Anchored VWAP and Moving Averages: Full Breakout Strategy | Brian Shannon

Welcome back to the Wolf Financial Show. My name is Goth Blackburger. I'm the CEO at Wolf and your host for today. And joining me after a couple a year or two hiatus off the Wolf show with me specifically is my great friend Brian Shannon. Brian is one of the masters in the world of technical analysis. I've got two of his books somewhere in this office over here that I've read cover to cover. So big fan of everything that he's doing. He really was a great introduction for me into a variety of ways to use moving averages and of course anchored VWOP. But we're going to cover today several different moving averages, EMAs, SMAs, how people should be utilizing them, what time frames, pieces like that, and then we're going to run through some charts as well and look at some of your favorite setups today. So, enough talking for me. Brian, how you doing? >> Doing well, Gob. It has been too long. You're right. Last time I saw you was live in New York uh a year and a half ago at the uh Stocktoberfest. Is that right? >> That is correct. Yes. It was at the Stock Twits Award event with that amazing comedian. Shout out. >> That's right. >> It was a good time. Yes. Yes. But great to have you back on the show. I'm super excited to dive into this. I think right now more people than ever are coming around to technical analysis. I even did a pod the other day with Brian Feraldi who you may have seen on X before who's a >> fundamental guy and I asked him I said hey do you pay attention to technical analysis? He said for years and years and years I didn't. He goes and now I've started. He goes it just shows you the mood of the market uh and determines you know at least in the short term where things are going and I think people have seen it can even do in the long term as well. So, let's dive right into things and maybe just, you know, if you could give a little bit of background as to why you started using technical analysis and where you see the value within, I think that'd be a good place to start. >> Okay. I'm just retweeting your tweet. So, uh, I was just looking for that and now we're out there. So, um, you know, I I I think the story of Brian Feraldi, I actually remember him at in an event that we went to where we first met that he was speaking there and he was heavily fundamental. And you know there's obviously anyone who has a closed mind to fundamental or technical analysis is really a fool in my opinion. They they both give us an indication of what is the market interested in. You know on a fundamental side I'm known for technical analysis. I have a chartered market technician and all that but of course I want to know what the company is. I mean I have you know that intellectual curiosity for number one but also when it comes to fundamentals though I'm not doing the deep dives into you know who are their competitors what's this ratio versus that ratio I want to know basically two things fundamentally one are they selling more stuff whether it's semiconductor chips automobiles you know barrels of oil whatever it is and two are they making more money doing that right it's it's about revenues and earnings And if they're making more money and they're doing better than expected, well, that's going to get the notice of the big growth funds. And the big growth funds, which there's thousands of out there, this is their this is their basket of stocks that they want to go after. So then I look at those and say or I might look find the chart first and then look at the fundamentals and say hey earning you know I look at my market surge chart and see revenues are up 45% earnings up 123% estimates for next year are plus 56%. It's like well now you know that's that's all I need to know from the fundamentals. It it it truly is because it tells me I have a pool of buyers that are interested in this. I don't look at that and say now I know everything I need to know fundamentally about the stock. It's that it's the crowd psychology just like technical analysis is. So I view them really similar and most people view them as fundamentals over here and technicals over here. They're really the same thing because what we're trying to determine is is there a pool of buyers out there who will be interested in this stock that might buy it after I do because that's what we need. We need buyers after us to make money. That makes the stock go up stock go up. Or if it starts going down and I look at my chart and say, "Hey, the fundamentals are great, but there's something wrong here. The stock's in a downtrend. I'm not going to be a buyer of this." That's just a foolish thing to do. And that was something, you know, early on in in the spaces that we did, you were often saying, "Hey, I like, you know, what do you think about this stock?" And it's a stock, you know, that was, you know, micron, you know, down 20 points and below a 20 day moving average. I' say, God, you know, save your money. Don't do it yet. And and that's, you know, the mentality is a a good company, it's on sale. It's at a discount. And I always always say, don't buy the dip, buy strength after. But then people are like, well, what does that mean? And that kind of doves tail dovetales into our discussion here about, you know, which moving averages, which VWAPs, and that sort of thing. Yeah, I think you hit it perfectly. If you want to share your screen, we can kind of roll people into showing on the charts because that is the question people have, right? When is it a dip? When is it back into strength? What is considered a bounce? What's not? And this market is probably one of the best examples, you know, ever of that when you do have these violent moves. And even on the indices, which we'll look at first here, and then we go into some individual stocks like Nebius, 30 to 35% moves on a one to two week basis back and forth. It just can throw you off. So I'll turn it over to you. >> Sure. I mean, so you look at the SPY, we're in an uptrend. There's just no doubt about that. So if you look at, let's start with a weekly chart. We're above all these longer term moving averages. We've got here the 20week, the 31, and the 42. And just a quick explanation on that. You know, most people look at the 40-week moving average as a replacement of the 200 day moving average. The market though has I think uh six half days