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.

Mar 29

Now that we have a mountain of profits, how to protect them

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

Tuesday was another great session for the S&P 500 as the index finds itself comfortably above 4,600 resistance.

This rebound amassed more than 450 points in two weeks. Nearly 10% if you like counting that way. And it added up to a huge pile of profits if you traded this rebound in a 3x ETF, as I do.

Not bad for a few weeks of “work”. The only thing we had to do was hold and keep lifting our trailing stops.

But now that we have a big pile of profits, what should we do next?

Protect them, of course!!!

Rarely does the market give us such a fast and easy trade, but as they say, don’t look a gift horse in the mouth. Only a fool is expecting this easy ride to continue.

Now that we’re at the highest point since the 2022 correction started and within 200 points of all-time highs, we should expect the rate of gains to stall, if not outright retrench in a very normal and healthy step-back.

Retesting 4,400 wouldn’t be a surprise. In fact, that step back is far more likely than continuing to record highs above 4,800.

But rather than try and predict what’s coming next, savvy traders are making sure their trading plan is ready for both 4,400 and 4,800.

The best way to straddle this fence is holding for higher prices while snugging up our trailing stops to mid to upper 4,500s.

If the market goes up, great, I make even more money. If the market retreats, I lock in a pile of profits and get ready for the next trade. That’s a win-win in my book.

As I wrote in early March, markets move in waves. This is just as valid at the bottom of the wave as it is at the top of the wave. It’s been a very profitable ride. Just make sure we don’t screw it up by letting those huge profits escape.

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Mar 28

The painfully obvious reason why bears got this so wrong. Plus what TSLA owners should be doing here

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis

Monday was another good session for the S&P 500 and the index is quickly approaching multi-month highs.

Headlines remain the same, which is to say, dreadful. But if these things haven’t killed our economy yet, we will get through this. At least that’s what most investors are currently thinking.

While bears don’t agree with this latest runup, it makes a lot of sense when you look at the underlying supply and demand.

The 2022 correction started nearly three months ago and it’s been dragging on ever since. Three months is an eternity in the stock market. If nervous owners haven’t bailed out by now, chances are good nothing will convince them to sell.

If people want to know why stocks have already recovered 2/3 of 2022’s correction, it’s because we ran out of fearful sellers. And more than that, those fearful sellers were replaced by confident dip buyers. Out with the weak and in with the strong, that’s an obvious recipe for a market rebound.

While these things seem obvious now, for those of us that have been paying attention, it was just as obvious two weeks ago when stocks were probing the lows.

Back on March 9th, I wrote a post titled “Did you buy the bounce? If not, why not?“:

I follow the market’s lead and Wednesday [March 9th] the market was telling me to buy the bounce. 

If prices continue higher Thursday [March 10th], great, I add more. If the bounce stalls and retreats, no big deal, I get out near my entry point and try again next time.

Maybe this is the real bounce. Maybe it is another false bottom on our way lower. Either way, my trading plan has me covered. Buy the bounce, sell the breakdown, and repeat as many times as necessary.

The next big bounce is coming and it will leave a lot of people behind. Luckily, I won’t be one of them.

If you were left behind, learn from that mistake. Sign up for my free email alerts so you don’t miss the next big trading opportunity. 

400 points later and this is the time to be taking profits, not adding new money. If you missed this trade, wait for the next opportunity because the risk/reward is not in our favor.

As the saying goes, it is better to miss the bus than get hit by the bus. Don’t worry, another one will be along soon enough.

What’s good for the goose is good for the gander. The indexes are bouncing hard and they are taking most of the high-flying stocks with them. Not to be left behind, TSLA is up more than 40% from the lows of two weeks ago!

Without hesitation, we sell stocks when they violate our stops, but just because we got out doesn’t mean we give up on a trade. Stick with it and buy the next bounce and you can be pocketing 40% profits like this move in TSLA too.

Sell the breakdown, buy the bounce, and repeat as many times as necessary.

Move stops up to $1k and see where this goes.

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Mar 22

Why buying something that feels so wrong almost always turns out so right

By Jani Ziedins | End of Day Analysis , Free CMU

Free After-Hours Analysis: 

Tuesday was another good session for the S&P 500 as the index closed at the highest levels in over a month.

But paradoxically, headlines are not improving. Oil remains at the highest levels in eight years, inflation is at 40-year highs, the Fed is cooling the economy with a long string of rate hikes, and the war in Ukraine gets uglier by the day.

But as is always the case in the market, anyone waiting for headlines to get better before buying is going to be waaaaaay too late.

To get the best prices (and make the most money!), we have to buy before everyone else feels comfortable. And this crazy environment definitely counts as one of those times when most people don’t feel comfortable.

The market is forward-looking by nature and that means it trades based on what it thinks is going to happen in the future, not what is going on today. While all of the above situations are dreadful, they are not getting materially worse. And as is often the case, “less bad than feared” is an excellent reason to buy stocks.

As I’ve been saying all year, markets hate uncertainty more than they hate bad news. The market’s correction started on the double gut punches of rate hikes and a full-on war in Ukraine.

While it is obvious stocks will fall in an environment like that (and is why I recommended readers bailout back in early January), but two months later and there is far less uncertainty. Now the market can finally put a dollar amount on inflation, rising interest rates, the war, sanctions, and oil prices.

We are no longer worried about what could happen but are finally able to price in what is happening. And as is almost always the case, reality is turning out less bad than feared. (Our reality is most definitely ugly, but not nearly as ugly as the market’s runaway imagination.)

