All Posts by Jani Ziedins

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About the Author

Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.

Sep 02

The only way to trade bubbles

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

This market is on fire. The S&P 500 has been up 9 out of the last 10 sessions. Today’s 1.5% pop is the biggest gain in more than two months, meaning the rate of gains is accelerating, not slowing down. But the real star of the show is tech and momentum stocks with double-digit gains becoming the norm.

While a lot of people are nervous because it feels like this market is getting frothy, and I’m one of them, the thing to remember is bubbles last longer and go further than even the most bullish cheerleaders thought possible. I wouldn’t feel comfortable buying stocks at these ridiculously extended levels, but I sure am glad I’m holding positions with huge profits and I continuing to participate in this runup. And for the time being, I have no interest in selling. I’m following this rally higher with a trailing stop. I have no idea how much further it will go, but I definitely want to be apart of it.

The greatest strength we have as independent traders is the nimbleness of our size. We do in seconds what it takes institutions weeks and months to accomplish. This market is getting absurdly expensive, but we are nimble enough to ride this wave higher and be able to get out right after it rolls over. We don’t need to predict the future if we are fast enough (and disciplined enough!) to react to the market in real-time.

The great thing about euphoric accelerations is they tend to be one-way moves, meaning we can easily follow this rally higher with a trailing stop. Keep it 50-100 points behind the market and we should safely navigate any near-term whipsaws. And you know what? If we get stopped out prematurely, there is no rule prohibiting us from getting back in. If a false alarm squeezes us out, no problem, just jump back in when prices recover.

Stick to the above plan and see how much further this frothiness takes us. No doubt the top is still a good distance above us.

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Aug 31

How we should position ourselves in September.

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

August was the sixth month since March Covid lows and it certainly feels like the rebound should be running out of momentum. But is it?

Out of the 21 trading days in August, the S&P 500 finished green 16 times. Of those five red days, most were less than a quarter percent loss. Add it all together and August finished a very impressive 7% higher. Trade that with a 3x ETF and August was a 20% month! Not bad, not bad at all.

Sometimes it feels like we are too late. Other times we worry the market is already too high. But as I often write, things that are high tend to get even higher. And that has definitely been the case with this Covid rebound. Last month’s irrational highs got even more irrational this month. Anyone still waiting for the “inevitable” pullback is still waiting.

What does September have in store for us? Most likely more of the same. A trend is far more likely to continue than reverse. While the next step-back is just around the corner (it could start at any moment), we don’t trade that outlook until the stepback is actually upon us. Until then, keep giving this market the benefit of doubt.

At this point, there is nothing to do other than keep following this rally higher with trailing stops near 3,440. While I am concerned about last week’s acceleration, if this is the start of a climax top, these things usually get far more frenzied before the collapse.

I don’t love the market at these elevated levels, but at the moment, it is doing everything it needs to do to keep me in it. As long as this keeps going higher, I will continue holding and following it higher with a trailing stop. But if this fizzles, I will be happy to lock-in 50% profits since the June lows (3x ETF). All good trades eventually come to an end and so will this one.

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Aug 26

Should we be afraid of missing the next rally?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Wednesday was a good day for the S&P 500 as it pushed toward 3,500 for the first time in history. As bad as the real world is around us, no one in the stock market seems to care. Investors are far more concerned about missing this latest runup than they are about what could go wrong this fall. And who can blame them? Anyone that bought June’s dip using a 3x ETF is up more than 50% in only two months.

While anyone can point out great trades after they happen, it if far more useful (and profitable) to see these trades coming before they make their big move. Lucky for regular readers of this blog, this is exactly what I told them June 11th when the market collapsed 6% in a single session:

This pullback was long overdue, but this was just a normal and healthy step-back on our way back to all-time highs. This is not the start of some much bigger collapse. Expect this selloff to bounce like every dip that came before it this spring. If the bounce doesn’t occur Friday, then look for it early next week.

Two months later, here we are, standing at those all-time highs. Trading isn’t hard if we know what to look for. While that post helped readers two months ago, it is old news and now everyone wants to know what comes next.

While I loved riding this wave higher, it’s gotten a little too easy and obvious. Buying June’s dip was hard and that’s why it worked. On the other hand, buying this breakout to record highs is far too obvious. In fact, most people are more afraid of missing the next leg higher than they fear the next dip lower. And that’s exactly what makes me so nervous right now.

Everyone cognitively knows stocks go up and stocks go down, but all too often people forget these simplest ideas in the moment. As great as things feel right now, this is not the time to fear being left behind. It is the time to fear holding something that could go down.

I’m not ready to pull the plug on this breakout just yet, but I keep moving my trailing stops up. With profits this big, it would be foolish to let greed wipe all of those away. I don’t mind riding this higher for a few more days or weeks, but I’m definitely itching to lock-in my profits and get ready for the next trade.

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Aug 24

What to do with TSLA at $2k

By Jani Ziedins | End of Day Analysis

Free After Hours Analysis: 

TSLA popped at the open and gapped to all-time highs above $2,100. Unfortunatly, that was as good as it got because minutes later, agressive selling slashed nearly 10% off those lofty highs. But rather than devolve into a truly dreadful bloodbath, dip buyers raced in and reclaimed a big portion of those losses. By the end of the day, the stock managed to close back above the psychlogically significant $2k level.

Good day, bad day, or mixed signals? By all rational accounts, it is impossible to classify a 10% intraday crater a good thing. But at the same time, the fact such a shocking move didn’t trigger wider selling tell us many owners are not afraid of a little (or a lot!) of volatility and are confidently waiting for higher prices “no matter what”. That limited the damage and dip buyers were able to pick up the pieces and get the stock to close well above those initial lows.

Some bad, stir in some good and that leaves us with a mixed day. And as is usually the case, we cannot read too much into a single day’s price action. Today was definitely a signal to pay attention to, but unless it is followed up by other cautionary move, the previous trend higher remains fully intact.

As I wrote last week, this stock is extrely frothy and what goes up this fast, comes down even faster. As long as this stock remains above $2k, it is ownable, but anytime it falls under $2k, proceed with extreme caution. Today’s $200 tumble could easily turn into $300 or $500 before we know what hit us.

I love trading bubbles, but that also means knowing when to get out. Way too many people are going to ride this all the way up and then hold it all the way down. It happens every…single…time. Don’t be one of those people. Have a plan to protect your profits and then when everyone else is crying about the next TSLA tumble, you will be there with a pile of cash, ready to buy the next dip. But you have to get out first before you can do to do that.

And you know what, if we get out too soon, we can always jump back in. The nimblenss of our size if the greatest ability of being an independent trader. Remember, we only make money when we sell our winners. Buy TSLA above $2k and sell it under $2k. If we get tossed around in some whipsaws, no big deal. It sure beats holding a huge crash or missing out on the next pop.

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What’s a good trade worth to you?
How about avoiding a loss?
For less than $1/day, have actionable analysis and a trading plan delivered to your inbox every day during market hours

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