As the spread of the COVID-19 virus in early 2020 forced the shuttering of sports arenas, movie theaters, concert venues, casinos, and countless other sources of entertainment, a large number of Americans turned to the stock market as a source of entertainment and income.
With the new wave of investors – often armed with stimulus checks – came a flood of money and record setting trading volume in the U.S. equities market.
Many of the newcomers to the market have been involved in day trading as they seek quick profits. According to a recent poll by the trading platform Betterment, half of the participants indicated that they had taken part in day trading.
And it doesn’t look like that trend is likely to slow down anytime soon.
In that same poll, 46% of people indicated that they invested at least some of their stimulus checks.
The IRS announced this week that it has begun to distribute more stimulus checks to those who have yet to receive them – including another 2.3 million payments issued last week worth $4.2 billion.
As such, we could see a fresh influx of even more stimulus money hitting the market in the near future.
In addition, 58% of the poll’s respondents said that they expect to continue to trade even after COVID-19 restrictions are lifted.
So, look for continued price volatility this year even as life returns to some semblance of normal in the U.S.
The large swings up and down will continue to supply us with a wealth of profit opportunities.
And while those that were polled said that financial news and social media were the two biggest influencers on where they’re investing, the best way to know which stock is most likely to pop next is to follow the money.
I’ll keep tracking where the biggest money in the market is flowing to identify the best profit opportunities with my proprietary S.C.A.N. system.
Trading tip of the week
Due to limitations of how many options contracts are offered at a particular price, traders sometimes need to have a backup plan.
When S.C.A.N. gives me a strong buying signal, I always try to buy the same strike and expiration that I see being heavily bought on the scanners.
But when I am not able to buy options at the same strike price and expiration date at a price I like, I will buy an option at the same strike price but with a little more time before expiration.
However, it is best to buy the same option which S.C.A.N. identifies, if possible.
Earnings report to watch
Constellation Brands, Inc. (STZ) has been a surprisingly successful stock over the past year, despite the pandemic curbing a large amount of sales to bars and restaurants.
But as consumers shifted their drinking habits to in-home consumption, STZ’s popular and affordable brands like Corona and Modelo were clear winners.
But as COVID-19 restrictions have lifted in much of the U.S., we could see a new surge in revenue for beer brands.
Keep an eye out for indications that bar and restaurant sales are picking up again when STZ reports its latest earnings on Wednesday, as that will be a big price driver in the months ahead.
S.C.A.N. Helped 1450 Club Members Have a Lucrative Week
Today marks the start of a new trading week, and we’re looking to emulate the fantastic results from last week in the 1450 Club Live Trading Room.
On Monday, S.C.A.N. picked up on unusually high order flow for call options of Freeport-McMoRan Inc. (FCX) – a mining company that has repeatedly shown up on my scanners this year as buyers continue to pile in.
By Wednesday morning, 1450 Club subscribers were already celebrating their opportunity to cash in a huge 133% profit on the FCX call options I recommended they buy two days prior!
But we weren’t done ringing the register yet. Later that day, I alerted subscribers to buy calls on Chindata Group Holdings Limited (CD) – a Chinese IT management company which S.C.A.N. told me was getting a lot of institutional interest.
And in under two hours, the trade I recommended had given subscribers the chance to score a 100% profit!
With the massive amount of money still flowing into the market, I’m looking for even more great trading weeks with enormous profits like this.
Don’t miss out on any more huge gains. Click here to learn how you can become a 1450 Club subscriber.