Transcription
Hello and welcome to another episode of the Investing with IBD podcast. It's Justin Nielsen here, your host, and we are coming to you live at 5:00 p.m. as we typically do on a Wednesday. Uh, today is May 6, 2026, and man, we've got a raging market that just doesn't seem to want to stop, uh, regardless of headlines or anything else, uh, that just keeps on climbing up, even, uh, with some of the earning season, uh, losers, uh, that are just getting whacked left and right. Uh, so to help us kind of make sense of everything, uh, we've got one of my good friends, my boss, Chris Guessel, chief content officer at Investors Business Daily. How you doing, Chris?
I'm doing well and it's great to be with you.
Great to be with you, too. We actually got to see our our see each other in real life, IRL, as the kids say. Uh, so that was a nice treat yesterday. Um, you know, what what typically happens is whenever the office, uh, has food, I tend to show up. Um, you know, and it just so happened to coincide with Chris being there, too. So it was a happy coincidence. Um, but Chris, let's maybe start a little bit with the market just to kind of give an overall sense. Um, and of course, one of the things we're going to talk about is, uh, uh, an an oldie but goodie in terms of indicators. Uh, an indicator that's been around for a while but that has gotten some special attention from you recently. Um, and also some stocks, of course. But let's start with, uh, the market.
Um, man, this market has been strong. Uh, it's it's one of those things where, uh, I'll be honest, it was no fun for quite a while. Uh, I had peaked in September, September 22nd. I just recently finally got myself to new highs. Um, it's it's a little bit easier to calculate in some accounts than others. The the account, the accounts that I still contribute to, you always have to do that back out so you don't have a beard town ladies type thing, uh, situation going on. But, uh, but today, up, up 2% for the NASDAQ composite after having already really come up so strongly out the bottom. I mean, this is, you know, we were at 20,000 just a little over a month ago and now we've crossed 25,000 and looks like we're not looking back. So, what's your take?
Uh, well, I mean, that was an amazing follow-through and just the, you know, we, I guess, what, two weeks ago, we kind of went sideways for a week and a half. I think it was more, uh, clear on the S&P.
But, um, I've just been, uh, amazed at at the power. Now, there have been days where the market's been up and I've been down like a lot, and and and so there are, you know, those days where your stocks just aren't in sync with the market. But then there was, you know, I've also had days when the market's flat and I've I've been up, you know, more than 1%. So, uh, it kind of goes both ways. Um, for me, I'm still trying to, you know, add exposure and, uh, because I'm always a little, uh, reluctant to to go super big right away when the market, uh, follows through. Now, I have been adding to positions,
and getting them up, um, you know, to, uh, bigger, bigger sizes. Um, it also helps that I've I've got Micron and that's like a, probably, I don't know,
a monster, probably like a almost a 40% position right now. So.
Oh, wow. Okay. Uh, I didn't realize it was that large. Uh, cuz I think, you know, you and I were talking a little bit earlier and I know a lot of your positions are more in the 5% range and you're, you know, trying to add to them, but this one, uh, a lot bigger. And maybe, you know, before we go too far, uh, you know, 40%, I mean, that probably makes a few people do an audible gulp, uh, especially with something with a higher ATR. I mean, this, this is, I'm surprised it's not higher actually on this.
This is, uh, 6.45, four, five.
I think I'm I think I overstated that. And it is, uh, doing some quick, uh,
Yeah, I'll do a little,
back of the envelope math.
Yeah, it's it's not.
Oh, it's only it's only at 21%, uh, 22%.
Well, okay. 20, 22% is still, uh, pretty decent. Uh, you know, especially for something that moves like this. Uh, again, you know, when you think of something that was just at 311 not too long ago and now is at 600, and you, you, you actually had this a lot earlier. Um, may maybe you could talk about where you got this and how you were able to hold on to the position through, uh, kind of a messy situation here, especially this undercut. So, um, this comes down to a hedging strategy that you've shared with a lot of our listeners before. So maybe you can kind of talk about that.
So, uh, sure. Was it September that you, you got this one?
Yeah. If you, if, uh, maybe we pull the the the chart over so we can, uh, get a clearer look at what it was like in September.
Okay. I'm gonna.
Yeah, there. So, actually, I got it the day after the breakout. So it it gapped up and I was looking at it and like, you know what? I gotta, this this looks good. I, I want to go after this one. And I did, um, and, uh, you know, have held it since. But to your point, if we pull the chart back now, um, you know, when it started pulling, you know, those these pullbacks to the to the U 50-day, um, what I would do is, um, there is now a an inverse Micron, uh, ETF called MUD, MUD. And, uh, and so it's not, you know, it's not double or anything, but, uh, but I've used that a number of times to to, you know, withstand these the up and downs and especially after earnings came out and things looked great and then it reversed and, uh, and undercut the prior base, and I was like, well, I gotta stick with it and let's see what, you know, what happens here. And if it had really, um, you know, continued down, I would have gotten rid of it. But it spent a couple days below the, uh, the the prior base, but then started coming, uh, back up. And so I, you know, um, I was really playing with the hedge a lot intraday and, you know, taking it off when it would was, um, running up and then putting it back on when it was kind of stalling. But I took it off completely, um, when it took out the, um, basically the the old high, um, from the from the prior base. So this 450, 550 kind of area.
