Categories
Smash Or Pass

Earning Financial Freedom | Smash Or Pass Stock Market Edition

Welcome to Austin’s Smash or Pass Analysis, where we give Stocks the glorious “Smash” or dreaded “Pass”. Austin, our CEO and Founder goes live every Monday 5PM EST and takes us through various stock picks called out from the live listeners, and I, your guide, Meta Matt, will provide you with a breakdown of these choices.

Every Monday 5PM EST

A Reflection on Life’s Challenges and Trading’s Purpose

In a heartfelt moment during the stream, Austin opened up about a deeply personal experience. He shared that he had to make the difficult decision to put down his 15-year-old dog the previous week. The emotion in his voice was palpable as he described it as “one of the worst experiences” he’d ever had. This event, although painful, led him to reflect on life’s purpose and the significance of what they do in the trading community.

Austin emphasized that the situation made him grateful for the financial stability he has achieved through trading. He stressed the importance of trading and financial education in enabling individuals to attain a level of freedom where they don’t have to worry about making tough decisions due to financial constraints.

As he recounted the painful experience of having to put his beloved pet down, Austin underscored that he didn’t have to agonize over whether he could afford the procedure. This, he explained, was a testament to the value of financial freedom.

He then delved into the fundamental reason behind their trading endeavors: the pursuit of freedom. Austin shared that, for him, it wasn’t just about trading for trading’s sake; it was about creating a life where he didn’t have to work for someone else, where he had the financial flexibility to do what he wanted without constantly exchanging hours for money.

Austin’s passionate speech about the importance of trading and financial literacy served as a powerful reminder of the goals many traders aspire to achieve. It’s not merely about making money in the markets; it’s about achieving a level of financial freedom and security that allows individuals to live life on their terms.

He stressed that, ultimately, trading empowers people to make better decisions about money and that everyone starts from a place of not knowing. Austin’s journey began with a desire to learn, and he has dedicated himself to sharing his knowledge and experiences with others.

Austin’s message was clear: trading is not just about charts and strategies; it’s about creating a future where financial concerns don’t dictate one’s decisions. It’s about acquiring the skills and knowledge to navigate the world of finance confidently. And, perhaps most importantly, it’s about a community that genuinely cares for its members’ success and well-being.

As Austin concluded this heartfelt reflection, it was evident that, for him and many others in the trading community, the pursuit of financial freedom and the ability to live life to the fullest is at the core of their trading journey. Now let’s dive into Austin’s “Smash or Pass” picks!!!

SMASH OR PASS: Stock Market Edition

HOOD – Tasty Smash! Our first pick on the menu is “HOOD – Tasty Smash!” Austin’s excitement is infectious, likening this stock to a perfectly seasoned burger. While the volume might not be ideal, sometimes you have to savor the flavor of a stock. Trading below the weekly trend support? No worries; keep an eye on the range between $8.83 and $10.22; it’s a strong accumulation zone, like the secret sauce that holds it all together.

UBER – Pass, unstable and possibly toxic… Next up is “UBER – Pass,” and Austin doesn’t mince words. This one’s as unstable as a Jenga tower during an earthquake. That ominous Head & Shoulders pattern on the weekly chart is downright scary. It might be best to steer clear of this ride for now.

CCJ – Smash! Super sexy above $36 Now, let’s talk about “CCJ – Smash!” This one’s super sexy above $36, reminiscent of James Bond – smooth, sophisticated, and ready to break out. With the RSI at 72 to 77, it’s got the swagger to make it to $42.

MA – Smash up to $434! “MA – Smash” is spicier than a jalapeño. With Fibonacci levels, bullish momentum, and talk of reversion to the Golden Mean, it’s a gourmet dish with a dash of magic. Austin’s eyes are set on $434, maybe even $500. This one’s a wild ride, so buckle up!

ET – Tasty Smash! “ET – Tasty Smash” is screaming bullish on the monthly. It’s like a secret family recipe that always hits the spot. Going from $4 to $15? That’s some serious flavor. Energy companies like this one are the future’s gourmet stocks. It’s time to dig in.

NIO – Pass, but you’re hot and let’s stay friends… “NIO – Pass” – it’s like running into an old flame at a high school reunion. Austin’s disappointed with the monthly chart, but there’s still potential. As long as it keeps above $9.50, it might just rekindle the fire.

BBY – Pass…No, I don’t want GeekSquad protection for a year… “BBY – Pass” – it’s that tech retailer that’s managed to evolve, unlike some. Earnings are on the horizon, but it seems like they’re getting a bit rusty. Time to pass on the GeekSquad protection, I guess.

