Recapping My Trading Year For 2017

I ended 2016 and started 2017 with a big focus on uranium stocks.  This was because they were ripping out of a Stage 1 base on huge volume towards the end of 2016.  Uranium stocks had been destroyed for the last 5 years so this had the potential to be a monster trade.

The stocks did well for a few months and by taking some partial profits I made money on some of my uranium positions.  But I also held onto a few uranium miners too long as the rally started to fizzle out in March and gave back some profits.  I ended up moving on to other sectors as the uranium miners eventually broke down and went back into a Stage 1 base until the end of the year.

I made huge profits in gold miners in 2016 which enabled it to be my best year performance-wise since I’ve been trading.  But fortunately using my Stage Analysis system I avoided gold miners for the most part in 2017 as they were simply drifting sideways in a consolidation the entire year.  Even when many were turning bullish on gold in September I looked at the charts of many gold and silver miners and saw no volume increase that almost always accompanies a new rally.  You can see that in the chart below of GDX where even though it started rallying back then volume was still well below average.  By avoiding gold miners I was able to trade other sectors that were in strong uptrends in 2017.

One of the other mistakes I made early in 2017 was being a little too focused on uranium.  This made me miss some awesome Stage 2 breakouts early in the year in stocks like AAOI and SQ (shown below).  If I would have diversified and taken trades in those stocks when they broke out, I could have added to those positions at the same time I cut back my uranium positions.  This was a good lesson to learn in that if you see multiple sectors breaking out then there’s no reason not to take trades in each of them, since it’s impossible to know which rally will be stronger.

I applied this lesson for the rest of 2017 and it worked well for the last 4 months of the year since there were so many sectors breaking out such as tech stocks, bitcoin-related stocks, cannabis stocks, and some commodities producing stocks towards the end of the year.

DAIO was my biggest winner for the year and a stock I detailed in the Real Trading Report.  I made money in every stock I discussed on the Real Trading Report in 2017 except for INTT.  This included the tech stocks TEAM, TWTR, COHU, and NVMI.  Many of these stocks have pulled back since November but by selling and taking partial profits on the way up I was able to capture gains in these stocks.  For example for DAIO I sold shares in the 13s, 14s, 15s, and 16s on the way up and now it has pulled back to the 12s, but it is still above the 30-week MA.  If I had not taken profits on the way up then I would have left a good portion of my gains on the table.

Bitcoin was another lesson learned for me in 2017 because I totally avoided it.  I did make some money on some bitcoin related stocks but even then I let a little bias against Bitcoin derail me from staying in longer on some of the trades.  The lesson I’m taking away from Bitcoin:  just trade the charts, fundamental opinions on any market are totally worthless.  It’s amazing how many Bitcoin experts there are now compared to 12 months ago when no one cared about Bitcoin, and the only reason for this is because of what has happened on the chart.  If you apply Stage Analysis properly you can get in early and profitably trade any market, including a totally new asset class like Bitcoin.

For example if you look at the chart of GBTC below it broke out of a beautiful Stage 1 base in May, then consolidated and broke out again multiple times.  Even as late as early November it had another nice consolidation from which it broke out from and more than tripled, and that was after Bitcoin had made some monster gains for the year.

Even some of the “Bitcoin” stocks which many could be nothing more than scams could have been traded easily with a system like Stage Analysis.  If you look at RIOT below it broke out of a beautiful Stage 1 base in late September.  Then consolidated for a few weeks and had another monster run after breaking out above the 8-9 area.

The last two months of 2017 the biggest winning sector besides Bitcoin has to be cannabis related stocks, and fortunately I’ve been all over this sector.  I highlighted ACBFF in a post in November and this stock has blasted off along with stocks like TWMJF and APHQF, all three of which I traded.

This sector has been a great example of how stocks in a hot sector break out at different times, I’ve traded probably at least 10 other cannabis related stocks over the past two months since so many of them have broken out of bases but not at the same time.  When I’m scanning and evaluating stocks in a sector I’m always on the look out for stocks that haven’t broken out yet if they are in a strong sector where most of the other stocks have already moved.  A strong sector can lift all boats including stocks that lag, and sometimes the lagging stocks can turn out to be just as big if not bigger winners than the initial stocks that start breaking out first.