Actually more the 471, the, yeah, the 471 area. So, uh.
And although yesterday, I was I thought the move yesterday was kind of crazy and so I was hedging it, um, intraday just because I thought, oh boy, if this thing rolls over, you know, I don't want to give give all this, uh, gain back. So, you know, kind of went back and forth and and then today it it it pushed higher. Um, but I'll, you know, I'll continue to hedge when, uh, it really seems likely that it's, uh, going to pull back or, you know, basically, um, when things don't, you know, when I lose the the 8-day, uh, exponential or the 10-day simple.
And that's your little, is that a pink line there?
Pink line. Yeah, we'll call it pink. Maybe.
That's that's typically where I start hedging and then if it loses the the 21-day, I'll I'll sometimes I'll go with a full hedge at the 10 at the 10-day or 8-day. And, uh, but other times I'll do half and then wait and see how it handles the 21-day.
Now, in this case, you know, it wasn't a break of the 10, 10-day or 8 EMA. I'm I'm showing the 8 EMA right now. Um, it was kind of the extension. So, what, what are your kind of rules for when you start putting a hedge on?
Uh, when it, as you said, gets a little crazy.
To the upside?
Well, that's what I was. Yeah. And and so, um, I mean, right now, basically, what I'm doing is, you know, looking at the prior day's low and can it hold that? And then if it really reverses, then I'll probably put the hedge back on.
Gotcha. Um, okay. And, you know, so just to get back to the market part, um, you know, we've again had this very strong market and again, if you've got, if you've got just a few of these winners, sometimes just one with size is enough to really make a big difference. Ken Shrieve, uh, one of our senior markets reporters, was talking on IBD Live today about how, well, Bloom Energy, um, has kind of made his year, you know, because he had a decent sized position in that. And I do have a position in Bloom Energy myself. Um, but you've also, uh, said kind of at the outset that right now you're trying to,
you know, you were a little slower to get in on the follow-through day and so you've been trying to add. And I guess that's one of the,
tricks here, uh, of what they call kind of the the lockout rally idea of, you know, it's, you know, things go up so quickly and you've got this kind of dichotomy. You've got the strongest stocks are up and out of there, right? And feel extended and like, you know, it's it's a little undisciplined to buy them when they're so far out of any type of buy point. Um, but the ones that are set up well, those are a little bit difficult too because their relative strengths are by definition a little bit weaker because they were still setting up. Um, so how have you been kind of managing that dichotomy and certainly adding to positions that you already have that you got your foot in the door,
is one way, but have you been adding to or I guess initiating positions as well?
Oh, yeah, definitely. I I added RIO and GEV today and XBI yesterday. Um, and then in the last week, I've added ADI, TSM, and DICOM. So.
Okay.
So, a lot of these are found on Leaderboard, by the way, for those that might recognize a lot of these names. Uh, so, yeah. Uh, uh.
Well, Rio, I I I brought it up to Dave and and Mike and saying, "Are you guys going to put Rio on?" And they didn't do it for a while. I could have gotten a much better entry, but I would have had to, uh, sell it and, you know, start over again. But, uh, yeah. Um, um, so we'll see.
But I mean, Rio is a good example. I mean, the the relative strength was the relative strength line was coming down on this one because, you know, the market was going up and this this wasn't. But, uh, again, you look at a lot of the the price action in isolation and it's like, oh, well, that's a that's a great looking base. It kind of just tightened up. Really didn't give up much ground. Just had one day where it closed below the 21-day moving average line and then was right back above it. Um, so, uh, I I know you've looked at the relative strength line a lot. Um, you've mentioned how at level fours, you know, you're looking at the year in review of all the winners and the relative strength lines are phenomenal, uh, kind of at the beginning of the move. Um, so when when it's kind of like a, I guess the next tier comes out, um, how do you, how do you kind of manage that? Well, in this case, you know, it seemed, uh, this was moving on on at least what Ed was saying. It was related to, you know, things perhaps resolving themselves, uh, in in Iran. So, um, and there were a lot of, um, these, uh, you know, miners that that were moving today. So, that seems, um, that gave me, it still is a risk, but if we take that element off that was perhaps keeping it under wraps, then it seems to me then it could go. Now, if it all falls apart tomorrow, I'll probably be getting out of it very quickly.