ROKU – Smash, baby! Austin serves us “ROKU – Smash” – it’s an absolute banger, smashing targets left and right. It’s like that chart-topping hit that you can’t get out of your head. Testing support at $75? Get ready for the encore at $80.

MMM – Peaked mid-30s, Super Smash! “MMM – Super Smash” is like a superhero in the stock world. With a range from $99 to $178, it’s got potential written all over it. Don’t miss this long-term options trade opportunity.

And there you have it, a flavorful tour of Austin’s Smash or Pass. Remember, Austin’s live trading streams are every Monday at 5 PM EST, so join us for more entertaining and insightful stock market adventures.

Check out our “Smash or Pass” Channel in the discord fora full breakdown on all these and more: https://discord.gg/pennybois

Austin’s Stock Market Breakdown

We’ve delved into Austin’s lively “Smash or Pass” session, and now it’s time to roll up our sleeves and dive deeper into his insightful analysis of specific stocks. Remember, trading isn’t just about gut feelings and lucky guesses; it’s a strategic game of observation and calculated moves. Let’s talk about some of the stocks Austin mentioned during his stream, outside of the “Smash or Pass” section.

NVDA (NVIDIA Corporation)

Austin turns his attention to NVIDIA Corporation, ticker symbol NVDA. Here’s his breakdown:

“We tested support today and closed above the crucial level. Our consolidation phase is in full swing, with NVDA trading comfortably between $450 and $475. As long as it maintains this range, we have a promising setup for a potential push back up to $500.”

SPY (SPDR S&P 500 ETF Trust)

Next on Austin’s radar is the SPDR S&P 500 ETF Trust, widely known as SPY. Here’s what he observes:

“We find ourselves trading once again in the channel we’ve previously mapped out, ranging from $435 to $446. Today, we made a strong move back into neutral-bullish territory, marked by RSI convergence on the hourly chart. My outlook is positive; I anticipate we’ll continue this trajectory up to $446. If we happen to open between $441 and $443, I’m keen on $445 calls, with at least a three-week expiration.”

TSLA (Tesla, Inc.)

Now, let’s shift gears to the electric vehicle titan, Tesla, Inc., with ticker symbol TSLA. Austin’s analysis goes like this:

“We’ve witnessed a bounce off long-term trend support, extending from the beginning of 2023. TSLA is currently eyeing the reclamation of the $250 to $253 range. If this level is achieved, I foresee a rally that could take us all the way back up to $300. Notably, we’re seeing decent volume and RSI convergence, accompanied by higher highs and higher lows. In the short term, it’s crucial to push and maintain above $245 to pave the way for the $250 target.”

AMD (Advanced Micro Devices, Inc.)

Advanced Micro Devices, Inc., or AMD, enters the scene. Austin provides a comprehensive analysis:

“Our attention now turns to AMD, where we’re closely monitoring a price range we’ve previously outlined, stretching from $102 to $113. We’ve experienced a supportive bounce off the 200-day EMA on the daily chart. However, it’s imperative that the price remains above $102. On the weekly chart, the situation presents a slightly different picture. We briefly dipped below trendline support but rebounded off the 34 EMA. As long as we stay above $100, I’m inclined to consider a trade that could reach $113, and perhaps even $125. The long-term trendline support resides around $97. Should we approach the weekly trendline support, I’d like to see consolidation between that level and $102 before a robust push upwards. We’re also keeping an eye on volume – we need about 100 million, almost double our current levels, to really make things happen.”

UAL (United Airlines Holdings, Inc.)

United Airlines Holdings, Inc., represented by ticker symbol UAL, comes into focus:

“While we still maintain long-term trend support, it’s worth noting that we recently closed below the 200 EMA on the weekly chart, accompanied by lower volume. Despite this, I remain optimistic about this position, provided we hold onto our trend support.”

SHOP (Shopify Inc.)

Shopify Inc., ticker symbol SHOP, also garners Austin’s attention. Here’s his perspective:

“We executed our plan well, hitting the $71.36 resistance level precisely as intended. Subsequently, we witnessed a drop to our lower support. I’m currently focused on RSI over the next few weeks; it’s above 50, which is a good sign. To further bolster our case for a strong upside move, we ideally want to see RSI climb above 60. It’s essential to remember that we’re dealing with a robust liquidity zone spanning from $71 up to $136. In just six weeks, we saw it plummet to this level, which suggests that the price can exhibit similar velocity on the way back up.”