I recorded a cumulative 50.4% gain for my trading in 2017 which was 31% higher than the S&P 500 at 19.4%.  The most important lessons I’m taking away from 2017 are:

  • Taking partial profits on winning trades is an absolute necessity
  • If multiple sectors are breaking out of Stage 1 bases diversify across them.  It’s possible some won’t work out while others will, but impossible to predict
  • Just trade the charts and the Stage Analysis system, they can be applied to any market and have no bias
  • Opinions, fundamental analysis, and predictions are not useful and should be ignored

I have no predictions for 2018 and I would highly encourage anyone reading this to ignore every single prediction they read anywhere since none of them are necessary or helpful.  For example no one predicted what happened to Bitcoin this year but that wasn’t at all necessary to make money on Bitcoin.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.

Interview With The Next Bull Market Move On Bitcoin, Gold, And Uranium

I had the pleasure to be part of a year-end interview series on The Next Bull Market Move.  Below is a reprint of the interview, and I would highly recommend checking them out for more upcoming interviews!

Hi Justin, welcome back to The Next Bull Market Move. It’s been a while since we last spoke and as it’s nearing the end of the year I thought it would be great to get your thoughts regarding the markets in 2017. Let’s start with Gold. It looks as though we are still consolidating since the run up we had last year and sentiment is looking bearish. How is Gold looking to you?

Gold is still moving sideways right on top of its 30-week moving average. The gold stocks are acting slightly weaker than gold if you take a look at GDX or GDXJ.  They are both trading more below their 30-week moving average than gold.

Silver is also acting weaker than gold which typically isn’t a good sign. One thing I have noticed is how the volume has collapsed in GDX and GDXJ as this consolidation has dragged on.  That can be a bullish sign as volatility and volume often collapse before a market moves higher, especially for a market that has been basing for a while like gold and gold stocks.

I’ve been out of gold and gold stocks all year and I don’t see any reason to be in them until we see them move above the 30-week moving average on increased volume in a new Stage 2 breakout.  Until then I’ll keep monitoring the situation.  Certainly we could see things change dramatically at any time.

Let’s move on to Uranium. Over the last few weeks it looks as though the sector wants to break out, your thoughts?

After the Cameco production cut announcement we’ve seen almost all the uranium stocks move above the 30-week moving average on increased volume.  This includes Uranium Participation Corp. which tracks the price of uranium.

I like how the volume in that fund is actually heavier than it was during the breakout in uranium stocks we saw around the same time last year.

We are at the point now where the rubber needs to meet the road in uranium stocks.  We’ve consolidated around the 30-week moving average after the initial breakout.  If this is a real breakout it should start to move higher again over the next couple weeks.

If it doesn’t it will be a higher chance that this a fake breakout and the market will consolidate sideways for a while longer.  It’s definitely not abnormal to see multiple fake breakouts in a Stage 1 base, that’s what wears people out until the real breakout happens.

What has been the biggest surprise of the year for you? Bitcoin comes to my mind.

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I’m simultaneously surprised and not surprised at all by what has happened to Bitcoin over the past year.  I am surprised by the amount of money that has poured into it, I never fathomed over 300 billion dollars would pour into this asset class.  It has also been a lesson for me because I made a fundamental judgement on Bitcoin back in 2012 that has kind of kept me out of being interested in trading it.  Basically I decided that I didn’t think it had any intrinsic value so it couldn’t be considered a real form of money.

What I should have done was just traded it like any other Stage 2 breakout and I could have captured the biggest winner of 2017.  I’ll definitely learn from that for the future.  What I find unsurprising is that humans have blown another bubble, we seem to love to blow bubbles periodically and this is yet another example.  In my lifetime I’ve already experienced the Internet bubble, the housing bubble, and huge parabolic moves in other assets like oil and uranium.  My lesson learned from Bitcoin is to just trade the chart like any other asset class and apply the Stage Analysis system.  It would have worked beautifully on this huge move in Bitcoin from 2015 until now.

Which sectors in 2017 have done well for you? And what lessons have you learnt from this?

I took some good profits on uranium stocks at the start of this year when they were exploding higher.  But I also let a few winners turn into losers, I used that as another learning experience.  Besides that I’ve done very well in tech stocks over the last three months of this year.  I’ve been discussing real trades I’m taking on my website since September and you can see some big winners I identified if you go back and look at some of my posts at www.nextbigtrade.com.

This has proved to me again that I have a system that I can trade any market with, and that’s a big advantage because every market goes in and out of favor.  I want to be always focused on the markets that are in favor, and in particular getting in early on new uptrends.

