We came into yesterday’s Warlock’s World live stream with a plan in hand.
Stick to trading VWAP on stocks that have either reported earnings or have high volume.
Even though earnings season is winding down, VWAP still works well on stocks with high volume.
And in this current headline driven market, it’s almost perfect.
One thing I teach my Warlock’s World community is the power of the contrarian move.
It’s why we play the fade on gapped up stocks that have reported earnings.
And also why we look for the raise on beaten down stocks.
Yesterday before the market opened, stocks out of China were gapped up on some big headlines.
I don’t really care about the news in particular, only how they are affecting stocks.
One of the most gapped up? AliBaba (BABA).
So the plan was to look for the fade at the open.
BABA fades after the open on Wednesday
After the first minute, BABA broke VWAP to the downside at $91.62.
Mere moments later, the stock was trading under $88. That’s a quick way to pick up more than $3.50 per share on a short to start the morning.
BABA retested VWAP to the upside, broke through, and charged over $106 per share!
Disciplined VWAPians were prepared to trade either side of BABA today, taking what the market offered us.
But for once, yesterday wasn’t about ME and how I’m the GREATEST trader on the planet.
Because Wednesday was ALL about 8-Baller trading the Fed with Garrett Baldwin in the big room!
The FOMC tends to bring a TON of volatility, and I couldn’t think of two better shepherds through this craziness than these two.
Look at just ONE of the trade ideas that 8-Baller delivered on.
8-Baller’s chart is a thing of beauty
The Invesco QQQ Trust (QQQ) failed to reclaim VWAP and fell $6 – blue line to orange line on this chart.
After chopping around the multiday VWAP for a few minutes, QQQ got off the mat and started to move to the upside as Fed Chairman Jerome Powell was talking.
To quote 8-Baller: “Shorts are in trouble.”
QQQ started screaming higher before briefly consolidating under VWAP.
Shorts are in trouble.
After breaking above VWAP, QQQ had what 8-Baller called an “orderly pullback” to VWAP almost to the penny.
The Qs held this level and continued to march higher.
Shorts are in trouble.
At the end of the day, QQQ rose $12 off the FOMC lows!
If you were waiting for the VWAP break to the upside, the Qs added $7 from this level!
This is the kind of insight that 8-Baller brings to Warlock’s World every day.
And that’s why I’ve tapped him on the shoulder to fill in for me for the next two days while I’m in Las Vegas!
That’s right, Warlock’s World members are about to have MORE 8-Baller, MORE Solid Jello to keep YOU busy while I’m gone!
So be on your best behavior, because I have Eric and Boom taking down names of anyone who gets out of line!
Wish me luck on the slots, VWAPians!
Kenny “The Warlock” Glick
March 17 2022