Yeah. Um, you know what? Uh, something from YouTube again. Uh, thank you for the folks that are watching live on YouTube and making some comments here. But someone live on YouTube was asking about your the way that you hedge. Um, so for Micron, for instance, you were talking about how you are hedging with the inverse MUD. Um, how do you, how do you get the appropriate number of shares? Are you using the same number of shares or how do you?
You, you take the value of your position and then, uh, if you want a full hedge, you just take that number and divide it by whatever the the last price is for MUD.
So, right now, MUD is trading at $21.20. So, if let's say you had a, you know, a $10,000 position in Micron, you would basically say, okay, if I want a full hedge, $10,000 divided by 21.20, 20, and that's the number of shares that you buy of the.
Exactly. Right.
Perfect. Okay. Great. Okay. Let's, let's move on.
Um,
I'm buying more like 17,000 shares or something.
Uh, yeah. So, now, do you ever find, um, and I haven't done that much on the inverse, uh, single stock ETFs. Um, are you finding the, I mean, this, this has an average daily dollar volume of 67 million. I mean, it's, uh, not, you know, not illiquid at all. There seems to be plenty of liquidity. Do you ever find that you're, um, having problems with liquidity, uh, on any of these inverse things or has that not really been an issue? You know, large spreads, any of that?
No, it hasn't been an issue yet, but I'm I'm sure it could be, especially if it's a newer stock and and the, uh, ETF is is u very new. But compared to puts,
Yeah, options, right?
They, they are, you know, who cares if it's, I mean, right now there's a, or at least at the close, there's a 20 cent spread. So, uh,
on on, uh, MUD and, uh, if I saw a 20 cent spread on a on a put, I'd be, you know, doing a
Back, right? Exactly. Yeah. You, you, you can often see a 20% spread.
Yes. With a put. So, uh, yeah, that makes it a little bit more difficult. Okay.
Um, so here's what I'm going to do. We're going to talk a little bit about, uh, MACD's. Now, uh, for folks that don't know, uh, MACD, it stands for, uh, moving average, convergence, divergence. Um, you're basically taking, uh, some moving averages and just looking at the difference between them. Um, you're smoothing it out and then it gives you an indicator. And this is an indicator that's been around for a long time. But, uh, on MarketSurge, as we went through this latest, uh, iteration, uh, a lot of improvements, changed our infrastructure, and now the MACD is something that we have, um, uh, available. Uh, so what I just did is I, I went to my library and I looked up MACD. Uh, that put the MACD, uh, right down there at the bottom. Um, I actually am going to put this at the top, though. Yeah. Um, because that's how we like to look at it. Um, and, you know, let me, let me, let me switch this back to Micron. Um, so,
And typically, I, I don't, I focus on the histogram bars, the the red and green bars. I, I typically turn off the, um, the two lines and, but basically, when the when the black line crosses over the red line, then that's when the histogram is going positive and going over zero. So, I, I'm, I'm more focused on the histogram than I am on the lines.
Yeah. So, we're going to go ahead and show how to do that. Uh, you know, you go to the tech indicators. That's how I put it on. Um, I'm going to go to my active indicators. I'm going to go to my MACD. And this kind of gives you all your settings. Um, so, again, we, we use the default settings here. Um, uh, right now, um, so, let me, that was coming up before. Try and select.
Still, still getting used to some of the things here myself, but, um,
Just, just go over one of the lines and then right, right click.
Okay. Edit settings. There we go. Um, so, again, 12, uh, is our fast, um, and 26 is our slow. And it's the difference between those that we're calculating with that black line. Now, the red line is, uh, a nine, nine period smoothing of that black line. Um, and then, as you said, there's the the histograms that kind of show where where you are in relation between the fast and the slow, uh, that relationship between the two. We're going to go ahead and put this to white, uh, for our MACD. We're going to also put our signal line, and that way we're going to be able to concentrate on, uh, just the histogram. So, since we have Micron up right now, um, let's talk about this, uh, how you would use this. And again, this is something that's been out out for a long time. Um, most people use the daily, but you actually end up using the weekly a lot of times. Why is that?
The the reason is, I, I played around with the daily years and years ago and, you know, sometimes it worked and I, I just kind of lost interest in it and we were using other things at the time. So, but, um, last year I was, I was looking at it and, um, and noting that actually it really does, especially around breakouts and and reversals, it's a really good indicator that gets you moving in the right direction. Now, just because it turns red or even goes negative, that doesn't necessarily mean you need to get rid of the stock because if you've got, you know, a 100 or 200% gain on a stock, you can sit with it and especially if you can hedge it, um, that's even, even better. But if you, um, maybe so, uh, maybe do best fit and,
Or not best fit, auto fit. Auto fit.
So, and right click on that, that first week where it was, um, going through the, it just barely went through that cup with handle back in September.
Let me lock this.
