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Heard on the Trading Floor Profile picture
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Nov 22 • 6 tweets • 2 min read
Slow and steady wins the race is not a phrase coined to explain the market but definitely fits well with what has been going on the last couple of days.

In case you have been busy procrastinating and in need of a summary,

this is what happened today👇
Under the radar📡:

1. Relative strength : $XME, $XLE, $XRT, $XLB
#relativestrength

2. Relative weakness: $JETS, $ARKK, $TSLA, $AMZN, $ITA, $DIS
#relativeweakness
Relative strength notes 🟢:

1. $XME, $XLB, $XLE - classic bidding in real economy stocks

2. $XRT - continues with the overnight gaps. $DKS, $AEO, $BBY had monster earnings reactions, whereas $DLTR sucked.
Relative weakness notes 🔴:

1. $JETS - even failed to get the end of day rally

2. $TSLA, $AMZN - the usual suspects. Something is really broken in those

3. $DIS - yesterdays intrasession selling continued today

4. $ARKK - are ppl tired of pumping money into crap?
Other observations:

1. $XHB at the sma200d

2. $HYG breaking out of sma100d, $PFF somewhat lagging

3. $ROL down big time, cannot find any news

4. $XLI surpassing recent highs

5. $SPY was doing good at the open but when the megas joined, it did great. Looks like a bullflag
What did I miss?

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More from @HeardFloor

Heard on the Trading Floor Profile picture
Nov 22
Surviving bear markets requires you to manage both volatility and your emotions.

Although we try to approach trading from a logical perspective, our emotions can get in the way of sound decisions.

Why is it so difficult to avoid them? 👇

1/
Emotions can diverge from rational assessment

Bear markets are a breeding ground for emotions-based investing. The feeling of fear and a heightened sense of risk will be amplified by the behaviour of other people. Traders tend to act in herds.

2/
Emotions can provoke rapid, short-term decisions that are often the wrong ones.

Fear pushes us to act prematurely.

3/
Read 6 tweets
Heard on the Trading Floor Profile picture
Nov 21
Do you know the meaning of a 'zombie' company?

As shown by the chart below, the amount of zombie companies in the Russell is at its highest level in history. Much higher than what we saw during the internet bubble.

Here's why it matters 👇

1/
"Zombie" company is defined as one that cannot pay the interest on its debt from operating revenues. The term was applied to Japanese firms supported by Japanese banks during the period known as the Lost Decade

2/
The current economic landscape is not favorable for zombie companies. Higher interest rates put pressure on these companies. New funding becomes more challenging and investors are less interested in lending money to these companies.

3/
Read 4 tweets
Heard on the Trading Floor Profile picture
Nov 21
A typical day of a trader:

Soon after the open - gotta short $XLE, gravitational pull finally. Crap, entry is gone, missed this one.

1h later, Saudi news out - quick, gotta get long $CL_F. Entry? Does not matter, load it up.

Flexability is everything.

Today 👇
Under the radar📡:

1. Relative strength : $DIS, $XLP, $XLU, $XME, $NUE
#relativestrength

2. Relative weakness: $XLE, $XOP, $XES, $HG_F, $EL, $COTY, $TSLA, $AMZN, $GOOG, $V, $MA
#relativeweakness
Relative strength notes 🟢:

1. $DIS - CEO change making investors hopeful. Selling the whole day though.

2. $XME, $NUE - $XME got a nice bid right after the Saudi news and finished on the highs at sma200d. $NUE with a nice BO.

3. $XLP, $XLU - defensives with inflows again
Read 6 tweets
Heard on the Trading Floor Profile picture
Nov 11
I was listening to @farnamstreet's episode with @Justinsua today. I loved the part around the 70th minute where he talked about the difference between losing and getting beaten. This resonated with me as I find it very applicable to the trading world. Why? 👇
First what it means to be losing:

- You haven't put your all in training
- You haven't put work in improving your skill
- You haven't optimized for food and nutrition

If it is something that you could have done but didn't, it is on you and you are losing.
Second, what it means to be beaten:

- You gave it your all and did everything you could have possibly done but the other team/guy was simply better than you.

It is okay to be beaten, it is not okay to be losing.
Read 6 tweets
Heard on the Trading Floor Profile picture
Nov 9
Almost all trading strategies are built around a simple concept and could be put in one of those 4 categories:

1. Mean reversion
2. Momentum
3. Volatility based
4. Event driven

While tons of words could be written about each of those, I will provide an example of #4

🧵
Yesterday It became clear that the recent selling in $TSLA is due Elon Musk unloading shares.

Those type of insider dealings could be seen on EDGAR, as each company is due to file them under the tab "Ownership disclosures".

sec.gov/edgar/browse/?…

👉This is our EVENT. 👈
One can easily look when and how much he has been selling. He started doing so on Nov 4 and continued on Nov 7 and 8.

Judging by today's PA in $TSLA, he is selling again. There is a stark divergence between $SPY and $TSLA in terms of severity of selling, even if we vol adjust.
Read 7 tweets
Heard on the Trading Floor Profile picture
Nov 9
Over the past 16 years I have had numerous break through moments in my trading career.

Each moment came after overcoming a tough period.

Read about the 4 lessons that had a profound growth effect on my career as a trader.
Early career lessons:

1. I didn't realize quickly enough that trading edges come and go. I thought I will make money with my favorite strategy forever but I was wrong. BIG MISTAKE!!!
2. Not realizing that market dynamics change which means some strategies stop working overnight while other strategies become profitable. You can't do breakouts in a bear market, ask anyone doing it if they are happy with their 2022 performance.
Read 9 tweets

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