each year or I'm sorry it's maybe three half days each year and then the market is closed uh for holidays on a Monday through Friday maybe six or seven times a year. So you're not really looking at you know the 40-week moving average is really more like the average of 191 days or so. So in order to really get that so so what I started doing was I I would have the 40week moving average on my weekly chart and then I go look at the daily chart and say how come my 200 day moving average is it down at 707 and my 40week moving average is at a different place and here you can see that we've got them basically in the same exact spot. So, I just like to see that time frame continuity. >> But basically on my weekly chart, we've got a rising 20, 31, and 42, which is basically the 100, the 150, and the 200 day moving average. When we're above those moving averages and they're rising, we're bullish. When we're above them and uh I'm sorry, when we're below them and they're rising, that means we're cautious. And this, you know, that was a serious correction that we saw earlier this year. So when you see the longer term structures start to break down as we did in there, then it's our cue to go down and look at the daily time frame. And on here I've just got some simple things which are, you know, some, in fact, I'll just clean it up a little bit. I wanted to talk about uh the moving averages that I use. I use the 20-day, that's that blue dashed line. The green dashed line is the 50, and the black dash line is the 200. And they're reference points. They're just something to compare price to. They're not, hey, it pulled back to this, so buy. Uh, I think you can, you know, look at a stock like Nebius and say, you know, well, do we buy the dip to the and and what I have on here just as an example is I also have this is the 21 EMA. Now, a lot of people like the 21 EMA. I like the 20 SMA. I'm going to tell you, it makes zero difference which one you use if you're using them properly. What you don't want to use them for is to say, "Hey, I'm going to buy the touch of the 21 EMA." Because if you did, you're buying Nebius right there and then it dropped down instead to the 20 simple. Does that mean the 20 simple is better? No. But you you saw you would have bought at 224 and it dropped 11 points down to 213. That's just today. So there's there's no reason to, you know, buy the touch of a moving average. That is just blindly buying. So when we look at that, you know, whether you use the 20 or the 21, they're going to be in generally the same spot and they're going to have the same slope. One time you're going to be convinced that the 20 SMA is superior. Other times you're going to say, "Oh, look, it got you rejected the 21 EMA." It's half and half. But if you use them as a reference point and say, "Okay, now I'm going to drill down to a shorter term time frame. drill down to a 15 minute time frame for instance and I look at this and say well we're below a declining fiveday moving average so I don't want to touch it but if I'm a day trader maybe I'll come in here and say maybe I want to buy a reclaim of the VWAP now I wouldn't buy that reclaim right here because it had just run from 214 to 222 so in other words it was extended it ran eight points but as it pulls back tests it and then to buy strength after that bounce with a stop under here for a day trade Now you look at it and say it's made these higher lows and that would probably be your exit point and if you really like it maybe you would be looking to re-enter if it bounces here with a stop under there or it just continues lower. So it so so I covered a lot there go I realize that and and the point is one don't be surprised when a stock like Nebius makes 9 and a half% move in a day. You know that's three quarters of its average daily range. It's got a 12 and a half% ATR. this is just this is not even a normal move yet. Um so you and it's a lot it's a lot of movement. So know what you're trading, right? Um but then you look at it and say um what you know what's your time frame? What's your objective? What's your goal? And you know people one thing I look at is you know buying breakouts uh you know that are extended. we can look at, you know, so so the semis have been the leaders in this market. And here's kind of what I've been looking for in here is that we got that move off of the Liupold low right here. And that's what this anchor is right here. That green is the Leupold low anchor. And you'll see that on all my 30-inut time frames. So we rallied up and then we did what? Well, we broke resistance and we were at the declining 50-day moving average. So, what's important is not just whether we're close above that 50-day moving average. Some people will say, "Hey, we closed above the 50. It's bullish again." And I'll say, "No, because the direction of the 50 says, be more careful than that and ask yourself, are you early to this? Is this truly a breakout and you're early?" Or you look at it and say, "It just ran from 500 to 600, 20% in three weeks." This breakout is likely a trap with that declining 50-day moving average. And then we look at this dash blue line and you can see that 50-day moving average is declining because this price is lower than this price was 50 days ago. Tomorrow it might flatten out the 50-day moving average. But unless the SMH starts to rally real hard in the next week, week and a half, this 50-day moving average, even if it's rallies back up to there, the 50-day moving average will be declining. So, I look at and say, what then is most likely when we have a declining 50-day moving average, it's not most likely it's just going to continue to do this. Doesn't mean it's not possible, but we're looking for what's probable, not possible. So we look at it and say you know normal trading activity you see a 20% rally like this you need to digest that gain. This is a normal healthy pullback. In fact over here you see I have you know this low to this high. This right here is a 38.2% retracement and we're trying to find support in there. What I thought we might do is rally up to the declining 5day moving average and then fall. So if we the the way I look at it is you know scenarios what you know what's most likely and this is what I had previously drawn in as well is that maybe we rally up to that 5day moving average kind of come down like this that gives this 20-day