LABU (Direxion Daily S&P Biotech Bull 3X Shares)

Austin completes his analysis with Direxion Daily S&P Biotech Bull 3X Shares, known by the ticker symbol LABU:

“We’ve got an intriguing Double Bottom setup on our hands. There’s a notable RSI divergence on the daily chart, where RSI has bottomed out while the price remains slightly higher. As long as we don’t violate the low at $4.25, I’m looking to execute half my position, potentially targeting $6.11. I’ll take off some risk at that point while holding the rest with an eye on the $7.50 mark.”

Empowering Traders to Find Their Direction

In his stream, Austin took a moment to address a crucial aspect of trading education: self-sufficiency. He emphasized that their goal was not just to provide stock picks or trading setups but to empower traders to become self-sustaining and self-supporting in their trading journeys.

He likened the process to putting together a complex puzzle. The first step is to gather enough pieces of information to draw a conclusion and set the right direction. Once led in the right direction, traders can start assembling the pieces to become self-sufficient in their decision-making.

Austin encouraged traders to actively engage with the educational content, treating it like a university class. He urged them to take notes, draw on charts, and capture screenshots to solidify their understanding. By doing so, traders could build a foundation of knowledge that would enable them to navigate the markets with confidence.

He acknowledged that many traders in the community had already reached a level of proficiency. With this proficiency came the ability to identify key elements in a chart or trading setup. Austin believed that the members, particularly those with experience, should be able to recognize critical factors and make informed decisions independently.

Using the example of AMD, he illustrated how traders could leverage their knowledge to anticipate price movements. He highlighted the importance of long-term trend support, emphasizing that even during harsh market sell-offs, these established trends often held strong. This, he explained, could present an excellent opportunity for traders to make informed decisions, whether it be taking long positions, buying calls, or betting against the trend with put options.

Austin’s message was clear: self-sufficiency in trading is attainable through education and experience. By dissecting the charts, understanding price action, and recognizing pivotal moments, traders could enhance their decision-making abilities.

Furthermore, he emphasized the importance of considering options expiration dates, emphasizing that understanding how a stock typically moved over specific timeframes could guide traders in choosing the most appropriate options contracts.

Austin’s dedication to educating traders went beyond just sharing trading setups; he aimed to equip traders with the skills and knowledge to navigate the markets independently. His commitment to empowering traders underscored the ethos of the trading community—a place where members help each other grow and succeed.

In closing, Austin acknowledged the role of grief in life and expressed gratitude for the unwavering companionship of his beloved dog. He spoke to the pure, unconditional love that pets offer—a love free from complications and drama. This heartfelt moment served as a reminder that, ultimately, trading is about achieving the freedom to live life on one’s terms and to cherish the moments that truly matter.

Every Monday 5PM EST
Categories
Market News

Robinhood to Repurchase Shares Confiscated from FTX Founder, Sam Bankman-Fried

Robinhood, one of the most well-known retail brokers in the United States, has announced that it is in ongoing discussions with the US Department of Justice to acquire the $575 million worth of its shares that have become a sought-after asset in the wake of the collapse of crypto exchange FTX. This move could provide Robinhood with a unique opportunity to gain a larger foothold in the crypto markets and greatly enhance their presence in the sector.

Sam Bankman-Fried, 

the founder of FTX, purchased 55 million shares of the broker back in 2022, which amounted to 7.6% of the company. However, since his crypto empire declared bankruptcy in November of that year, the ownership of the shares has been the subject of much debate.

Robinhood is aiming to acquire the equity from the justice department at its current market value, which took possession of the stock in January as a potential outcome of illegal behavior.

The timing of any acquisition is incredibly unpredictable as it depends on the results of various court proceedings that assert ownership of the shares. 

Aside from the Department of Justice (DoJ), several other entities have lodged claims against Robinhood shares, including Bankman-Fried himself, units of FTX, and BlockFi, a cryptocurrency lender that declared bankruptcy. According to BlockFi, Bankman-Fried pledged the shares to them as collateral days before FTX collapsed. Robinhood has cited the buyback plan as a sign of its confidence in its future

On an earnings call on Wednesday, 

chief executive Vlad Tenev stated that they believed the decision would be beneficial in the long run and reduce any worries of the shareholders. He said, “We believe it will be accretive over time and removes a distraction for shareholders.”

