you know, take quick profits and move on toast. The son that I want to know about this. I think there's a lot of interest in this because a lot of especially entrepreneurs are in the restaurant industry or aware of toast.

It gets a lot of comparison to square, even though the comparisons are a little bit, uh, maybe not completely aligned, but basically it's payment processing and point of sale for the restaurant industry. So a lot of restaurants are using this to charge your credit card for meals. Everybody pays for their car, you know, meals with credit cards.

And this system, this software as a service is specifically tailored for restaurants. Now they got hit really badly at the beginning of the pandemic because people stopped going to restaurants. There was locked down, uh, but they pivoted really quickly to launch services. Basically to allow restaurants to run their own, uh, delivery services and tie in with, you know, and decide step these, um, you know, uh, Instacart or Uber eats these kinds of things and do it themselves.

And we all know that restaurants don't really love the, uh, delivery food models that are these delivery services, because they take such an aggressive cut of their profits. Um, and it takes a big key of the dining experience out of their hands customers. Their food fast and hot. And if they're leaving it to some, someone else to handle it, you know, maybe they can do it more efficiently themselves and put those profits in their own pockets.

So toast did pretty well. Uh, despite the hit, they were still able to grow revenue 23% in the middle of COVID. Uh, they've had 104% growth in 2021, 2020. And the valuation of this IPO is actually coming in below what they had attempted to go public with in February, 2021, the float isn't that high. And I think a lot of people are very interested in this one.

Uh, I wouldn't be surprised I'm in, I've already seen other kind of, um, social, you know, social stock, people who own restaurants talking about this when I'm looking forward to it. So I believe this one's going to be hot. Uh, I want to keep an eye on it, but I do believe that this one is one worth playing, especially if we don't see a super high premium, but it's probably worth playing anyway, you have the right people interested in this and it has the right, uh, you know, certainly poised for reopening and, uh, continued lockdown.

So it's good. There's just a lot of other really good ones this week. Uh, FreshWorks is a CRM solution. They have 50,000 paying customers, uh, 11,000 customers paying over 5,000 a year, but they compete with Salesforce. It's pretty crowded market, despite that they are growing faster than a lot of their peers.

They got sales growth of 53%. The cashflow positive. This float is the only thing. That's a little bit kind of like given how many IPOs there are really want to find the ones that are most primed to, you know, to get a pump. And at 28.5 million shares, this one is like, I like it. I just, I'm going to be very tight with any kind of, uh, stop-losses cause there's so many later in the week that I don't want to have, you know, a big portion of my buying power tied up in anything.

And I'm not, you know, I would say I'm pretty, pretty high conviction, but not as high as some of the other things that are like this week, uh, Sterling check. This is background screening and monitoring. They are rebounding past, uh, in post lockdown. People are starting to hire again. They need to do background screening.

Uh, revenue is still up 43% in the six months ending June 30th, 2021 profit up 42% at the same period. The float is pretty low. Um, this is getting into September 23rd now. So, um, Sure. I'd have to check that one. Yeah. Uh, I'm not sure. I will have to kind of fill this out and if all the IPO's are doing well off the debut and the timing of this one in the, throughout the day, because they don't all go live at night.

None of them go live at nine 30. Some will go live at 10. Some will go live at 11. Some won't go live until 12 or even one. So there is an element of schedule that goes into these. And if I can't play them all, I'm not sure this is just screaming at me. Hey, don't miss this one. Um, but it does look pretty strong, not in development.

This one is interesting. I had no idea what they were, but they, they basically develop and produce products for the beauty personal care home care brands. Packaged consumer goods. And they do this for over a thousand brands and over 9,000 products. So 18 out of the largest consumer packaged goods companies use them as clients and they basically handle like the R and D formulation, packaging, design, production, regulation.

They kind of like produce the products that other brands then package and sell as their brand. And they have really good numbers. I mean, revenues up 96% year over year, gross profits up 119% year over year. Uh, the one thing that really kind of gives me the, uh, is the 55 50 7 million shares. I usually like IPOs that are under, you know, around or under 30 million shares.

50 million shares is a very large float for the retail. Uh, market to gobble up before we start seeing demand outpaced supply. So this would really require a bunch of industry, institutional investors, a lot of retail traders. A lot of people need to get in on this after it goes live for this to push the share price up.

So maybe this doesn't do badly and maybe this is a solid company. I'm just not sure we're going to see the kind of movement that I like to see in an IPA IPO debut to take profits a couple of minutes here. What else we got? Okay. We've got thorn health tech. This is personalized nutritional supplements on a subscription platform.

Uh, the profitable positive cashflow, net profit. Uh, they have free cashflow, strong revenues, strong profits, low float. So basically nutritional supplements. I don't know for me, it's kind of like, well, crowded space. I don't know about. Yeah, max engaged, smart. This is customer engagement. Software is taking market share from their competitors.

So they're rapidly growing and aggressively against companies like Salesforce. And, um, okay. The other one we saw earlier, fastest SAS Assassin's big SAS is big revenue of 58% profits of 61% swinging to net income positive and a pretty low float. This is the kind of play that kind of looked like it did pretty well last week.