moving average time to kind of do this and then the as it consolidates in there then in a week and a half two weeks if we you know kind of pinball between here and rally up well now we're getting rid of this data Then we'll have the 20-day moving average back up through the 50-day moving average. And I think you could see a fourth quarter run into new all-time highs for the semiconductors. But they just need some time to heal to prove that they are healing and not that they're going to fall apart because the bearish scenario is we're below this declining 5day moving average. And if we get trapped up there underneath it and then see the next leg lower, well then we put the year-to- date anchored VWAP back into play and it might come in like this and then at that point the 200 day moving average probably comes into play and and there's nothing wrong with that. So the the thing is you just looking at it and saying, "Hey, I've got to buy the dip because it's at the 20 or the 21 EMA or because it's at the anchor from the year-to- date low over here." That's that green anchor. That's the year-to- date low. So, this is when you look at the daily chart, we've got this level of interest. The 20-day moving average often acts as support. It's starting to flatten out. It's the anchor off of the Leupold low. It's the 2/3 retracement of this. So, here's a zone where I'm expecting some answers to develop in the next coming days. I don't think it's a buy because we're still below declining 5day moving average. But the puzzle pieces are always being moved in front of us. You know, I liken it to a chessboard. You get up to go to the bathroom and you come back and you're like, "That's not where the pieces were. Who who moved Who moved? I think there's a book. Who moves my chessboard or something like that?" Um, anyways, you look at and say, "Okay, the pieces got rearranged. What does that imply for the next thing? If we rally up and get stuck below the five and then break below this anchor for instance, I would probably look to short there for at least, you know, a short-term trade, maybe even down towards that year-to- date anchor. So, I I look at it in uh, you know, SanDisk, they reported, you know, just incredible numbers over here. The stock gapped up and then sold off 30 40%. It came right down to that year-to- date anchor. Now, I didn't buy there because I I wasn't looking at it as a place to buy, but I looked at it and said, "Okay, now we're in this zone and I purchased some on the way up and make made a nice trade." And that, you know, so so you've got to look at and say, "What's the time frame?" Yesterday I So, I I I rather jump I hope hopefully this is not >> you're you're good. I have some follow-up questions whenever you're ready. >> Oh, yeah. Let's do that then because I can just keep going. If people want to be curious, you're talking about moving averages as a reference point, you know, not a determination, right? Saying, "Hey, when I see something, maybe it's depends on if it's sloping down, sloping up, coming down to a point." There there's a lot of reference points. Are VWAPs the same to you or slightly different in terms of how you determine them? >> They're pretty much the same is that it it you know, timebased is a moving average. Price, volume, and time is the VWAP. So I I'm a little bit more partial to the to the VWAP. So for instance, again, the anchor from the Leupold low. Well, for several days, people were feeling, you know, for for a couple weeks, people were feeling really good on average. Hey, I nailed it. And that's great. You know, the people who were buying over here on the way down who needlessly bought the weakness um instead of, you know, maybe breaking even. So you could put an anchor, let's say, from this peak. And and who knows, maybe that maybe we just stumbled into something. I don't know. I don't I don't want to just make up VWAPs, but you look at and say what what is a significant event? Something that really changed the perception of the market, either an earnings report, a wash out low based on a a major player getting, you know, blown out of the market on a margin call, um a Federal Reserve announcement. uh you know today in um mRNA >> you know just just and this this by the way is going to light the whole group on fire of the genomic stocks. We can talk about that after if you want. Um >> you know back >> I didn't see that move today. >> Oh yeah that's the biggest one in the group and >> 45%. >> Yeah. Um, just crazy that is. So, these are the mRNA stock or genomic stocks that that I have my list of and I've got them sorted in I thought I had them in um there you go by volume. So, you know, this is lighting the whole group on fire. They're up 143% but you can see in the group there's not a single stock that's lower. So when you see that it means it's time to go look at these charts and say is there something developing in this group because as we know AI is advancing you know biotech and science so they can make these discoveries at a much more rapid pace. That's why the XBI is breaking to a new high in here today. Um it it's not an all-time high but it's on track for it basically. Um there's the monthly chart of the XBI. So, you know, there's a magnet pulling it up to that. I think that >> So, just to be exact within there, you saw a giant move on one name within the industry. You look at the rest of the industry and see a lot of green and now you're looking at the other names for potential continuation into larger moves. >> Sure. And and so I so then I'll start to drill down. I realize this is a different, you know, we kind of transition to a different subject, but I look at TEMT, for instance, and I'll look at that and say, I don't know, we still have a declining 200 day moving average. And this line right here is where we were 200 days ago. So I look at and say, is it likely that this 200 day is going to flatten out and begin to rise? Well, in the next week and a half, yes, because or the next, you know, next three weeks, let's say. So in the next three weeks, as this data, higher data is averaged with a data over here, we're going to see that 200 day moving average flatten out. So, I don't think this one's, you know, maybe this one continues and it goes over here and does this so-called breakout. If it breaks out there, I think it's highly, highly, highly likely that it then pulls back. And, you know, it suckers people in on the breakout move because what they're looking at isn't two things. One, you know, the the stock just ran from 40 to 65 to break out. It just rallied 75% 60%. Um and you al can also see the measured move from 40 to 50. Let's call it 55. 