The board of directors’ suggestion to purchase back stock arrived as the fourth-quarter results indicated an increase of 5 percent year-over-year to $380 million, as the greater interest income compensated for the decline in trading amounts.

Tenev cautioned regarding the possible consequences of regulatory proposals from the US Securities and Exchange Commission, which may endanger its current zero-commission approach by making it more difficult for market makers such as Citadel Securities to compensate Robinhood for its customer orders. This could negatively impact the company’s current business model and could force them to look for alternative ways of generating revenue.

Will these changes and proposed moves help keep Robinhood a step-ahead of WeBull? 

WeBull has recently made some key upgrades to its platform, including Fully Paid Securities Lending (FPSL). Robinhood currently offers FPSL to its customers, but now that WeBull has made this a feature for all of its customers, will there be a migration from Robinhood to WeBull? WeBull, by and large, has a much better trading platform than Robinhood, and it allows its users to do everything Robinhood does. So why stay? In the coming months we may see a shift of Robinhood users over to WeBull.

In conclusion, 

Robinhood’s move to acquire the $575 million worth of its shares from the US Department of Justice is a strategic decision that could provide the retail broker with a larger foothold in the crypto markets. The company’s CEO, Vlad Tenev, has stated that he believes this decision will be accretive over time and will remove any distractions for shareholders. However, the timing of the acquisition is uncertain due to ongoing court proceedings and claims by other entities. In addition, Robinhood’s zero-commission approach may be endangered by regulatory proposals from the US Securities and Exchange Commission, which could negatively impact its current business model. As the competition in the market intensifies, with platforms such as WeBull offering key upgrades, Robinhood will need to stay ahead of the game in order to maintain its position in the market.

Categories
Trading Guides

How to Day Trade With Less Than $25,000 – A Beginner’s Guide

So you want to be a day trader — deftly moving in and out of trades and racking up gains every day. But according to regulators, day trading is forbidden unless you have a minimum equity of $25,000 in your account. Is there any way you can day trade with less than $25,000?

The good news is, like most things money-related, there are plenty of loopholes and workarounds that can help you fulfill your day-trading dreams without having a ton of dough in your account.

In this guide to day trading with less than $25,000, we’ll share our favorite tips and tricks. But first, let’s cover a few basics about day trading.

Day Trading for Beginners

Simply put, day trading is a strategy that involves opening and closing a position within the same trading day.

For example, you could buy a stock position with your morning coffee at 9:15 a.m. and then sell it while enjoying a late-afternoon snack at 4 p.m.

Day trading has grown in popularity since online trading has become a “thing.” After all, many discount brokers like Robinhood and Webull charge zero fees to execute a trade. And thanks to high-speed internet, it’s easier than ever to make lightning-fast trades.

As you can imagine, day trading is highly speculative — after all, you’re betting on volatile trades. And a lot of day traders end up losing more money than they make.

To be successful as a beginner day trader, you need to develop a strategy to manage your risk.

Many day traders look for momentum stocks that are experiencing big catalysts like surprisingly positive earnings announcements. Others study charts of trading volume to find breakout plays.

Some of the best day traders decide before even entering a trade what their exit point will be. This helps remove some of the risky emotion from the trade. There’s no “just hold on a bit longer to see what happens” allowed.

Whatever strategy — or proprietary blend of strategies — you adopt, there are some rules to day trading you must understand.

FINRA’s Day Trading Rules

The Financial Industry Regulatory Authority (FINRA) defines a “pattern day trader” (PDT) as anyone who makes four or more day trades in a five-day period in a margin account. In addition, those trades must make up more than 6% of your total margin trading activity during those five days.

And the rules to day trading state that a pattern day trader must maintain a brokerage account balance of at least $25,000.

If you act as a pattern day trader — making four or more trades in a five-day period in a margin account — and do not have at least $25,000 in your account, your broker will flag your account. This could lead to you being prohibited from purchasing stocks or other securities for a 90-day period.

What’s a Margin Account?

Whoa, Nelly! Let’s hold up there for a minute and check out a super-important term: margin account.

A margin account is a brokerage account in which you borrow cash from your broker to purchase stocks or other assets. You need to have a minimum deposit in your account to use as collateral (Robinhood and Webull both require a minimum of $2,000, but some trades require more).

It goes without saying that you’ll also need to pay interest on your margin loan.

Because you use borrowed money when you invest on margin, you get leverage for either bigger profits… or losses. Margin allows you to grab bigger returns if your position appreciates in value above the interest rate your broker charges.

