Today's Losers

More familiar names. These all fell at least 3 percent on high volume. I shrank the list with daily volume and market capitalization limits. A ABNB ACIW ADSK AER AMCR ANSS APTV ATI AVNT BALL BILL BL BLCO BR BRKR CBRE CDAY CE CF CFLT CGNX CHRW CLX CROX CRWD CTLT CWH CWK DDOG DLO DNB DOCN DT DV DVN ECL EL ELF ENTG ESI ET ETSY EW EWBC EYE FIVN FND FROG FRSH FTNT GDDY GH GLBE GOLD GPN GSAT GT HL HOOD HRB HUBS IDXX IOT JOBY JXN KSS LEA LNC LNTH LTHM LUMN MKSI NCNO NEM NLOK OI PARA QCOM ROK ROKU RPD RUM SOFI SSNC TEAM TEL TNDM TPX TRMB TWLO TXG VEEV VRSK XRAY Z ZBH ZI ZIM ZS

Bonus Shorts

I cut the screen to 20 percent higher volume. Another chemical company was in the mix:

ALso: SHOP,NVDA, MPWR (I sold my puts on Thursday) and AMD. Also HRL, JBHT, TEAM, PSNY, HUBS, ZI.

What the h?

The h-pattern is hell for bears in bull markets and hello new lows in bear markets. Some h-patterns are at their moment of decision right now. Others are at various stages, some bounced where a bull would want them too, some broke, some are still early in formation. The most important and imminent two are ARKK and FB. Both are near their 52-week lows.

Mushroom Cloud Software

Technology advances such that what was once expensive becomes so commonplace one doesn't even think about it. If you are of a certain generation, you may recall "Game & Watch" versions of Super Mario or other popular games that were simplified versions on cheap LCD screens:

Today, there is a "Game & Watch" with Legend of Zelda games, the complete versions that ran on game systems such as the Nintendo and Super Nintendo.

In software, what was once expensive becomes cheap or even free. Nintendo's games and characters survive because they are copyrighted, but more importantly, popular. If another could make Mario games, Nintendo would be in deep trouble.

In the case of productivity software, the most important function is the task itself, which cannot be copyrighted or patented. "Paying a bill" is not a patenable function. Some have tried, like Amazon patenting "buy with one click," but that is more evidence of USG corruption than a repeatable busines model. Moreover, the shift to the cloud makes switching software easier than ever. If blockchain realizes its potential, consumers will gain more control over their data, forcing companies into greater competition for customers.

Many software and platform companies are valued on their platforms. Their growth is a function of the customer base growing into the future and collecting more dollars from their users. Instead, most are headed into a future similar to Docusign. Innovative to start, how much should it cost to digitally sign a document? What's to prevent competition? This is the classic case of a company built on a feature that will ubiquitous and free. The market has already figured out that day is coming:

I haven't done a deep dive into software companies. That is for after the decline, when picking the survivors will deliver great profits. For the foreseeable future, most companies will suddenly be valued as if Docusign's fate is their future.

Saturday Dirty Two Dozen

What I like about my screens is that I keep turning up the same stocks and they're also stocks I identified myself through laboriously checking sector ETFs. This screen I used some volume and market cap to lower the list to around 700 stocks with unusual volume on Friday, then I put on two criteria: one-month loss of at leastt 10 percent and RSI above 50. Ideally there are some candidates for reshorting. One of them I posted on Thursday or Friday already. Here is the entire list that he screen threw out, 15 here and 9 inm the next:

Bounce or Breakdown

A bunch of stocks I've covered before and have puts on many of them. I included a bunch of cloud stocks that I don't currently have puts on such as former targets HUBS and COUP, but I wanted to highlight their breakdowns. I have no idea which way the market will break. Previously the horizontals some of these are hitting offered support. HUBS and COUP are beaten down and could bounce. My only caveat is that when the market finally decides to have a sell-off it is going to join these bear leaders. The market is bouncing right now after hitting these support areas, I see a kind of unity, all-one-market across the charts. Even stuff going up like XLE is at resistance, and I've tossed that in here. Also a channel play on NWL. Long story short" every time we get to this point, dip buyers pour in and bears get hosed. Sometimes there are breaks like in late November, but even those are reversed. It only needs fail one time though, and that's the time the bears will feast, and the profits I will make on that break will dwarf whatever losses I take in the here and now.

Netflix also broke a long-term line.

Bear Market Case Study: HUBS

I posted this HUBS quite a few times, there are 10 prior posts. This stock met two criteria: a vertical rise and "the price is too damn high." I think many of these patterns will eventually resolve similarly. Many stocks, including biggies like Tesla and Google, have similar patterns.

HUBS may be ready for a bounce, or not. The best part of "the price is too damn high" is how low it can go. This is probably headed for the $200 area down the road, another 60 percent decline from here. It's intraday low today was more than 37 percent below its intraday high. It is about halfway through its decline, but the next loss will be much larger in percentage terms.

Another one that extended its losses today was Sea (SE).