Bigger Picture

Observations of opening action and actionable parameters…
ICBU — Impressive volume on the open”s surge, now retracing back to recent highs under .134. Should bounce to fresh highs this morning if the breakout is valid.
GWPH — Gapping up above yesterday”s highs to test resistance, which is the upper-end of the 60.45-62.85 pullback target where this was added to the portfolio last week.
TRTC — Gapped down on last night”s financials release. This is a product of the weak bottom I described at the time, and the risk that has kept me from chasing it higher. It is also essentially the 15 cents cheaper that I”ve said I would want to buy. Now must close above 1.07 to signal that sellers were absorbed.
ATTBF — Gap up attacking $2 slid sharply back to 1.65, now bouncing again. Closing today above 1.95 would be bullish, the higher the better. Otherwise, stepping back to watch.
PHOT — Gapping up on last night”s financials, already long, now closing above .62 would help to confirm the rally”s momentum remains intact, targeting new highs.
ERBB — Sliding through the open, still monitoring for a buy signal
PMCM — Spiking up through .0053-.0054 confirmation
CBGI — Huge volume on the open, could be a runner intraday

Today”s filter is… The lesser fool theory.

We”ve all heard of “the greater fool theory.”

The idea is simple. Basically, value is determined by what one buyer can fetch in selling to another. No three-letter accredited fundamental or technical analysis needed. Simple.

Maybe. Maybe not so much.

Notice what is implied, that there must be a buyer before the greater fool buyer. A “lesser fool,” as it were. Not the actual producer, but another buyer in the chain of custody. That”s where things get difficult.

Never will any sale be perfectly informed. Every transaction accepts some type of risk, to some degree or another. The buyer”s most obvious risk — finding someone to buy higher — isn”t the only one. He might have paid a little less by waiting a little longer, his capital might have been better used elsewhere, etc.

Like a lot of theories, “the greater fool theory” is pretty simple… in theory. It starts getting a little difficult in practice.

We can never hope to always possess perfect information in every decision we make. So, we can at least try to limit each decision”s risk. Patience and stinginess can be virtues in picking our trades. But they might only serve to limit our losses if we”re not quick to recognize when greater fools are becoming scarce.

Informing our decisions with a little professional opinion here and there can be virtuous, too. No matter how simple the greater fool theory, its biggest challenge is in not being the greatest fool.

April Fool”s! The “Need to Know” video for Tuesday covers those stocks listed below — and in the order listed, in case you want to fast-forward to stocks of specific interest. Actionable parameters are listed for most stocks discussed. Don”t forget to check the Activity Feed for my updates on how price action is performing compared to the parameters.

(BO) Breakouts and breakdowns — Stocks that probed above or below their recent range… More to come, or just noise?
(PB) Pullbacks — Stocks that have ended one leg, and are now correcting lower, presumably before resuming their rallies with another upleg.
(EA) Early adopters — Stocks that haven”t been on the radar recently, but might be soon… What specific price behavior to watch.

AFTERNOON RUSH –notice the running time… 3:15-3:35 ET– Is a stock”s price action today concerning or interesting you to consider taking action? Perhaps not on a day like today. Nevertheless, check relevant parameters that I might have posted earlier on the Activity Feed (you should be doing this anyway). Let me know of any pressing situation where my observations might assist you in a pre-close decision. Post the symbols and specific questions (please, not just symbols) to this Alert”s comments section. I”ll address them from 3:15-3:35pm ET.

This morning”s setups that I listed in the prior Activity Feed post”s thread, now including updates…

GWPH — The open”s pop-up was retraced back to Friday”s close, filling its gap. Back above 56.60 was expected to extend higher. And it is, to fresh highs now attacking 58.

ATTBF — Gapped up from Friday”s big reversal day. A dip to 1.95 would be an attractive long-entry. Its test was momentarily productive, but now another downdraft is testing 1.90, which should resume and extend the open”s surge if the open”s rally is going to resume today.

BRDT — A dip under .70 would be compelling for resuming the today”s break higher to .80 and .88, in a pattern that is already targeting new highs. And having tested .66-.70 support, any lower would undermine whether the opening surge”s reaction down was going to cover. Under .66. , I would reconsider being long.

TAUG — Gapping up sharply on strong volume, trying to reject Friday”s bearish bar. Back under .066 would suggest it wasn”t rejected, and that fresh lows are in-play.

ENRT — Extending higher this morning after bouncing Friday off of its big support. Intraday support at .63-.66, and if tested by a dip, can launch another intraday upleg targeting .85.

VAPE — Touched the upper-end of my 13-15 target this morning, and reacting up on a buy recommendation from a world-renowned analyst ;) …Those credentials notwithstanding, my signal remains intact, at least so long as 20 isn”t recovered through the close.

STEV — Holding up well from gapping up. Stopping a little pessimistically short of probing prior highs. Catching a second wind back above .285 (being tested now) on expanding volume could finally retest the recent .34 high, and extend higher.

EDXC — Won”t be a candidate today, but probably tomorrow if today”s session were to remain entirely under Friday”s .28 high while volume contracted.

TRTC — I”d like to buy it about 15 cents lower, under 1.00. It might extend without that, but not as predictably.