On the flip side, if the value of your trade decreases, not only will you be in the red and have to pay the broker back, but you’ll still have to pay the interest on top of that.

However, day traders tend to thrive on risk. They love the idea of magnifying their profits. So a lot of them use margin accounts for their trades.

And when a brokerage identifies you as a pattern day trader, you’ll get to trade with additional leverage to make even larger bets.

How to “Day Trade” Without $25,000

So if you’re willing to take on the risks of day trading but don’t have a margin account with $25,000, how can you begin?

Luckily, there are several loopholes to get around the PDT requirement.

Use Our Cash Account Trick

Our favorite way to day trade without becoming a pattern day trader is by using a cash account, rather than a margin account.

Of course, you won’t get the advantages of leverage that a margin account can give you.

But on the plus side, you won’t have to worry so much about FINRA’s PDT rule.

Here’s how to do it:

First, set up a cash account. Many Pennybois members like to use Webull, since it offers great tools and a very beginner-friendly interface.

Wait for your funds to settle. This can take two or three days. You’ll receive a notice from your broker saying that your funds have settled.

This is important: You must have 100% settled funds before proceeding.

Once your funds are settled, you can start trading. We recommend spreading your total funds over three trading days.

Use 30% of your funds to trade on Monday, 30% on Tuesday, and 30% on Wednesday. Keep the remaining 10% as a reserve.

Let’s use a theoretical $1,000 investment to show how it’s done.

On Monday, you take $300 and make six trades at $50 each. You lose two trades but win four and end the day with a 10% gain. It takes about two or three days for your cash to settle from your trades. So on Wednesday, you get back $330 to trade on Thursday.

On Tuesday, you do the same thing with $300 and make more gains that you’ll receive on Thursday to trade on Friday. And your Wednesday gains will have cleared in your accounts for trading by Monday.

But don’t forget that on Thursday you can put in that $330 you made on the previous Monday and potentially turn that into more cash. Rinse and repeat.

This way, you can keep compounding your gains and rolling them over to another trading day. Each week, you get to make a total of 30 trades.

And since you’re using a cash account, you don’t have to have $25,000 in your account to begin. (Of course, after doing this for several months, you might end up with that amount anyway!)

Day Trade Beyond the U.S. Stock Market

One way to get outside FINRA’s rules for day trading is to get outside FINRA’s jurisdiction. One way to day trade without becoming an official PDT is by investing in foreign stock markets that don’t have pattern day trader rules.

To do this, you’ll need to set up an account with a broker that’s also foreign. And keep in mind that trading on foreign markets can be very risky.

You can also work around the PDT requirement by trading on other markets such as options, futures, and the foreign exchange (forex) markets.

You can also work around the PDT requirement by trading on other markets such as options, futures, and the foreign exchange (forex) markets.

Remember that FINRA defines a pattern day trader as someone who makes at least four day trades within a five-day period.

If you open accounts with multiple brokerages, you can make several day trades spread out across your different accounts.

For example, you could have a Robinhood margin account and a Webull margin account. You could make three day trades in your Robinhood account and three in your Webull account every five days.

As you can imagine, this could get confusing quickly. So it’s not an ideal solution.

Swing Trade

Instead of opening and closing positions in a single day, use a longer timeframe. Swing trading involves profiting from price movements over a couple of days or weeks. As long as you hold a position overnight, you’ll be categorized as a swing trader, rather than a pattern day trader.

This is a good strategy for folks who don’t want to sit glued to their monitors all day. And although you may not see huge gains, it can also be a safer strategy than making rapid-fire day trades.

Frequently Asked Questions

How many day trades can you make?

The Financial Industry Regulatory Authority (FINRA) defines a “pattern day trader” (PDT) as someone who uses a margin account to make four or more day trades within a five-day period. If you make more than that and don’t have $25,000 in your account, you could be penalized.

Why don’t PDT rules apply to the futures market?

The futures market is regulated primarily by the National Futures Association (NFA) and Commodities Futures Trading Commission (CFTC). These regulatory bodies don’t have the same account requirements as FINRA.

The Bottom Line

Day trading can be an exhilarating — and profitable — experience. But it’s not without its risks.

On top of the volatility that comes with this strategy, there are also regulatory risks.

If you try to day trade on margin and don’t meet the pattern day trader minimum of $25,000 in your account, you could be cut off from making trades for months.

Try “day trading” with our cash account strategy. By compounding your gains, you could turn just a little bit of cash into a tidy profit.