And I sorta liked this one for this week. I probably will put it on the. Very likely to play list and, uh, keep an eye on that one. So most brands, these guys, uh, acquire food brands in, you know, products that they believe are going to be hot. Um, Michelangelo's, Rao's homemade Noosa, yogurt, Birch vendors. I'm not familiar with these brands.

I don't live in America though. So maybe that's why I revenue growth during lockdown. Sure. Profit of 28.6. That should be a percent, um, low float. Don't worry about it. I live in America. I'd never heard of those brands out there. So these guys make money. It's a, you know, it's a, it's a company that makes money great.

But is it really gonna stand out in the crowded market IPO market this week? If it does great, but I'm probably not going to play it. A brilliant earth group, ethically sourced jewelry, uh, that sold direct to consumer in showrooms targeted towards millennials and gen Z revenue up 78% profits of 94% net income and growing.

Uh, there is some random lawsuit on a on record that they basically say, look, this is garbage. Some customer said they recorded phone calls with the customer without alerting them. Um, it doesn't sound like anything, you know, critical to their business model, lowish float. Uh, I really don't know about this one.

It's interesting. Those are great financials. Uh, sure. I think that attitudes and jewelry are shifting. People are even open to kind of like lab grown diamonds and that kind of thing. Um, but not really, you know, trade what, you know, I don't know anything about this. I bought, you know, exactly one diamond in my life, you know, and that was to get.

The right to call Remitly this one's interesting, but it's crowded space. The send money, international money transfers. They compete with wide zoom and others wrote on a blow through this one. Uh, I'm going to send out a newsletter, uh, tonight with further details on all these. So sign up for the newsletter, IPO warriors.com.

There is one other one or two. I want to cover from, give me a minute here. Argo blockchain. This is an uplifting, it's a crypto miner. What's interesting about this is it's a low float being offered, but there's 456 million shares. Outstanding. However, a lot of times on these up listings, we don't see those initial shares be, or those kind of carry over shares being tradable right away.

It's also being offered on Robin hood, which is a 30 day lockup usually. So I've also noticed, uh, the price spike last week above the it's trading at a dollar 80 right now. Uh, the uplifting is a reverse split of 10 to one. So the fair market value should be a dollar, you know, 86. So why did it spike up?

Well, we saw this in FCU V about two weeks ago and what it appeared to be was the underwriter and the shareholders were buying up all the shares on the day of the offering. There was a huge squeeze, there was no shares available and they just pump the price up. So if that happens with this one, just keep an eye on, it's a phenomenon then, uh, paying attention to this.

One's really interested in Q health and we can kind of close on this one. They make COVID-19. Uh, they're a digital diagnostic device and they're gonna expand into pregnancy flu and other testing applications. And it's clearly catching on. They got huge contracts with the U S military and the NBA they're partner with J and J Mayo clinic, et cetera.

There's no comps for 22 because they weren't doing COVID. You know, uh, they didn't have financials in 2020, but the revenue for this, you know, for the last year, 200 million product, uh, gross profit of 116 million product gross profit margin was 58%. And the floats pretty low we've seen COVID plays do really well.

So I like this one. Oh, there is one more Clearwater analytics. It's a SAS investment and management for asset management. Uh, revenue and profits are solid, not particularly exciting, but when you sell things to investment management companies, they know about this product. If they like it, they'll buy this, that, you know, the IPO, but I think I'll be putting pretty heavy play into Q health given, uh, the setup here on the same day.

And I liked that one better than Clearwater analytics. So you can't play them all this isn't Pokemon. You're not going to catch everything. Uh, you need to. You know, identify the trades, pick out three or four that you really like and focus on those, uh, watch the others just to learn from what's going on, but we have a great week.

Things will look really strong last week and I'm super excited for what's coming up on the IPO calendar. That, that hadn't been the IPO warriors.com. Thanks a lot, Matt talking next Monday, getting Spencer it all right, guys. We're wrapping up here. Uh, just, uh, just to put everything in perspective here today.

Um, we are down first off. We've come to $2 off the low on this inspire in the last few minutes here, but just to put things in perspective, we're down four and a half percent from what? From all time highs. So yes, there was, I'm not saying this has nothing this morning. The sell off last few days is it's not nothing, but let's all.

Just keep that in perspective. We were at all time highs a little while ago, so, um, yeah. If you're panicking, if you're running for the Hills on today, then frankly, you've got too much risk on the table. Take some money off the table, frankly. Um, just wanting to say that before we're done. All right. How many likes are we at today?

4 29. Get me to 500 likes. Uh, well I guess for, for the come on new graphics guys, it's not every day. We do some new stuff on this show. We're trying new things. See what works, what doesn't so hit that like button for me, please. Thanks to Matt. Thanks. Thanks to all of you in our chat. Please remember all the information from our show is meant to be used as informational purposes, not for investing or trading advice to watch David Green live right now.

The link is pinned to the top of the chat in YouTube. You can also go to youtube.com/benzinga. Uh, this stream will end. It will not redirect you to David Green. So just click on the link in chat or go to our YouTube channel, or as always we're also on Twitch and Twitter on Benzingers platforms there, that's going to be a wrap for me, David Green live right now.

We open in two minutes. Everyone have a good rest of your day and we'll see you later.

Support this podcast at — https://redcircle.com/premarket-prep/donations

Advertising Inquiries: https://redcircle.com/brands

Privacy & Opt-Out: https://redcircle.com/privacy