NPP's This Week In Trading 8.4.19

Weekly Letter: 8.4.19

Market Environment: Volatile

Names Added This Week: JD QD XLNX


Last week we wrote:

As of close on Friday, we are now 95% cash. We are holding off any new longs until this market has a proper pullback. Which is why this week we only have one new play we're watching—SPXU (the 3x short SPY).

Our preparation paid off as we did not only buy SPXU but also SQQQ and took advantage of a market sell off late last week. While the SPX was down -1.78%, we finished up +1.73%. And NPP closed at a fresh all-time high.

Now that we are getting the pullback we expected, we are starting to look for longs to play a bounce. AND A BIG BOUNCE IS COMING. Put/Call ratios are nearing extremes on the put side. Sentiment has entered extreme bearish territory. And the market is oversold. Which means everyone and their grandmother is either short or scared. And 9 times out of 10, that causes MONSTER bounces.

We've put together a list of bounce candidates that include: AMD AMZN BAC CRSP MU NFLX PYPL TWLO TWTR. Their notes for entry are on the Charts Of Interest section for this week..

Before we enter anything, we'll need to see some conviction from big buyers in the general markets. If you look at the SPX chart, it has held the .382 retrace so far. But no big buyers have stuck their neck out there yet from what I can see. If buyers stay on the sidelines, it could fall to as low as 2880 before a bounce. We just have to wait and see what big money decides is a good level to buy.

So follow our Twitter feed closely the next few days. This is a big opportunity to make quick money on the long side. And yes, it will be quick. While we fish for a market bottom in volatility, there is a lot of in-and-out trading before a market bottom finally materializes. So have your trigger fingers ready.

I promise, the pace of our trading will slow down soon. When the market finally bottoms and breaks downtrend lines, we will change our Market Environment from "Volatile" to "Trending" and hold trades for longer. But now is not that time.

Please email me any questions you have. Looking forward to another money-making week.

Onto week 32!

This Week's P&L:

NPP: +1.73%
SPX: -1.78%

This Month's P&L:

NPP: +1.40%
SPX: -1.62%

This Year's P&L:

NPP: +9.57%
SPX: +16.94%

NPP vs SPX Lifetime: (blue line=NPP)

Screen Shot 2019-08-04 at 10.01.11 AM.png

Current Positions:

Long-term: EA GE GILD GLD QD

Swings: None

Quickies: JD QD XLNX

Charles Chao