15 points add 50 to here gives you an upside objective of 65. You know this is A to B. This is B to C and C to D. So a breakout there would most likely be met with selling. Then it can come in and stabilize on that 200 day moving average. Meanwhile, this is where we were 50 days ago. I see that 50-day moving average doing this. This is where we were 20 days ago. That's why this is coming up. So, you'll see them all start to develop out. So, when I see this stock, I look and say, okay, you know, the 200 day moving average is probably not ready yet. TEMT, by the way, is just the the levered one in case I want to do that. Then I'll look and say, well, are there any key anchors? And you see, I just popped one right on that high. And you can see that that's where we had previously found supply with that 200 day moving average in the same neighborhood. So, you know, I'll go down this list real quick and say that one's just garbage. It's still in a downtrend. Lower highs and lower lows. If I want to go for a leader, I want to look for something like this where PSNL, this one had been on my list. It was breaking from a nice consolidation edit. This one you look at and say, well, you know, this is probably just a little garbage stock really realistically, right? But it's a nice longer term base. And if the group lights on fire for the next, you know, six months, you could easily see something like this. It breaks out here, suckers chase it, it pulls back, builds a higher low, and then goes up to maybe the the next level of interest up in here. So, you know, I call that a level of interest because it just automatically jumps out of me. We saw support here, turned resistance. That would be the next logical place for it to go. So that would be like a little sealist name that maybe I would put on. Same with SA SNA here. This one ARCG of course um owns some MRNA. And this one you've got a declining 200 day moving average that just looks neutral. So nothing going on there. Nothing going on in here. Twist has been a major leader. And you know, did it bounce from the 20-day moving average here? Not really. Did it bounce from the 50? Theoretically, I mean, hindsight says, yeah, you could say that. Um, but in the moment when we test those moving averages or VWAPs, we look at and say, so I look at this one and say, you know, it's likely to come into supply in this zone on beam because it's the orange year-to- date anchor. It's the declining 50, it's the green anchor off of the year-to- date low. And yeah, that doesn't become. So it's a quick process of elimination and you know TXG is in a beautiful uptrend. Um this crisp is a um genomics mod you know gene editor. >> So maybe you know they they kind of get lumped in with mRNA. So does DNA but you know back here I thought maybe it could do that instead. So so here's a great example of what I just drew in. I drew in something similar on DNA back here, thinking, okay, it's going to run up, break out, and this this isn't a setup. This is, you know, left over on my charts from a previous drawing. I thought, okay, I will get interested in it. Not on this breakout because it it just ran from 7 and 1/2 to 11 12, but I wanted to see it pull back, find some buyers in here, and then likely buy here with a stop under there had it developed. Instead, it just failed. And you know it's very similar to AVGO was on my list this week that I wanted to buy. This was actually on Friday that I was looking to buy AVGO but I was concerned we had lower highs and lower lows as I have sketched in. So I was looking for AVGO to do something like this to get that 5day moving average to curl under and then to buy strength. Instead it went down. It undercut what was to be my stop. I took it off my list and I don't have to be involved in nonsense like this. >> I think the one other name just on this screen is Nerra because they just had that big bump. I think it was somebody like Ducken Miller or somebody >> Oh, he owns a bunch of this one. Yeah, you're right. It is. I I think I think I read somewhere that it's his largest position and like super concentrated as well. So, no surprise it's at alltime highs and got a super constructive chart. Yeah, they had a they didn't have a huge move off it today, but two 3% which was kind of interesting. When you see something that's continuing to just run up and you know break out like this, how do you view that chart? >> I I just look at as bullish and you know I I look at and say what do I want to do? I want to look at and look at these consolidations similar to what I just saw with AVGO and notice that it gapped up and you know what's the anchor from the gap. So, while we're showing these lower highs in here and then we break some support, I often look at that and say, "Well, this could be a shakeout, so don't take it off my list." But instead, when it's down in here, I might set an alert at 312 or something like that to say, "Hey, it's back. It didn't, you know, I don't have to watch it every day because it might have done what AVGO did." So, instead, I'll set an alert and say, "Okay, now it's coming back. We've got that fiveday moving average flattened out. My job then is to buy as it breaks above it makes a higher high above that flat to rising 5day moving average footnote if it's not extended when it gets there. So I'll look at today for instance and today we have this move and it gapped up. One of my rules is if it gaps up to daily R2 then I generally take it off my list. I will treat it as a day trade. But if I was looking to buy this, I would use my chase the gap or wait for VWAP strategy. And that would would maybe have gotten you in right here more likely on this bar. So you probably would have had to chase it a little bit or to buy the bounce from the VWAP right here like we just spoke about on a different stock with a stop under here. So I would look at it and say the stock is extended, but it looks great on these other time frames. So for now, I'm going to treat this as a day trade. If it rallies up, let's say I bought it right here with a stop under there, I'd say, "Okay, that's