Yeah. And if you, um, okay. And so back in September, September 8th, um, was kind of your, your entry. So, right here, uh, it looks like, and again, I can see that the MACD histogram was 3.3. The week before it was 1.4, 1.43. So, um, it was positive.
Um, and, uh, but yeah, you were, you were right there. Yeah. So, when I'm looking, especially doing my weekly, you know, on on the weekends when I'm doing my, um, screening, usually what I look at first is the weekly and then I have the daily and I might have the monthly chart on another screen. And so my my focus is, let's, I want to see the the stocks that are showing, uh, strong momentum and that's what this indicator does. And so when you can put momentum with a buy point, that's a really strong combination.
Yeah. Absolutely. And so, um, getting back to kind of what you were saying, you know, like this example right here, you, you had a lot of progress here, even though you maybe didn't participate fully because you were hedging along the way, uh, which does,
take away some of your performance, but gives you the benefit of holding on to it off.
Yeah. Um, so, well, yeah, especially especially on the put side, a lot of times, uh, you know, the the dynamic pricing of puts would sometimes, or dynamic leverage, I should say, um, but,
you know, so you don't really use use this indicator as a sell signal?
Um, or, or do you, uh, like, especially early in the move?
Uh, if when I'm when I'm, uh, really, you know, if I'm up 50%, 100%, I can sit through a a correction and it's normal for a stock to to take some time off. Now, I, I, I mean, I was, you know, really kind of wondering, uh, should I get rid of this, uh, when it undercut the the prior base, but that same week it reversed higher and it's like, okay, this is starting to look good. And, um, and so I sat with it and even though it, um, and and then within, I think it was the next week where the, uh, the histogram turned green again. So, um, and it's, you know, acted really, really well, uh, you know, right now. And so these these stocks that are, especially the the memory stocks, they've just been phenomenal. And this was like the last one to really break out. I, I know that, uh, STX, um, maybe was around the same time. Um, but I'm, I'm getting, what's the other one?
Uh, WDC or Seagate?
Seagate. I, not. Yeah. Not Seagate. Sandisk. Uh,
Yeah. SNDK. Okay. Yeah. So, SanDisk was part of Western Digital and they, they took it off and and so it, it too started moving in September. It was kind of off my radar at the time. I kind of wish I had gotten that because, would have been, uh, a much, uh, more impressive year. But it's, uh, this, this one has just done a, a fantastic job.
Yeah. So, SanDisk at that same time came out at around 80 and is now trading at, um, 14400 roughly. I do have a position in SanDisk myself, but unfortunately, I got that more recently. I did not participate in that whole thing. It was just one of those things where, you know, at a certain point, you're like, I've got to have this. Um, I, I, I did have, I switched between Seagate and, uh, WDC, uh, on on part of that move up, but, yeah, it was kind of like Seagate was, I mean, SanDisk was the one to have. Um, so, so just again, to kind of make sure we're understanding the signal here, going back to Micron, um, you're, you're really kind of focused on the histogram, which is that difference between your, um, your black line and your red line. Really, that's what the histogram is showing you. And, uh, you know, the the bars. So, you've got whether it is above zero or below zero, but then you also have whether it's green or red. You've got when it kind of gets really tight, you know, really small bars, um, and a lot of times I think people look at that as, oh, a potential reversal is near when you've got those, uh, small bars because you're about to flip from, um, you know, from a, a negative to a positive. So, what are you, just looking for the green? Are you looking for the above zero?
Both. Well, um, when you're near a follow-through and and we saw a lot of this and Leaderboard was a good example of this where they were buying stocks that ended up because I, I talked to him about it, uh, later in the year and I looked at their trades and they got a lot of trades where the the histogram was green, but it was below zero, but it was because the market, you know, had sold off quite a bit and then we got the follow-through and the the stocks that were green and even below the zero line, many of them did very, very well. Palantir is a is a good example and that was one and it was kind of Palantir that got me looking at this, uh, again because, when it came back through the 200 day in, uh, in I think it was, um, in the June quarter, it was coming up off the, um, the bottom. Let me see when when I got into it.
This is June of 2020. Uh, I can go to the daily.
Yeah. Yeah.
