Learn Why Fundamentals Don’t Matter with Kenny Glick
Kenny Glick, a former comedian turned questionable stock broker and now, day trader from HitTheBid.com is our special guest for this episode. Christopher Uhl, Founder & Head Trader at 10MinuteStockTrader.com, Two Time Top 100 Person in Finance and host of The How To Trade Stocks And Options Podcast had a one-on-one with Glick and let us see what we can learn from this interview.
Glick starts by commenting that right now, we are in the midst of what he thought would be something that has been left in the past. Glick had apparently traded his whole life and seen so much, but what he is seeing right now is an epic short squeeze across the entire market. And the joke of what’s going on right now is we’re legitimately looking for the most worthless terrible stocks that we could think of, and those have been the monstrous winners. The days of buying Pfizer and Bank of America based on earnings and fundamentals don’t even exist in this market. The last couple of weeks have obviously proven Glick’s theory that fundamentals have no place in trading.
Because of the pandemic, day trading has now become really, really popular again and there are more people joining in. Glick shares that his real trading style is gap reversions on earnings reports. If the gap is up, we’re looking to sell. And what he notices is one of the best trades is that if the stock is gapped up and breaks under the VWAP, almost 80% of the time, you’re going to get a decent follow-through to move to the prior day VWAP.
The reason why Glick looks at these earnings reports is that that’s when you find the stock that has the most volume. Earnings day is generally when you’re going to have an explosion of volume. So when it’s popular and it has a lot of volumes, it’s when the volume-weighted average price works its best. Now, pre-market is the market now. It used to be pre-market with zero liquidity and not a lot of volume. So, regarding VWAP, what is it about the VWAP that Glick likes to use so much? According to Glick, for about a year he just observed VWAP first. So each time you would break one minute, your one-minute VWAP would get violated up or down and you tend to gravitate to a prior day VWAP if there was one nearby. Just from observing that trade, Glick thinks it seems to work really well. One of the most important lessons he ever learned is that you just can’t stay short of stocks that are breaking over the VWAP.
Now, aside from not staying short of stocks that are breaking over the VWAP, Glick learned the idea of accumulation. You’re judged on whether or not your allotment has beat the VWAP. So for example, the VWAP is $11.45, and the stocks sitting is $10.85, you’re just accumulating. As it gets closer to the VWAP, you’ll start seeing more buying because the accumulators need to keep their average price below the VWAP. It’s the accumulation break of the VWAP that they need to stop frantically buying, and that’s the basic way to understand the VWAP.
Glick continues on by saying that no matter what you are doing, define the trade. If you are buying it here just remember where it came from, place your stops accordingly, have your targets, and remain disciplined.
Watch the full podcast and discover Why Fundamentals Don’t Matter with Kenny Glick here: https://youtu.be/pdfFjeqdErY