I think it’s interesting that certain elements of the trend analysis you follow are designed to be logical and non-emotional, that it’s based on a few key indicators that provide a guide, but that the market itself is emotional and irrational.  Do humans generally get in the way of winning trades and investments?

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Humans are wired to sell their winners short and let their losers run.  This is the exact opposite of winning trading.  This happens because most people have no system to trade the markets so they become a slave to their emotions or whatever biases they have, or they just follow a guru who has no system either.  You have to have a system that lets winners run and cuts losers short to be successful trading the markets, and I’ve found that using simple trend following like Stage Analysis is the easiest.

And as a final question, what are you looking forward to in 2018?

I’m looking forward to applying the Stage Analysis system to the markets again next year and seeing what markets that takes me into.  Or if we get a bear market next year I should be in cash and preserving my capital. Either way I will be trading what the market gives me.  One other thing I continue to focus on is position sizing since I think that is another great way to manage risk besides having a stop loss signal.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.

Uranium Stocks Reawaken After Cameco Cuts Production

At the end of 2016 and the start of 2017 we saw an explosive breakout in the uranium miners, but that rally flamed out and the uranium market went back into a Stage 1 base.  After that failure from about May of this year until the last couple weeks the uranium miners drifted sideways and volume dried up, signalling disinterest in the sector but a general balance between buyers and sellers.  Recent news out of Cameco cutting 10% of world production in uranium caused a flurry of activity in the uranium miners and the price of uranium.

One of the most bullish aspects of the uranium miners that I haven’t seen discussed anywhere else is the positive divergence between the miners and the price of uranium that continues to this day.  Take a look at the charts of U.TO and URA below and notice how the uranium miners (URA) have put in 3 minor but important higher highs (denoted by the circles on the chart) at the same time the price of uranium (U.TO) was making lower lows.  Often this type of action is seen in market bottoms where further declines in the commodity fail to produce lower lows in the commodity producer.  This means the shares of the commodity producer have shifted into stronger hands, they are no longer willing to sell even if the underlying commodity continues to decline in price.  This is what leads to explosive Stage 2 breakouts because once demand comes back in there is literally no one left to sell, and the stocks start ripping higher.


U.TO took fairly good volume last week doing 3x average weekly volume.  The volume in URA was also over 2x average volume on the previous week.  The bigger the volume on a Stage 2 breakout the better, and if we continue to see increased volume in these over the next few weeks that’s a good sign.

I took initial positions in UEC, URG, and UUUU to play this potential new Stage 2 breakout in the uranium miners.  I’ll be watching the price action as always and using the 30-week moving average as my risk management line and indicator of whether to stay in the trade.

Checkout my new Stage Analysis Screening Tool at: http://screener.nextbigtrade.com

Checkout my trading videos on Youtube

Twitter: @nextbigtrade

The original article and much more can be found at: http://www.nextbigtrade.com

The views and opinions expressed are for informational purposes only, and should not be considered as investment advice. Please see the disclaimer.

Interview With The Next Bull Market Move On Tech, Gold, Uranium, And Learning From Failure And Success

I recently had the opportunity to do another interview with Kerem at The Next Bull Market Move.  I would highly recommend subscribing to his site as his interviews are in-depth and contain a lot of great content.  Below is a reprint of our interview where we talk about gold, uranium, tech, and learning from both trading failure and success.


Hi Justin, welcome back to the The Next Bull Market Move. You recently released an update on the Uranium sector (click here to see) and I wanted to know if you feel this sector this still needs to consolidate more before a big break out? And if the market does breakout do you think it will a quick speculative move, or something more steady and characteristic of a sustained stage 2 uptrend?

I think the best way to look at the uranium market or any market is to evaluate what is happening right now, and then decide what you will do if uranium goes sideways from here or starts to breakout higher.  According to Stage Analysis the price of uranium is still below the 30-week moving average and the moving average is declining, so that’s a Stage 4 downtrend.  Some of the uranium miners however have started to break above the moving average and are acting stronger than the price of uranium.  This kind of price action tends to precede breakouts, but unfortunately in Stage 1 bases you can get false breakouts time and time again until the real breakout occurs.

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This is basically what happened earlier this year when we had a ferocious breakout on big volume but it faltered and the uranium miners gave up most of their gains.  You’ll notice though that the stronger uranium miners like NexGen have held onto a good portion of the gains even with the big pullback.  I interpret that action as bullish as well because that shows that big money is not bailing out on the better stocks even with uranium prices weakening again.