Maybe you'll maybe you'll recognize it. Um, certainly not more recently. Palantir has, uh, suffered along with a lot of software. Um, but, you know, it looks like maybe February 2024 when it kind of bounced off the 200 day. Yeah. Back in, yeah. Yeah. Kind of in late May and early June is when it started, uh, starting to move. Just, uh, yeah, kind of coming out of here,
in June and then,
um, and then you had another, uh, long base and another kind of June breakout. It was a little bit tough to handle in this period, but then once it started, um, yeah, kind of trending above its 21-day moving average line, it got a little easier. But yeah, since then, all these bases have been kind of a little cruddy and this is actually where I got myself into some trouble. There were a few, few of these breakouts that did not work out well for me on Palantir and so it ended up being one of my biggest losers of the quarter, actually of the year, maybe, because I didn't participate on the upside and I just was trying to capture, capture something that wasn't there. Um, okay. So, that's that's Palantir. Um, let's, let's maybe talk about a few others, um, that you're, you're looking at. Again, you went through your own trades and you went through all of Leaderboard's trades. Um, let's talk about this October through March period. I mean, I mean, really,
I felt like October through February was a little harder for me because that sideways motion in the NASDAQ and the indexes was a little bit more challenging because it always seemed like it was on the verge or there was rotations where, oh, you know, the the Russell 2000 was doing, you know, fine. Um, you know, there were there were stocks that were doing okay,
um, or even,
doing very well during that period, but the indexes overall were not doing doing well.
Yeah. So, I, I looked at all my, I looked at all my trades from October to December.
Mhm.
And, uh, my average, um, return, uh, gain or loss, actually turned out to be a loss was 0.5% on,
on a number of stocks, and the sum of that was minus 44%. So, if I were, you know, doing a hundred thousand positions on everything, that meant I would have lost $44,000 during that period. So, I went back and, and sometimes I was, I was buying them when they were green, but below the zero line, or maybe they were green on the, on like the 65-minute chart or the 30-minute chart, but red on the daily chart. And so I, I checked, um, all those and when I looked at the ones that were green and above zero on the daily, on the, well, on the weekly chart,
On the weekly, right?
Uh, my, and if I had just traded those during that four-month period, that was just a big pain. I had a 0.1% average gain and, uh, Uh, and total that came out to 3.8% of a, of, if you just add up everything. So, it's still, it wasn't great, but I was slightly positive as opposed to giving back a, a good chunk of the money that I had made earlier in the year. So,
And again, this is a theoretical. You would have been positive if you had stuck with that,
exact universe, you know? Right. Um, yeah, I, I did not stick with that universe and I can tell you I did not have a during that period amount of time, you know, I think I was, you know, at the end of the day, I think, uh, my drawdown was, you know, right around 10%, which is, you know, which is not fun when you put a dollar amount to that. Um, so, uh, and again, the the harder part too is, uh, sometimes it takes you a little bit longer to dig out of the hole. So, the market is, you know, uh, having this phenomenal move and because I had to dig myself out of the drawdown first, you know, I didn't make highs when the when the NASDAQ was, I was still, you know, plotting away and it was only in the last maybe week, uh, that I, that I got got back to new highs for for my accounts. Um, so, so, okay, let's, um, let's maybe take this a few steps further and,
talk about the Leaderboard, you know, because you also analyzed, uh, just as a, as a model portfolio, what, what happened with the Leaderboard trades. What were the results from that?
Yeah. So, I went through all the the Leaderboard trades, uh, from 2025 and like I said, they had bought a lot of good stocks, uh, around the follow-through that were green and below. So, I just looked at, okay, which ones were green and which ones were red. So, they're green stocks, they,
what,
these on the histogram bars,
Right? So, uh, they made $391,000, uh, dollars off the green stocks and they lost $70,000 on the red stocks.
So, again, it just goes to show when you, when you've got momentum in a strong market, and that's what this, this indicator is. It's a, it's a, it signifies momentum, and it makes all the difference. And so that's a, a really, and and again, that when, uh, on the weekly chart, if it's red, it's highly likely it's not going to work for you.
And what,
there are times when it does, but,
Yeah, as with anything, it's an odds game, right? It's, uh, you know, uh, you want to put the odds in your favor as much as possible. Um, so, what, what time period were you studying for both? Yours was October to December, I think you said.
Yeah.
Uh, and what was the Leaderboard?
Leaderboard was all of 2025.
All of 2025. So, that meant you were looking at the tariff tantrum, you know, and how ugly that got. And, uh, and again, uh, Leaderboard was not as aggressive during that downtrend, of course. Um, but coming out of that, you, you had that period, you had sideways. So, uh, it did have a, you know, few different, uh, uh, cycles, I guess, that you could look through just in 2020.
And they did very well by picking up the gold stocks, uh, last fall and, uh, some of the, uh, miners. Um, weren't they in Southern Copper?
They also had,
Right, Google was a big one, you know, they held Google for quite a while.
Look at Google. Mhm. And, and just to be clear, because I mean, again, I'm, I'm looking at a lot of these areas where, oh, you know, the histogram is green here. Are you really kind of looking for that turn, though? When it just starts turning green, because I mean, you know, where where Google is green right here, it's kind of extended. Yeah. The momentum is,
kind of already, you know, and and the bar is large. Uh, but you're really kind of talking about,
around buy pullbacks, you know, pullbacks within bases or tight areas within bases or the the actual breakout. And so they got, I believe they got, uh, Google on the breakout and so it was green at that point and they, you know, held it on, uh, did they, I think they might have gotten out of it at at one point, but it held the 10-week during a time where most, I mean, the Mag Seven stocks, this was the only stock that was really working at that time. And,
Right.
