Former Assistant Portfolio Manager Turned Independent Trader and Skilled Chartist.
We brought in a talented Chartist who is a former Assistant Portfolio Manager on four multi-asset strategies and one short-duration bond model to share his charts and how to manage trading through the recent volatility.
Timpane, is a predominately self-taught trade who found his passion for active trading in college during the Great Financial Crisis. After serving as the Operations Manager for a new-build hotel executive management team during and immediately after college, he decided to change careers to pursue his passion and took a position at an RIA firm. At Blue Water Capital Advisors, he quickly ascended from the Operations Manager/Trader, to the Assistant VP/Equity Research Analyst, and eventually the Associate Portfolio Manager and Corporate Secretary to the Board of Directors. During this time, he managed two ETF models and was the Assistant Portfolio Manager on four multi-asset strategies and one short-duration bond model. When the CEO of the firm decided to retire, Matthew played a vital role in the sale of the firm’s assets and led the transition strategy as a fiduciary to both firms involved. During that next year, he was employed by both Blue Water Capital Advisors and Great Waters Financial where he additionally served as an Equity Analyst and Transition Specialist.Currently, Matthew is an independent trader doing research on a freelance basis, refocusing on his blog, and completing his Chartered Market Technician (CMT) designation while waiting for his next great adventure. Matthew is a position/swing trader that primarily uses technical analysis focusing on trends, relative strength, and momentum. For longer time-framed concentrated position trades, he additionally utilizes fundamental analysis. For the full transcript please GO HERE.
You share some of my favorite charts on @StockTwits. What are you watching now, top 3 favorite charts on radar? — michaelbozzello
First, thanks for having me do a Q&A. The @Stocktwits community has been asset in my own growth as a trader through the years. First chart is obvious, we’ve been consolidating & are a point of possible resolution or failure. $SPY
Second chart is the $DXY breakout after a big downtrend. Reason why EM tested support & small caps outperforming
$AAPL A large position of mine & will likely be first 1 trillion firm, growth in services warrants a re-rating of multiple.
A bonus 4th chart — Redfin competitor $EXPI I like the space overall. h/t to my buddy Ryan for initial alert.
Curious about your thoughts on CERS. They’re releasing earnings after the close today. The chart looks soft though. — jk74
Sector has been under-performing, but I like their specific space. The chart looked good before earnings. Formed a base & now broke out, personally wouldn’t chase, but buy-able on a retest with a stop at 5.16ish.
With swing trading are you trying to pick tops and bottoms? How do you avoid catching a falling knife? — patrickrooney
Personally don’t, I look for breakouts, trend reversals with confirmation & trend tests to open positions in securities that are showing relative strength. Try to have at least one confirmation test & always honor my initial stop to avoid catastrophic losses.
How are you Matt? What is your return YTD? — ElizabethII
I’m well, thanks for asking! +6.52% but vs flat S&P. I’m happy with it since I de-risked in Feb by honoring my stops.
Hey Matt, want to work at Axe Capital? I am recruiting again. — BobbieAxelrod
I’m in! Being a TV PM seems much more exciting than being a real PM or Analyst. Can I be called Matty Ironbeam?
So much uncertainty around Micron and other Semi’s. What are your thoughts going forward into 2019? — frank2029
Posted this chart last week & think semis are bouncing short-term, still work to do long-term.105.90 target almost hit. Only concern is possible overcapacity issues in the future since it’s a very cyclical industry.
Which one wins: active or passive investing? — HeyShoe
In a way, both. Active became over-saturated during the last few decades. Active funds will continue to lose assets to passive until majority of closet indexers & low performers are gone, but I think Active ETF’s will continue to grow & see increased flows over the next few years.
How do you avoid chasing stocks when buying 52 week highs? — rogoman
Learned early to define initial stop loss before entering a trade & honor it no matter what. Over time you will learn how much slack you should give dependent on risk & growth possibilities.
What blend of indicators and signals do you use to find a good setup? — Gush
Primarily use RSI, Momentum, plus A/D, OBV, & MACD occasionally. Look for market themes, support & resistance, and trends. Set alerts for breakouts & bounces.
Do you have a set of go to screeners that you look at first when researching ideas? If so, please share! — RWDProjects
I do, here is one that produces reasonable growth co’s w/under 1 d/e. I overlay my TA after.
I do both swing trade & day trade. It’s tough describing this to people. How do you articulate the difference? — threefivedelta
I hold core concentrated positions that I have high conviction in & swing trade to take advantage or hedge against short-term fluctuations. This allows me to focus on growth, but de-risk when necessary.