my stop." Um, and if it starts to rally up and breaks a new high for the day, I'll sell maybe a quarter or a third of that. And then what I would do, go, is actually say, now I'm going to transition this into a swing trade, and I'm going to lower my stop down to here because I've taken some risk off. I've lowered my average cost basis from here to maybe right here by taking that first piece off that first third. So now I can look at it and say now that it survived as a day trade, it's breaking new highs, it's not extended on, you know, this 15minute time frame for instance, if a reasonable place for a stop is here, the higher low below the rising 5-day moving average. So I treat it as a scalp until it can prove to me that it can survive as a swing trade and then if it starts to rally in the next few days then what I want to do ideally is you know if it does uh let's just you know so I my mind just automatically sees these scenarios. one, I, you know, sell a third, it comes down, I get stopped out. It's basically a very, very small loss because I've taken that third off. Or two, it does this and it starts to see, you know, this 5day moving average rally like this. >> And then what I'll do is as it makes this high, this high, and this high, I will raise my stop up under this low, this this higher low right here. So, higher highs and higher lows. This is the higher high. That becomes my higher low. When it makes this higher high, that becomes my higher low, etc. Like this. And that's what I was doing with, you know, XBI was higher lows. Take a third off right here. It still held though the 20, I'm sorry, the 10day and the 20-day moving average. So, this is kind of what I sketched out. And it's, you know, behaving well because you want to sell some, as they say, when you can, not when you have to. when you know when it falls apart and you're scrambling with everybody else trying to get out of your stock because it didn't do what you thought it might do. You got involved early before the momentum was in there. So again, I'll slow down. Yeah. >> Yeah, this is great. A few questions off it. One, do you have an average holding time or is it completely different? Is it sometimes a day trade, sometimes a swing trade? How do you think about that? I prefer not to day trade and that but but you know I I've been doing this long enough I'm I'm I'm pretty decent at it when I sit down and concentrate on it but I didn't take Nera because it wasn't on my radar but I would look at that and say that's a day trade for now if it if this it's up to the stock not to me now in a stock like that where I'm buying it because of momentum in the group but if I had my own setup in a stock where I'm buying the stock like uh NEOG which I'm involved in. If I bought this stock over uh what price did I buy it? 11:58. So I think I bought it on this day over here as it was making that uh no 1158 must have been right here. Um I didn't wait for this higher high because I thought it would be extended. So I got involved here as it came down made a higher low at that rising now rising 5day moving average. And these are where I have this was my original my original stop was here. But I told people, you know, if you're not comfortable with that one, put it under here or underneath this low on the daily time frame. But these are my stops now. So I've raised it up under here. Ideally, I'd love to see, you know, maybe even I I don't care if it pulls back. If it pulls back like this and then makes a higher high at this point, then I'll raise my stop up under there. And that takes all my risk off because I sold my first quarter piece uh for a gain of 22. Now I've got my stop at 1151. My cost is 1158. So I've essentially taken the risk off. This stock is in a you know good group. Uh you know biotech. It looks like the weekly time frame it might have the potential. Well, this isn't a price target, but I just look at and say, where does it have the potential to go before it might find a source of supply that's likely to provide resistance? And you know, that's this prior level of support. So, it's not a price target, but it seems like it could do that. So, I want to give it the proper room to manage my stop on the shorter term time frame and, you know, reduce my risk along the way. >> How do you determine position sizing? >> That's a good question. I a lot of times it's you know the it's quality of setup and if I so I always start with do I view this as an A-list idea a B-list idea a Clist idea an A-list idea I go extra heavy so realistically like this one it's I have a good size in it but it's a biotech that I don't know anything about and biotechs can just implode on you so I have no idea what they do other than it's got a great constructive chart it broke you know, broke this resistance, pulled back and tested it. It's got a rising 20 above a rising 50, above a rising 200. The XBI is positive, but I don't know anything about it. So, I bought a decent size position. If this was a tech stock that I knew something about it had the same setup, I would go probably 150% long on this one or I might buy the stock and buy some call options. you know, that's and then once the stock starts to rally and I've paid for my call options with the stock, then I'll sell enough of the stock so that the profit from that is now given me the options for free. And then I'll start managing the stock by itself and I'll manage the options with a little bit looser risk management. So, it's not always the same, in other words, but it starts with the quality of the setup. you know, is there something weird about the stock like being a biotech? I don't It doesn't make it weird necessarily, but to me, I don't know anything about it, so that's points off. Um, if the biotechs, if the XBI was in a downtrend, I'd say, "Yeah, I probably just pass on this. I don't care if it's a good setup." I don't know anything about it. It's whatever. I don't even know what it's called. Neoen. I I have no idea what they do. Um, genetics, I would imagine, but uh, you never know. Um, so what is the current psychology in the market? What's the group? You know, do I want to buy Micron heavily on a pullback when we still have this overhang from uh Liupold? I'm hoping maybe Micron can come down to the anchor from Liupold low, stabilize in there, maybe even shake out a little bit. Then the fiveday moving