This wasn’t the busiest week for the stock market.
Volume is still light, and even with this week’s Apple Inc. (Nasdaq: AAPL) event and the new CEO of Amazon.com Inc. (Nasdaq: AMZN) pumping the stock on cable, the FAANG names aren’t trending.
You can only trade the market in front of you, and it’s far from sexy right now.
So the big joke among traders is that this is a great time to take a vacation.
Sideways markets aren’t always exciting, but like the one we’re seeing now, they can be treacherous.
That’s because a lot of the names you’ll see move when things are slow are junk meme stonks…
And more often than not, those tickers are moving for all the wrong reasons.
Don’t Get Caught Sleeping By the Junk Meme Stocks
Now when I say “meme stock,” I’m talking about names that are usually newer, often have flimsy business fundamentals, and are wildly popular because of word of mouth on social media forums like Twitter and Reddit’s r/wallstreetbets community.
This past week saw names like SmileDirectClub Inc. (Nasdaq: SDC), ContextLogic Inc. (Nasdaq: WISH) and Nikola Corp. (Nasdaq: NKLA) hit the tape with small- to medium-sized bets over and over.
These tickers also tend to be super volatile and can blow up a trading account in no time flat. They’ll catch attention from the trading apes, get pumped “to the moon” as they say, and then dump them on the garbage heap… leaving the chasers holding the bag.
The massive price fluctuations have become so common that it can be hard for the uninitiated to know the difference between the apes and the big boys…
But when you see the orders, it’s pretty easy to tell that these are retail and not institutional order flow based on the trading size and target.
When it comes to trading the junk meme stocks, it’s best to steer clear of the pump-and-dump cycle. I prefer to focus on trading the institutional order flow like the JetBlue Airways Corp. (Nasdaq: JBLU) I featured in Thursday’s Blitz Daily. If you’re looking for more expert guidance, be sure to check out my Weekly Blitz Alerts and the Daily Profits War Room strategies.
In the clip from the Daily Profits War Room, I explain the difference between the price action in Harley-Davidson Inc. (NYSE: HOG) from the junk meme stocks and watch me as I have to talk myself out of taking a line on an old favorite that’s moved into meme territory.
P.S. Many traders, through no fault of their own, are leaving hundreds… even thousands of dollars on the table.
Every. Single. Weekend.
And they don’t even realize it.
Like on Friday, June 4, someone who knew this secret could have grabbed a 486% winner over the weekend… a week later, those weekend profits could have snagged an incredible 610% win…
Which is exactly what I did!