What are some reasons why I should continue swing trading instead of just passive investing? — bigfry
First, you should only trade if you love the markets and are willing to do the homework no matter an investors style. Must love investigating company’s, sectors, and whole markets. Plus, enjoy creating rules-based systems, optimize strategies, and are willing to adapt to different market conditions.
What advice would you give a college student that couldn’t get a finance internship, but is serious bout trading? — AustenThatGuy
Find a RIA firm that manages their own ports to get an internship or first job. Look local, they don’t recruit. Interns from local firms (Northern MN) are now at names like PJC, BAC, Parametric, & 1 founded @AhrvoStockScores
What are your most effective momentum indicators and how do you interpret them? — dennismccain
Most effective for me is RSI & Ratio Charts that help define Relative Strength vs the market or a sector. Divergence fan in general, I also look at Momentum, A/D, MACD, and OBV occasionally.
Why down so much on DIS after very good earnings will it recover before Friday? — WD_123
Benefits of merger were priced in, but uncertainty of deal/price has investors nervous. I think it’s basing here w/rising RSI.
What scares you most about the current market and what are you doing to address it? And do you ever short? — bearcharts
Biggest concern for 2018 has been political risk (uncertainty) created by the White House. So far, so good though! Hard to predict that kind of risk, so just honoring my stops when we get bouts of vol & carefully get back in. I do short but not individual names, only broad markets as a hedge.
Who do YOU follow on StockTwits? — ImQrious
Favorites- @1SimpleTrader @commonking @BadaBingCapital @charliebilello @astruzynski @jackdamn @SunriseTrader @rahagar @ImQrious @Stocktwits, @howardlindzon @scheplick @michaelbozzello for a different perspective @Partridge @MeasuredMoat Forgot about 2 newer follows @theEquilibrium @mtbigsky Curation of followers works & my apologies if I missed anyone.
Do you ever combine technicals and fundamentals? What have you learned trying that? Does it work? — scheplick
I do when I plan to hold a position longer than a few weeks. Don’t just look for cheap valuations, look for increasing Rev/Sales/EPS/OCF growth & declining d/e ratio. It does work because growth often drives price action.True believer in the old adage, fundamentals tell you what to buy, technical’s tell you when to buy/sell. 100% believe they are linked and investors should have an understanding of both.
Two Questions: First is borrowed from Patrick o’shag: What’s most generous thing someones done for you in your career? — BadaBingCapital
Simple, boss at my 1st firm gave me a chance in the industry, to develop, & take on responsibilities as I grew. A handful of things, but what bugs me most still is EMH(Efficient Market Hypothesis) believers. IMO, information is often misunderstood, which creates mispricing’s/dislocations that creates opportunities.
What percentage of all trend/momentum trades taken work out good, in the next 1–2 months? Do you sell fails immediately or wait? — AlexanderGreat
If we breakout of current consolidation I think a high percentage will work, but if we remain in a broader market consolidation, breakouts won’t work as well & it’s better to adjust to buying pullbacks of trends that hold up & reversal patterns. Have a defined stop and typically wait 1 to 3 days for confirmation on failures. Discretionary based on price action. Various factors, relative strength, size of float- supply & D is a powerful force, developing a moat, new industry/tech, etc If unable to buy early on initial b/o I’ll wait to see if it retests. Sometimes it never does but I’m okay w/that.
What’s a better bias getting to know a smaller group of stocks/funds well or using screeners for whole market? — Nev17
That’s tough, it depends on your style/personality. You have to find what works better for you. I screen a lot, but follow people who are highly successful that limit their universe to a handful of names they know well. People who are highly successful that limit their universe to a handful of names they know well.
What is your favorite play snap back or skin the top? — rocket625
Snap back to retest always makes me feel better. Gives me some confirmation.
Best strategy in the current market? How did you adapt during the ~3.5 month correction? Favorite pattern? — 1SimpleTrader
Laying off breakouts a bit while in consolidation, buying more pullbacks to trend & reversal patterns Let my stops get hit during volatility, sit in cash vs short early, & slow down on allocating capital to new positions. Ascending triangles, but also like flags, falling wedges, and inverse H&S. Hate regular H&S(Head and Shoulders) as we’ve discussed before.
Do you have a systematic process determining stops relative to security? SD of volatility or beta based? — llblankfacell
Most of the time I will set stops near trend/support break areas but give it some slack because of failures. Sometimes use a %trailer, but have nothing against SD volatility stops & have looked into incorporating them more.
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I am the Director of Community for StockTwits. Follow me @michaelbozzello.