average flattens out. Then we build a higher low on the daily time frame. Maybe in, you know, sometime middle of next week. We build that higher low and then we can go break to new all-time highs. >> Appreciate that. And it's a good insight as well, especially as somebody that is mainly using technical analysis, but sometimes putting in some of the fundamental pieces as well. When you place the trade, are you you're placing the stop loss immediately together with that trade, putting it into place? you know, um I've been doing it long enough. I don't actually set the stops. Um if I'm if I get up away from my desk, then I might set stops. I might I might set, you know, like like I showed on this NEOG, I might have a tight stop on partial. So maybe if I was going away, I'd say I'll, you know, I've got a threequarters position left. I'll put a quarter stop here and keep my half down there. What my what my real plan is though if it breaks out is that's where I'm going to look to sell another quarter. Not necessarily just on the breakout, but what I do there is then I'll switch to a two-minut time frame. And on that two-minut time frame, as it's breaking out right here, I think who's who's buying this breakout? It's it's not the most educated person because it just rallied from 11 to 13. it just rallied, you know, 20 21 22% uh to to get to this breakout point. So, that's not the educated money. Let's not call them dumb money, but and uneducated. So, I want to look at that and say if the momentum starts to stall in here, and we'll talk about Bitcoin in just a moment. I'll look at a two-minute chart. And if the two-minute chart looks like this as it's approaching that level, then I'll say I'm going to set my stop. And when I say set my stop, as I'm watching it, as it starts the very first trade, I have a new two-minute bar right here. On that very first minute trade, that first trade, my stop goes under there. If the stock continues to move higher and then it makes a new trade right here on a new two-minute bar, I raise it up right here because I know I'm in a level where it might find supply, but it doesn't mean it will. So, I want to give the benefit of the doubt to the momentum and then if it breaks, boom, I sell that quarter I I sell that quarter position right here and I'm I'm totally cool with that. Even if it turns around and goes to $15 per share that day, I honestly do not care. Um, so because I've still got a half of my original position, but this is just prudent trimming into strength. And who knows, maybe it runs up there on a daily basis like this, starts to pull back and sets up really nicely like this. I haven't been stopped out of that other half and then the 5day moving average looks like this. I might buy that half position back that I've already sold. And it you might say, well, you know, wouldn't it have been better to just hold through here because no, we don't know that it's going to recover here. It might have just completely failed, right? So, everyone always looks at the chart in hindsight and says, "Well, if you bought there, why did you sell some there? Because now it's here. And why'd you buy it back at that?" Well, because that price that I bought is lower than what I sold. And we've got a new momentum campaign. And that's what I'm involved in. We didn't get destroyed over here because you might have looked at AVGO and bought that one thinking that, hey, it's in an uptrend. It's got this great looking daily chart. Again, people have that tendency to look in hindsight and say, "Oh, I I would have done this." No, you wouldn't have. >> Yeah. Let's take a look at a few crowd favorites. You did mention Bitcoin. I would definitely love to see your thoughts on the Bitcoin. >> Yeah. Let's uh let me pull that up on Trading View because I don't have that here, but Trading View is, you know, it's a great example because this, you know, great uh I'm sorry, Bitcoin is a great example, not Trading View. So on on Bitcoin, what I've been talking about here is that, you know, well, one, if we go back to this, this is the 200 day moving average. It's declining. So do you think it's a coincidence we're finding supply in there today? >> Might need to reshare. >> Oh, is it not sharing? Um, okay. >> Uh, >> I just have you switch at the bottom of the screen. >> Yep, there it is. Got it. >> Okay. So, here we were just looking at some moving a one one anchor. Uh, but we've got a 20, a 50, and a 200 day moving average. So, the 20 and the 50 have been crisscrossing, showing indecision. All right, the 200 is still declining. So, longer term, technically, we're still in a downtrend. So, when I see that happen, I do not expect us to make it up through there. Not, you know, not in a way that's going to hold. Instead, I would look for I'm not as good at drawing on here. Let me see. I don't remember where the drawing tool is. Um, I think I have it actually down here. Here it is. So, I would think that, okay, maybe it rallies up a little bit more. And then in the next month or two, that 200 day moving average starts to flatten out. Then we've got the 20 and the 50. And now we're in a position similar to where we are over in this area. This right now, it's a nice bounce up to the 200. And maybe we're just going to need some time, and that's fine. So, that's the way I look at this Bitcoin move that it's not a surprise it's finding supply right here. It's also at the anchor from the uh February low. We had previously what what I was talking about in on Twitter just last week was that we've got the anchor off of the February low and we're we're finding buyers in there. And I I said, you know, here, so this anchor is actually, if we turn this to a weekly time frame, I don't want to confuse everyone by, you know, switching time frames so much, but that's the anchor off of the 2023 low, 2022 low. >> And it also happens to be and and I've I've been, you know, this is an ongoing discussion on my Twitter. It it's also the 61.8% retracement of the move from that low >> to the all-time high. 61.8% 8% retracement pulled in perfectly with the anchor off of a significant low. So that's where I said, you know, I think it's made a durable low, but just because it's made a durable low doesn't mean it's, you know, turned to an uptrend. It's got a maybe tradable bounce. And I pointed out this morning on X that, hey, be aware. Last time it