And it, you know, that's the type of move you want that holds the the 50-day and the 10 week.
Um, okay. So, we've got some, we've got some stats, we've got some studies. Uh, how, how do you usually go about,
kind of kicking the tires on an indicator? You know, again, you kind of showed how you just went through all the trades and said, "Okay, if I had, you know, separated them out, these that got the signal, these that didn't." Um, you know, what, what would, what kind of difference would that have made to the portfolio? Um, but, and again, with Leaderboard, you had kind of the full year with a downtrend, an uptrend, a sideways trend. Um, how far back do you usually go, uh, to give yourself comfort and at what point do you like ditch an indicator and say, oh, this is, this just isn't working in this market?
Well, I, I have to say that, um, it was a little rougher, uh, especially, I mean, January was a fantastic, uh, month for me. And, but then I gave those gains back in March and, uh,
basically the first, uh, you know, week or two of of April. And, um, and and I usually put fairly tight stops on on my stocks. I'm often, you know, between, I don't know, I rarely go above 3% or 4%. I'm usually around 2% in in my stops. And so I, I will get, and in a, you know, a kind of a rough up and down market, I'll get shaken out a lot. So that's, uh, March was not a great time and neither was the the beginning of, uh, April.
So, um, but,
but to your credit, you're not taking a big hit. It's, you know, because you're taking those losses pretty quickly.
Exactly.
So, yeah.
Um, just, just one quick thing. Uh, I want to address a question that we got, um, because I went through it a little bit fast. Um, you know, the, the MACD appeared here when I, when I brought it up, but, um, this is, this is where you move it up and down. So, I, I showed how we moved it up. Um, you know, it's, it's just this arrow right here. And so, if you need to move its placement, um, that's, that's how you do it. So, uh, thanks for that question. Um, okay. So, do you want to go through some more stocks? Um,
Sure.
Yeah. So, let's talk about FIX. Um, and I do have a position myself in FIX. Um, but talk about where this one, uh, kind of gave you your signal.
Yeah. So, let me, let me call it up.
And this is a, this is a more recent signal,
Right? So, I got this on. Oh. Oh, th this is another one where I bought it after market but before the the follow-through day. So, um, the news was out and you, you know, the market closed and and then things really started taking off and it and it looked like we were going to get a follow-through the next day. And so I bought a couple stocks and, uh, one was FIX and the other was Pterodine, TER. And so, uh, that was on, uh, 4/7. So, after after the market closed on 4/7.
Okay. You know what? I locked it, but the track price wasn't working for me. So,
Well, why don't you go to the daily to to Okay.
First get a, a look.
Okay. So, here's VIX. And,
Yeah, so it was making, you know, it was on my my radar because it essentially was, you know, making a base here. And, uh, and it, you know, it, it started moving after hours. Um, and then it gapped up afterwards. And on the on the daily, it was green. But, you know, going back to the weekly, if we look at the, um, that week,
Right when it crossed 1500.
Right there.
Yeah. Mhm.
So,
it went from red to green that week.
And, uh, and, you know, was,
Um, and it hadn't turned negative, you know, it was red, but above the line. Um, although, you know, when I,
Does that give you an indicator too, uh, you know, when something is that an indicator for you too, when something doesn't go below zero, it's like strong enough to hold up?
Well, I, they typically don't make good buys, but,
it's, it's much easier to hold if they're if the histogram is red, but above zero.
Because in this case, it was just, was that a flat base or a consolidation? It was just going sideways.
Yeah, it's not, not popping up for me. So, um, I think I, I goofed something up, but, um, so you're, you're buying it out of this and, and again, it's multiple weeks up in a row, um, from like 1500 up to 2,000 now. And,
Yeah, and if you go to the daily, then I added more on 4/17. Mhm.
So, it kind of pulled back to the to, uh, the the 8-day exponential and I added, uh, to it there.
Okay. Perfect. Now, you had mentioned Pterodine already. Let's, let's go ahead and go back to Pterodine.
Um, this is another one that you mentioned was an after-hours buy for yourself.
Exactly.
Um, yeah. So, uh, this was on April 2nd. So,
No. Uh, no, on on April 7th. So,
April 7th.
So, it's that, um, again, and if you draw a line, it kind of was breaking through a downtrend, uh, from 344.92 to 327.
Uhhuh.
And, uh, there you go. So, again, after hours, I saw that it was starting to move and, uh, so I bought it, uh, there and then it gapped up, um, and I didn't like the fact that it lost the the 8-day exponential, um, before earnings and so, in fact, or it was coming down to it, uh, the day before and I actually hedged it at that point. Um, and so the fact that I hedged it a day before earnings, then it fell some more, and then it fell even more. So, the my hedge ended up being more profitable than the trade.
