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Newsletter - 03/17/2024



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Topic: Charting Basics


Talk about going nowhere fast, actually, it's been more like going nowhere slow.  It can be so easy to justify trading because of boredom but just like eating when you are bored is a bad idea if done often, trading just because you bored is a great way to fatten up you loss column.  Self-control, sticking to your plan, and only taking trades that you are "forced" to are the only path to success.

Week in Review

From TRowePrice:

"Stocks were mostly lower for the week, as investors weighed upside surprises in inflation data and signs of moderating consumer spending. The Dow Jones Industrial Average held up best among the major indexes and reached a record high on Wednesday before falling back to end the week. Energy shares outperformed on the back of higher oil prices, while technology shares lagged due to weakness in NVIDIA and other chipmakers.

Traders noted that markets got off to a generally quiet start to the week, as investors awaited the release of consumer inflation data on Tuesday. The Labor Department's consumer price index (CPI) rose 0.4% in February, in line with consensus expectations, but core prices (less food and energy) rose a tick more than expected, also by 0.4%. Investors appeared to take the upside core surprise largely in stride, perhaps because it was due in part to a continued increase in shelter costs, generally considered a lagging indicator of overall inflation trends. Apparel costs jumped 0.6% but remained flat over the past 12 months.

The producer price index (PPI) rose 0.6% in February, roughly double consensus estimates and the most in six months. While core producer prices rose only 0.3%, this was also slightly more than expected. On a year-over-year basis, headline producer prices were up 1.6%, well above expectations and at the highest level since September.

The bond market’s reaction to the inflation surprises was more pronounced, with the yield on the benchmark 10-year Treasury note touching its highest intraday level (4.32%) since February 27."






This is what I said last week in the newsletter:

"The SPX is back in the consolidation channel from 2/21 and while Friday's candle was ugly, it is NOT a signal to get short..

Now, the weekly SPX did print a doji but until we have confirmation either topside or downside, there is nothing to do but wait and watch.  I have been noticing that breakout trades in both directions are not working as well so I remain cautious still about taking a lot of new positions."  

Pretty much more of the same this week.  Until price closes below last week's weekly low (5056.82) the market remains in a buy (3 candle rule!).

Neither longs nor shorts here are high probability - in fact trading assets strongly correlated to the $SPX will probably result in frustration or taking "cheap stops."  Use this time to run through "what-if" sceanrios: what -if the market breaks to new highs - what will you do?  And vice versa.  Let yourself be forced into trades.  Otherwise, respect the first rule of trading.



The $NDX came oh so close to confirming a reversal on the weekly chart - which is the timeframe I use to measure trend change.  Of course, the longer it takes to confirm off of last week's trigger candle the weaker the reversal tends to be.  However, if price confirms a reversal this week I will look to get short the $NDX the following week.

Small caps ($RUT) CONFIRMED A WEEKLY REVERSAL on the weekly.  This is a strong signal and looking at the weekly chart, it's very easy to see that the channel price has been stuck in goes all the way back to last March.

I will be looking to get short this week as long as price does not recapture the 2072ish level.  I have not decided if this will be a straight $IWM or a levered $RUT ETF as I want to see if there is followthrough this week.



Money markets and equities saw strong inflows this week, oddly.  I say oddly because there was nothing bullish about any of the news flow this week.  In fact, for market participants that were paying attention, the PPI read was actually quite bearish.  Unfortunately, I do not have a reason as to why this is but am monitoring.  Also interesting is that the strength in Consumer Discretionary stocks from two weeks ago was strongly reversed last week as that sector was heavily sold.  Tech remained strong and for the first time in awhile, Utilities saw positive inflows.


Bitcoin & Miners

BTC actually printed a confirmed HCD on the daily.  Fromt he daily chart, $66k is very supportive and an area I will look to add to my $BITO trade as I wait for the BTC ETFs to offer options trading.  BTC is being manipulated by the Futures market with price being dropped at the same time BTC ETFs continue to experience record inflows.


IREN found some daily support at the daily Point of Control but I think price could go a bit lower to the $3.59 price level where there is major support.

I am not selling and not going to add either.


CIFR bounced on the daily exactly at the daily POC, for the fourth day in a row.  Right now, price is stuck in a consolidation channel so until price breaks $3.72 or $2.84, there is nothing to do but wait.


BITF LCD from last week failed and price pushed lower into a strongly supportive area.  Price has not retraced the entire run-up from BTC ETF approvals.  $2.00 is the key area to watch this week.


"Let me be blunt: the argument that miners should be sold because their production will be cut in half after the Halving is very short sighted and wrong.  Remember that at this point in time, the current miners are THE ONLY WAY TO PRODUCE MORE BITCOIN AT SIZE.  If another new miner wants to the enter this space, they will do so without ever having had a chance to mine at a rate pre-Halving.  

I believe that the current miners have a significant moat in that they DID mine pre-halving and most have BTC in storage.  I think that by the end of 2024 there will be some consolidation amongst the miners which might be an additional bullish catalyst."

For now, since this is an Event Driven trade, I wait and watch.  I would only add more if prices got to really stupid levels and we aren't even close yet. YES - the above is from last week.  And it will probably be the same next week.  And the week after that.

Doom Trades 



From the newsletter last from the four weeks ago:

"Any bounce will be temporary and should be contained to below $50" - The break level remains $45.66 - and it must do so on the weekly.



Price is back and stuck in the channel from $89.27 to $81.48.  Getting closer!



Another higher high and higher low week..  Until price breaks $31.29 to the downside or it makes a new 52 week high, there is nothing to do but wait.



Weekly reversal on the $TQQQ but NOT the Nasdaq.



Current Open Positions



BOWL's price is still respecting the upward trendline and while we got a boost from the mention in Zerohedge, all that gain is gone now.  Looking to close next week.



Going flat this week.  POS.



Got the retrace on the daily, right at 55% of the previous candle on Thursday.  Trend is down and must break $41.74 to get the momentum to increase.




$UPWK looking good as it has finally broke.  We have 1-2 weeks before the theta cliff.  I have lowered the stop though.


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Don't forget the Discord live chat is STILL FREE but it will be closing to new members soon.  In fact, we have already started removing non-active members. 

  • In the meantime, come and join us - its the best community out there: Discord.

  • Also, be sure to check out the new page for Daytrading on the website, run by the fine gents @BaconTurkeyClub and @Juggernaut.  If you ever wanted to learn or just watch two pros daytrade live, they are at it every day here: DiscordFuturesChannel.

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Thankyou Family!


Nothing above is investment advice nor should it be construed as investment advice.  It is offerred for entertainment purposes only.  Always consult your advisors before investing any money.  Do not "follow" or "mirror" any trade ideas provided.  Mr.NotAdvice is not a licensed or registered investment advisor.  Do your own research.

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