3 things I’m looking for in this market

The DOW was down over 700 points yesterday morning, as the market was rattled yet again by fears of another potential bank collapse… 

Credit Suisse Group AG (NYSE: CS) opened almost 30% lower as bank stress concerns spread and after the bank’s biggest investor said it couldn’t support the stock any longer due to regulatory restraints. 

All the premarket news and price action looked like we were poised for a wild ride of volatility… 

How did the doom and gloom picture play out in penny stock land?

Believe it or not…it was actually pretty slow. And I’ll explain why shortly. 

If you’re in the SteadyTrade Team, you know I find Wednesday to be the slowest trading day of the week… 

Experience will show you when you should push trades and when you should back off. And yesterday wasn’t what I would call a frothy day… 

So what do I want to see happen in penny stocks for me to get excited?

Here are a few criteria and examples of what I’m looking for… 

3 Things I Want To See To Get Excited

It doesn’t necessarily matter what the macro news headlines are, or what the overall markets are doing for there to be big penny stock movers. 

These stocks trade in their own little world… 

But traders need something to get excited about for them to jump into a stock and create the massive moves we like to take advantage of. 

We need emotion — excitement, greed, and FOMO. 

To generate that, most day traders like to see the same things… 

A Hot Sector 

Right now, SPACs are still hot. Ambipar Emergency Response (AMEX: AMBI) was one of them on Tuesday… 

It was a giant squeezer with no news. 

But it couldn’t hold its gains yesterday. 

So although we kinda have a hot sector right now, a stock still has to check a lot of the boxes to be a trade. And having news is one of those boxes. 

What I’d like to see to heat the entire sector up, is for one of these stocks to have news and a big spike… 

That should make short sellers nervous in any of the SPAC stocks since they can move together.

A Big Gainer 

A big percent gainer is one of the criteria we also look for in potential stocks to trade. 

Yesterday ThermoGenesis Holdings, Inc. (NASDAQ: THMO) spiked as much as 158% in premarket after it announced it’s rolling out a new facility. 

The Breaking News Chat team alerted the news. But a few minutes after the open, they also alerted that the stock was a chat pump. 

And like chat pumps usually do — it failed at the open. 

When a stock becomes a chat pump, I like to wait until 9:45 a.m. or later to enter a trade. And that rule would’ve kept you safe in THMO yesterday…

But you don’t have to be first to trade any big gainer or hot sector stock… 

Remember some of the best plays lately have been on day two, three, or four… 

So that brings me to another criterion I like to see… 

“Hanging Around” 

Both of the stock examples above had some of the things I look for in a stock — but not all of them. 

And neither of them “hung around.” 

Meaning, they didn’t hold near their highs…

And since some of the best runners I’ve seen lately are multi-day runners — they don’t have me too excited. 

So until I see a big gainer with news, preferably in a hot sector with high volume that can hold its highs… 

I won’t be over-aggressive in my trade plans. 

And remember what’s working in the market right now and what isn’t — I give you all the details in my weekly Market Update videos here. 

Have a great day everyone. See you back here tomorrow. 

Tim Bohen

Lead Trainer, StocksToTrade