Okay. Someone was asking about that, like, oh, you know, if you, if you put in a hedge, aren't you guaranteed to lose on one side? Yes, but it's, it's, you're looking at, is it an offset? Um, and again, sometimes that lets you hold on to the position, which, uh, could be beneficial for tax purposes if you're, uh, trying to get a long-term capital gain on something.
Right. And actually, I mean, this is probably my best hedge ever because, uh, let me just do a quick thing. Yeah. I mean, I made 50% more on the hedge than I lost on the stock.
So, and that was just an unusual because I bought it a day early, um, because I didn't like the action and so I put it on at that point and then, um, and then it,
And what were we hedging with in this case? Is is there a single stock inverse?
It was, no, puts. It was with puts. So, that so that, you know, with puts, the more it falls, the it, it, it, it earns more than the stock loses because the delta,
gets larger and larger and so, so for every point you're, you're getting more out of it, um, as stock goes down.
Yeah. Because the the delta changes and so, yeah, you're, you're capturing more of that gain. It should be mentioned in the opposite case when, uh, the when the hedge goes against you, let's say it pops up in a big way, the stock does, um, well, then it ends up hurting you less as as the stock goes up. So, instead of maybe having, um, you know, maybe it starts at a delta of, you know, let's just say 75, uh, so each point move you're seeing a 75, uh, cent move, uh, but, you know, then as it goes up and up, you know, maybe that turns to 60 cents or 50 cents, it gets less.
Well, actually, you know what? I normally do is I put on a half hedge. So, if I have a 100 shares, I buy a, uh, a put with a minus five delta, uh, 0.5, I should say, 0.5.
So, I'm, I'm putting on half of a hedge and typically if you're, if the stock is moving,
which means you're probably right around at the money.
Yeah. Yeah. Typically. And so, uh, what, you know, if the stock goes up or down, you know, 10% or more, uh, you, you basically on the upside, capture 80% of that gain and on the on the downside, you're only losing 20%. Because it, uh, especially when it, if it falls 10%, that put is gaining a whole lot more value than the stock is losing compared to, you know, where you bought it. And so that's why, uh, instead of, you know, an even 50/50 or however you do it with a, um, with an inverse ETF, you can really, uh, capture a lot more gain on the upside and, uh, and avoid much of the loss on the downside. The problem is when you have a stock that doesn't really move and there's the volatility implosion.
Yeah.
You can, you can lose a lot from the put and you're not getting much from the stock. And so that's the downside with it.
Yeah. Yeah. Where the volatility crush basically, um, makes makes you lose even though the stock didn't do anything.
Right. So, I, I have three stocks, uh, that I had to hedge today. ARW, ALGM, and KIC. And, uh, KIC has, um, when is is up like 13% after hours. So, we'll see. It shouldn't be that that big of a, um, I mean, that one should work fine for me. We'll see about the other two. Mhm. Uh, just to wrap up with a couple, couple more that you, uh, were playing. Uh, let's take a look at Carmen. Um, this was a Leaderboard stock in January that had a really nice move, actually. It, this and FIGS kind of made Leaderboard's January. Uh, smaller positions, but very powerful.
Um, let's go to chart.
And where were you, uh, where were you getting in on this one?
So, I, I got in on the breakout and, and so you can see how once it,
bottomed his,
Yeah.
going above zero.
Yeah. And, and, you know, it had been green for weeks as as it, uh, had,
been building the bottom of the base and coming up. And so I saw that and I didn't really know anything about Carmen and it just, it, I mean, they had great, um, fundamentals. The the chart looked good and I'm looking at the, uh, you know, the momentum with the MACD and went for it. Now, the the bad thing was it kind of stalled after that really strong week,
and then started coming down. And so when it lost, let's go to the the the daily, um, when it lost, uh, before it lost the, um, yeah, it was that day when it came came down to the, uh, the, uh, the 8-day exponential. I think I took half of it off there and then when it lost the 21-day, I took off the rest.
Yeah. Um, let's also, again, they don't all work. It's an odds thing, right? Not a, not a guarantee. Let's take a look at FIGS. Uh, this was another big winner for, um, uh, where was, where was it? I, I thought it was this one that they, uh, oh, no, it wasn't. It wasn't FIGS. It was FIGR that Leaderboard had. Um, and that was another one that had really made their January. But FIGS, um, this was kind of, uh, a darling, uh, when it IPOed and, you know, something that really caught our attention. Uh, and then it just really got clobbered. Um, you know, it had this nice move, got clobbered. Uh, it's, it started coming back on our radar more recently and,
Um, yeah, so I, I bought it on, uh, 4/24.