As wrong as this rally feels, this is the way it always goes. Savvy traders buy when everyone else is too afraid to buy because that’s the point when everyone who is going to sell has already sold and supply dries up. That capitulation point always occurs when headlines are their worst.

While there is always room for things to get worse (Inflation breaching 10%, oil breaking $150/bbl, Russia bombing Polish airfields, or Russia nuking Ukrainian civilians), it will take a significant escalation for stocks to crash under recent lows.

Trading always involves risk, but savvy traders trade what is happening, not what could happen. The greatest strength we have as independent traders is the nimbleness of our size. While I like the way the market is trading right now, if something changes tomorrow, no big deal, I lock in some really nice profits in the mid 4,500s and wait for the next bounce.

As for anyone sitting out of this market and looking to get in, I’m sorry to say, but this is most definitely the wrong time to be buying. These big two steps forward are poised for a very normal and healthy step back. Wait for that step back before jumping in.

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Mar 21

Is the worst already behind us?

By Jani Ziedins | End of Day Analysis

Free After-Hours Analysis: 

The S&P 500 spent Monday bouncing between modest gains and losses before finishing the session almost exactly where it started.

An afternoon slump was sparked by news the Fed is willing to move in half-percent increments as it raises interest rates this year. That is a little more aggressive than some investors expected, but at the same time, a 25-point midday give-back on the heels of last week’s towering 300-point rebound is hardly anything to worry about.

Two steps forward, one step back. That’s the way markets work, always have, always will. Given how much ground we covered last week, it wouldn’t surprise me to see a bigger than usual step-back, even something in the range of 150 points is reasonable.

But if a 150-points pullback is reasonable, Monday’s 25-point dip still had a lot of room left to run, so why did prices bounce and close flat?

Very few dip buyers are looking to cash in profits and that afternoon weakness vanished by the close.

At this point, more people are looking up than down. And that’s not a surprise. It’s been more than two months since this correction kicked off, meaning all of the worrywarts have been given plenty of opportunities to abandon ship. And more than that, all of these nervous owners sold their stocks to dip buyers demonstrating a willingness to hold stocks in this headline environment.

While the bearish headlines haven’t gotten any better, at some point, we run out of people willing to sell those headlines and that’s when prices stop falling. And it appears like this market has crossed that tipping point.

Don’t be surprised if we slip a little further in a very normal and healthy step-back this week, but unless the headlines get materially worse (ie $150/bbl oil, 10% inflation, or Russia bombing Poland or nuking Ukraine), expect stock prices to find their footing quickly after taking a quick break.

The pullback from January’s highs already priced in all of this bad news and as bad as things seem, stocks have already started rallying on “less bad than feared”.

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Mar 18

Why this week’s big bounce was inevitable

By Jani Ziedins | End of Day Analysis , Free CMU

Free After-Hours Analysis: 

The S&P 500 surged 290 points since Monday’s close and is now sitting at the highest levels in a month. And to think, five days ago the crowd was predicting another big crash. So much for conventional wisdom.

In percentage terms, the index is up 6.9% since Monday’s close. Catch this wave in a 3x ETF and now we’re talking about real money! Not bad for a week’s worth of “work”.

Now, I wish I could say I knew the market was going to bottom Monday afternoon and rally sharply the rest of the week. Unfortunately, I’m not psychic and was along for the ride like everyone else.

But while I couldn’t predict the exact when and where this rebound was going to happen, I knew the odds of a sharp bounce were good. This is a volatile market and that means oversized moves in BOTH directions.

First, the market loves symmetry, meaning big drops are followed by big bounces.

Second, headlines are dreadful, but they haven’t been getting worse. The correction since the January highs priced in a lot of bad news. Owners that fear these headlines have been given plenty of time to bail out of the market and have been selling to far more confident dip buyers.

And third, as I’ve written before, the market hates uncertainty more than bad news. While nothing is getting better, we can finally quantify what we’re dealing with. Ukraine is horrific, but it isn’t turning into WWIII. The spike in oil prices stabilized in the low $100s. And the Fed is only planning to push interest rates up near 3%.

While none of this qualifies as good news, it wasn’t as bad as some people feared and stocks have rebounded in a “less bad than feared” trade.

Given the above, I knew the market was poised for a big bounce, what I didn’t know was when. And that’s why I started buying bounces the week before. When I don’t know which bounce will turn out to be the real bounce, the only way to make sure I don’t miss it is to buy all of the bounces.

But rather than do this in a reckless, pick a spot and wager everything on it sort of way, I start small, get in early, and keep a nearby stop. When a bounce fizzles and retreats, no big deal, I get out and wait for the next bounce. And when that one fizzles, I get out and try again.

Two weeks ago people thought I was crazy buying these bounces. But markets don’t bottom until most people have given up. That simply means I need to be more persistent than the average trader.

Some of my early buys turned a small profit. Others broke even. And a few lost a few bucks. Throw all of those trades together and it was largely a wash. But more important than the profit or loss on those small trades is I was ensuring I would be standing in the right place at the right time when the real bounce finally came along.

I’m more than happy to lose a few dozen points on a 1/3 position when the potential upside is 300 points on a full position. This is the kind of risk/reward traders dream of! All it takes is the vision and courage to buy when everyone else thinks we’re foolish. Four days later and who’s the real fool?

At this point, there is nothing to do but lift our stops up near 4,400 and see where this goes. (You bought the bounce on Tuesday, right?)

Sign up for free email alerts so you don’t miss the next big trading opportunity.

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What’s a good trade worth to you?
How about avoiding a loss?
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