It seems to me like the uranium price is putting in some type of floor, but I don’t know how long this bottoming process will play out.  I don’t think the uranium miners will do much until the price of uranium resumes a Stage 2 uptrend.  So that’s the key indicator for me to get heavily involved in this sector again.  But when it does we could see a monster bull market in the uranium miners since they are so depressed and highly leveraged to the uranium price.

What’s your view on gold and the mining equities? It appears to me that we have been range bound for quite some time now. Has gold found a bottom yet?

Gold is similar to uranium right now in that we are starting to see signs that something might happen, but it’s not quite happening yet.  I think that’s a key distinction you need to be able to make to use a system like Stage Analysis properly.  You have to be able to interpret the chart for what it is, not what you think it should be.

If you look at GLD and GDX they are both chopping sideways above and below the moving average but not breaking out yet.  That’s Stage 1 basing action. I do like the fact that the price action seems to be tightening which is often what happens before a big breakout.  Also you are seeing bellwether stocks like NEM breaking out above the moving average this week.

It’s curious how poorly gold has reacted to the recent sharp move lower in the U.S. dollar.  That’s something that usually doesn’t happen, but the relationship between the two isn’t always negatively correlated.  If you look at the commodities sector as a whole through the GCC ETF, I think we are in a Stage 1 base that is going on 2 years old now. So if the dollar is in a new bear market now which is very possible, a new breakout in commodities overall would also greatly strengthen the bull case for gold and uranium.

Tell me something that the markets have taught you this year.

This year you’ve needed to be a good stock picker to outperform the major averages.  A lot of performance of the indexes this year is due to the big tech stocks like Facebook, Apple, Amazon, and Google.  There have been some big winning stocks no one is talking about though like AAOI and SQ, both of which had beautiful Stage 2 breakouts.

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2017 is another good example of how important it is to be in the leading sectors of the market to really outperform.  If you’ve been in the right tech stocks this year you’ve had a great year or maybe some foreign stocks.  Meanwhile commodities, small cap stocks, and transports are all flat to down this year.  You have to be able to adapt and trade what the market is giving you.

Let’s talk about silver briefly. It seems investors have completely lost interest in silver and pretty much given up hope of ever seeing $50+ for an ounce. When no one wants to buy, this usually marks the beginning of a move that will surprise most investors, so will silver ever break out into a stage 2 uptrend?

Silver will certainly have another Stage 2 uptrend.  I’m watching silver right now just like gold and other commodities markets.  You’ve seen a year long consolidation now from the 2016 breakout in precious metals so we are definitely setting up the conditions for another Stage 2 uptrend.  I’m not getting involved again though until I see it breaking out on the chart, there’s no reason to get involved before that.

Within your investing career, what’s the biggest lesson you’ve learnt through a failure and through a success?

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Losing money in the markets is the best way to learn since it forces you to act differently or keep losing your money.  Earlier in my trading career I would make a bunch of money and then give it all back in a bear market since I had no respect for managing risk properly.  Bear markets also moved me to a trend following approach because I wanted to be able to decisively determine whether to be involved in a market or not.  I’ve found fundamental analysis to be too nebulous, with Stage Analysis I have a simple system and rules to follow and I can make money in bull markets and avoid bear markets.

In my opinion if you get lucky and catch a bull market and make a bunch of money, you’re not smarter or better at the markets than you were to start with if you don’t have a system or rules for managing risk.  You’re actually more dangerous to your own account because you have “free” money to trade with and even lesser respect for risk.  So “success” in the markets is an odd thing because if you’re following a system and managing risk and taking small losses, you’re actually being successful.

So to boil it all down to me learning through success means following your rules and keeping your account and mind intact by limiting your losses in bad markets. Learning through failure is taking a big loss in the market because you didn’t manage risk properly.

And finally, which markets are currently attracting your attention?

Technology stocks, especially those involved in semiconductors/IoT/fiber optics still have a lot of strong looking charts.  Many of them are working on their 2nd or 3rd pullback to the 30 week moving average though so they are already further along in their bull market cycle.  The volume in these stocks continues to be explosive which is a good sign.

Other than tech I’m keenly watching commodities sectors like gold, uranium, and copper and anything that is starting or could be starting a new uptrend.  My number one objective is to get involved as early as possible in an explosive Stage 2 uptrend, no matter what the sector is.

I highly recommend visiting The Next Bull Market Move for more quality interviews from a wide variety of guests!