rallied up to this anchor and found sellers. Maybe it'll do it again. But it didn't. And you look at this two-hour chart now. Oops. Um this two-hour chart and we're running into not only as I said the anchor from uh the low this year, but as we saw that 200 day moving average. So this is a natural place for a move that got super extended very quickly up 67% to just take a little bit of breather. Now we look at it and say don't chase this thing but let's look for some normal consolidation. Maybe it's going to pull back and start to do this and that would be you know that would be great for the stock >> or crypto >> that for Bitcoin I say the stock you know what I mean. So you know and then what we can do actually go is we can say well this move began where? Well if we anchor it to this low and then we do a handoff to there maybe it pulls back and this anchor you know starts to catch up to. So it's it's all about anticipatory analysis not chasing and getting excited. Hey broke above the 200 day moving average. Absolutely useless information for a a new purchase. It's got so extended to get there. So, always ask yourself, where has it come from? Has it expended too much energy to realistically be able to continue to go higher? Just like a breakout in NEOG at 1280, whatever it is, uh 1285ish. Um I want to sell into that strength, but I don't want to just sell because it touches that number. Instead, you drill down to a shorter term time frame. You say, "Okay, let's use a 15minute time frame." And as soon as it makes a higher uh a lower high on that 15 minute time frame, that's where I'm going to sell a portion of it. Not because I think the move is over, which I mean it might, but if the move is over and it just completely fails, I would feel like an absolute fool for not selling some into this outlier move. if it pulls back, consolidates, and I might buy that back over here and say, "Okay, now my stop on that portion is underneath this pullback low." So, I can't really get hurt. I'm I'm I'm raising my average cost, but I'm not buying into strength the way people do. I'm not averaging up in the traditional way of I'm going to buy some here, buy some here, and buy some here. Instead, I want to buy after >> a shakeout, a resumption of strength, and then have my stop under here. So that, you know, I bought I locked in that much better. So even if I get stopped out on what I purchased back, I'm still better off for selling up here. >> I love it. I I want to do one more chart, but before I do that, just a quick question for you. What's one thing or two things that you think if more traders just did this one thing or learned this one tactic, it would really really help them in their trading? >> I I'll give you two things real quick and and and one is just stop chasing moves. Ask yourself where has it come from and where does it reasonably have the potential for supply? The 200 day moving average, you can see right there it was it was dead on. doesn't mean it will again, but you look at it and say, "Okay, it, as I said on my tweet this morning, it's at this anchor where it previously had supply and it got rejected hard." It doesn't mean sell. It means stop chasing up in here, okay? And, you know, start to think of your exit strategy to sell at least partial. Don't sell a whole thing. But everyone thinks in in full units is one thing that they do. They think I'm all in or I'm all out. I'm this big gunslinger who does it all at once because I'm so good. And that's just ridiculous. Allow yourself some grace and allow it to say, "Hey, you know what? If I sell some up there and then it doesn't pull back, well, that's okay. I still have a the majority of my position." And the the thing is most of the time you'll see it will pull back into the, you know, from those zones. It might not destroy the trend that's emerging here, but it'll give you an opportunity to say, "Hey, didn't that feel good to take some off now as it pulls back maybe down to 65, 64, who knows?" You're not looking and going, "Oh, should have, could have, would it?" Like you were, you know, when it touched the 200 over here and it drops $15,000. So, you know, look to move in pieces and ask yourself the questions, where has it come from? >> You know, it it rallied good. where does in has it expended much energy which this has in a short period of time. So some normal profit taking just makes sense. Then you're going to have other people say it's at the 200 so we're going to short. So the 200 what happens you know understand the psychology of these moving averages that that that's a good one because we started out talking about moving averages is that you'll see it rallies from 62 to 6970 and people who are you know buyers down here say hey it's coming up to the 200 day moving average. One I'm not going to buy anymore because it just had this move. So that's lack of demand. Two is I'm going to start to sell a little bit because the I know the 200 day moving average often acts as resistance. So I'm going to sell a little bit into that zone. More supply, less supply, more demand just from that action. Then you're going to have somebody else do this, you know, come to the same conclusion in the same spot uh from the anchor off of the February low and say, "Hey, it's up to that anchor. I'm gonna sell some." And then you're going to see there's short sellers who say, "Hey, that's a fivestandard deviation or whatever move it is." Those typically get, you know, pull back 50%, so I'm going to sell short into this zone because it's a fivestandard deviation move. It's at the declining 200 day moving average, which is often supply. So, I'm going to add supply there. So, it all comes together. And if a lot of people are coming to the same conclusion except for the knuckleheads that chase this stuff and say it's going to a million by the end of next year then you look at it and say okay I'm going to you know be prudent here and I'm you know less supply less demand and more supply in this area it becomes a self fulfilling self-reinfor moving averages become self-reinforcing they don't become self-fulfilling because they don't always behave a certain way in the same area. So long answer to your question is, you know, don't chase things. Where have they come from? Where do they reasonably have the potential to go and start to take take a little bit off thinking, you know, scaling