And, uh, if we go to the, well, so we can see that,
as it was getting, yeah, it was looking green and then we go, um, so I think I got it on that day where it spiked,
above it was already in the buy area. Is that, is that, uh, let's see, yeah, that that day there and then it reversed and it's like, h, I hate it when when stocks reverse on a breakout. That's never a good sign. And, uh, I, I got definitely got shaken out of it the the next day.
Oh, you know what?
I actually got out of it the day I bought it. Oh, okay.
Because I got it. I was, I think I had bought it near the top and, yeah, that reversal just shook me out.
Yeah. Uh, I think I did the same trade myself. Oh,
Okay. Well, I'm glad we were together on that. But, you know, like any indicator, it's never going to be 100% accurate. And, but what I have found by looking at my own trades, Leaderboard, uh, Leaderboard's trades,
and, uh, is that it definitely gives you an edge.
Yeah. And, and that's really all we're looking for, right? You know, just any little edge. Um, as you said, if it can even keep you positive as opposed to negative, uh, that's a huge, um, huge benefit.
Right?
Yeah. So, well, thank you very much for sharing, uh, your kind of research here. Um, you know, this is again, one of the things that we, because we did this whole change in our infrastructure for MarketSurge, um, we have a lot more technical indicators. Um, and maybe you could share a few that are to come.
Well, um, I know that in the, uh, it's, we haven't started working on it, but I know that we're going to, uh, put, uh, the Webbby RSI, uh, into it. And he's got some other indicators, but his, uh, the RSI stands for a really simple indicator. I don't know that's true, but,
uh, but, uh, uh, it does, it does tell you when a stock is getting extended and is likely to pull back. And so, um, it's, it can be very helpful for putting on a hedge or just, uh, taking your profits and moving on.
Yeah. And I think I think we had it kind of in process and almost all the way there, but he just didn't have a chance to look at it. So, and get comfortable that it was being done right. He wanted to make sure that.
So,
And then the other one that, um, uh, was on there, but there, there was a problem with it, and that's the anchored VWAP.
So, uh, what does VWAP stand for again?
Uh, volume weighted average price.
There we go. So, that one really works well, especially on pullbacks. I, that's where I like to use it and, um, um, I think I, I use it differently than Brian Shannon, but, uh, it, it is, it is a good, uh, indicator and we're going to get that all resolved and get it on, you know, on the site as soon as possible. And, you know, that's also, um, Don Vandenborg, who's been on the show, been on IBD Live, and, uh, we're going to have his colleagues on the show next week. Um, you know, he uses the stochastics, uh, a lot and, uh, especially on the 60-minute or 65-minute, um, you know, so, yeah, again, there's just a lot more of these technical indicators that you can throw on there. Um, one last question,
for the MACD's, uh, do you use it on markets and ETFs?
Um, I, I do use it on ETFs. In fact, I, I bought XBI with it, uh, yesterday and it was slightly, um, I think at the time it was slightly, um, negative, but like less than a point, like three. And so I thought, well, I'm going.
Small, tiny bar, which again, is often indicative of, uh, trend reversals.
Exactly.
Uh, so, yeah, I, I, we'll use it for for ETFs. Um, I haven't really looked at it, uh, with markets, but that, why don't we just take a look at the, at the NASDAQ and I think it was looking pretty good. So, we'll pull up the NASDAQ composite, go to the weekly, and,
Yeah, it was, it definitely,
right there, turned green on, uh, the bottom,
and, um, yeah, very quickly, you know, got back above zero. So, yeah.
And the same thing happened back in, in, in March. And I think,
I wasn't using it then. And if I had been, I probably would have been much more aggressive at, at, at that time because there, I'm sure there's plenty of times where, uh, there aren't that great of, um, well, I mean, we, we had some faux follow-through days, right?
You know, uh, in January, February, and March, and, and,
uh, it was red then. So,
Yeah. Well, Chris, thank you so much for coming on the show. Always a pleasure, uh, chatting with you, um, in, in front of everyone. We chat with each other all the time. So, and that's still fun. So, uh, thanks a lot for being on the show. Really appreciate it.
All right. Great to be here.
And, uh, uh, folks should know that you can catch Chris Guessel, uh, on a regular basis on our IBD Live show as well. He's a frequent panelist there. Uh, so you can, you know, get up-to-date thoughts from him, uh, all the time there. And as I mentioned, on the show next week, uh, it's going to be great to have for the first time, Ted Jen and Connor Bates. Uh, they are both from Rever Asset Management. Uh, so Don Vandenborg, of course, has been on the show a number of times. He's been, been on IBD Live. Chris Guessel and I actually got to meet them in person in Las Vegas, uh, in October of last year, and we were like, "Hey, you guys should be on the show." And it, it took us this long to make it happen. So, going to be a pleasure to chat with them live at 5:00 PM Eastern, as we typically do on a Wednesday. So, we will see you then. Take care, everybody.