Yesterday was a pure algorithm session where nothing really took place in too many trade set ups. Of the 252 trading sessions we get each year, those like yesterday are the toughest because you so badly want to find the one rainbow which usually winds up being a forced vision of something that is less appealing than would be on another day when opportunities are robust.
CDRBQ went to the grey sheets which is kind of a blessing since that falling knife could have bled all over some traders who were not familiar with such a trade. XGTI was way overbought in the pre market which was a reason why it wasn’t alerted, but since the session wound up being such a boring one, it wound up getting the bulk of the attention for a run-and-bag as shares dropped hard into the after hours.
XGTI is due to be one of the most shorted stocks on the market today along with CLRB.
There is nothing on the OTC that can compare to RCPI at the moment and because of that, it’s undoubtedly #OnWatch heading into today’s trading session. Over half a million dollar traded on Monday’s session and the “double-bottom” to the 52 Wk Lo of 0.15 was revisited which, while it usually would have little meaning to it being an OTC ticker, has some significance which makes it play worthy.
RCPI shares traded has recorded very decent volume on a daily basis for well over a year now. But when the 52Wk Hi of 1.20 was recorded on November 19, less dollar volume traded in comparison to yesterday ($438K vs. $537K). This 99% drop in under 6 months, 98% drop in just the last month, has a very good amount of padding for those who are willing to get in at or as close to the 52Wk Lo as possible.
Rock Creek has been putting out news consistently enough to make believers of their business model think they are into something big. However, be advised that RCPI used to be STSC, Star Scientific, which got a warning letter from the FDA back in December, 2013, for taking orders for products which included an ingredient, anatabine, without filing a premarket notification with them. The delisting from the Nasdaq and 1:25 reverse split came a little more than a year later which proves they are using the company as a share issuer.
There’s only 314.8M shares authorized from what is viewable, but there is no way only 24,220,400 shares outstanding. As it may be (or not), bidding 0.016 with a plan to have to grab more if that 52Wk Lo breaks would be the best way to approach RCPI. Mathematically speaking, entering at 0.016 and exiting at 0.03 might not sound appealing, but when you factor in that volume, this could almost qualify for a “Bet The Farm” kind of play.
Europe is simply too weak with Grexit and Brexit on the table to force any stimulation that can help push a bullish sentiment into this last week of May trading before the 3 day weekend. ES Futures were dragging down to the 2040 level which we’ve been visiting for two weeks now and, since the open of European trading, has yet to break past the lows of Monday’s session.
With that said: SPY PUTS are undoubtedly on the table today.
The downward trend of the last few weeks has a perfectly set up Head & Shoulders which began in the beginning of April which followed with an inverted Head & Shoulders where we ended up yesterday. The failure of this pattern to hold up, could result in a drop down into the 202 – 200 range, especially with all the fears of an interest rate, Donald Trump as President, and the annual “Sell in May” tradition all combining for somewhat of a perfect storm.
If 204.80 breaks, there is no support below it to prevent a drop which could test 200. Essentially, SPY needs to break 205.80 and push to 206 “with conviction” for a true breakout to occur. If that does happen, be sure to start looking at SPY PUTS for next week.