in and scaling out rather than all in all all out. >> I like that. We do need to wrap up here, bud. Last chart I'm gonna have you do, and this is specifically because, you know, some people look at this chart, they think fundamentals, but we're looking technicals, and that is going to be SpaceX. >> Okay. Yeah, this it's I mean, it's been a a master class in technical analysis for a number of reasons. So, let me just uh share that with you and let me know when you see it. >> Yeah, we've got it. >> Okay. So, SpaceX, a couple things. One, everyone hated it. you know, it was way overvalued, but it just kept rallying. And when it broke the anchor from the IPO, in fact, let's just do this on a shorter term time frame. Um, when it broke the anchor from the IPO, that said, the average participant from the very first trade in this stock is now losing money, right? Then it came down to where? It came down to the 135 level where it came public. So, it came down to that, but it still was lower. So, we we saw it rally up above that 5day moving average, but the five was still declining. So, I was looking to saying, well, maybe it can do something like this and get the energy to break above that VWAP and, you know, surprise a lot of people. Instead, it continued lower. And notice how that five-day moving average trapped it all the way down to here. And then what happened? Well, we had all the chatter over in here. There's no, you know, SpaceX is going to 85. It has to because of this lockup and this lockup is coming. The market is going to get flooded with new supply. But the market already priced that in. So, earnings got released. The lockup came came to fruition. It made a lower low, made that higher high above that rising 5day moving average and then rallied right where picture perfect into the anchor from the IPO. Then it pulled back to where? To the 5-day moving average, rising 5-day moving average and rallied again into the anchor from the IPO. Now, what do we see? We see that the pattern is we have a lower high and a lower low and another lower low below that declining 5-day moving average. So now the sellers are in control. I would say that it's likely, what we want to do, of course, is put this anchor on here is that it's likely to come into this zone next. And this is, you know, maybe undercut uh I keep drawing. There we go. Maybe undercut the um IPO price of 135, come down to the anchor off of this low, and then start to rebuild, and then we'll see where the next move is. But right now, the sellers have it and it's going to take it to, you know, just to get back above the 5day moving average kind of makes it neutral from a swing trade perspective. And then if it breaks above this anchor and can hold above it, that's the key because let me just talk about Cberus. This one had been locked below that anchor from the IPO and then it gapped up. You don't chase that gap. Then it failed. then it rallied and just all over the place in here. This one's just been a disaster. Whereas other names will go right to the anchor from the IPO and they will just get smashed in the head by it. And you know this stock XE perfect. Um you look at um uh BRUN, this one perfect almost perfect. I mean it gapped up on earnings, people got excited. It was at the declining 50-day moving average. the anchor from the IPO. No one should be surprised when it gets hit on a gap like that. Um, MMED, this one could be like Cberus in that it ran up and it's consolidating. You know, just getting back above it doesn't mean the buyers are back in control until it starts to develop and say, "Okay, now we've got these higher highs and higher lows." Um, BRUN is one to keep an eye on. Not that one. Um, what was it? uh BSP BSP broke the anchor from the IPO, had this huge rally, got pul, you know, pulled back into it. Now, this one, if it can stabilize in here a little bit, maybe it makes another move towards that 50 level. Um, but anyways, I I I always do that. I go off on tangents because this stock reminds me of that stock, which reminds me of that stock. Um, but that's kind of what I see for SpaceX in here. >> Love it. Appreciate the breakdown. And yeah, that is pretty cool how well it held and definitely shows why people should be using some of these anchored VWAP pieces. Uh Brian, it's been a master class here for 50 minutes. Uh there's so much more people can get from you. Where's a good pace for people to find more of your content, insights, daily charting, pieces like that? >> I you know, I I just always send them to uh uh Alpha Trends on X. So most of most of the people are either there already or uh that's where to go. >> Well said. Well said. People can also find your books. uh also through I think your bio right on >> on Amazon uh too. The books are on Amazon. >> Fantastic. And I I encourage people to go ahead follow check along. Brian posts a ton of great charts uh great insights. Always a pleasure having you on. Uh you can go ahead and unshare if you'd like. Yeah. Perfect. Any final comments for the audience before we wrap up today? >> I think we said it. Just you know don't think in full pieces all the time and don't chase these things. look at where think in terms of probabilities not possibilities. >> Yeah, I think I think I definitely even personally got some great takeaways today. One thing that really resonated with me was I do see a lot of people looking at breakouts but never accounting for how much has it had to run to get to that point where it's breaking out. I think that that's that's a great piece for people to focus in on. Brian, thanks so much for doing this with us today. Looking forward to the next. >> Cool. Thanks. >> Thanks for watching today's video. If you enjoyed it, go check out the Wolf Financial Newsletter. Did you know that we make a ton of content? We host 60 plus hours of Twitter spaces and live streams every single week. We're posting on the timeline over and over and over. We put up YouTube videos and one of our prime gems is our newsletter. And it's free into your inbox multiple times a week. We [music] mix it up. We give stock picks, market headlines, research, info. It's a great way for you to stay in touch with the stock market and your portfolio without having to spend eight hours a day staring at your brokerage screen. So again, link is below. It is free to grab and you're going to love the content in