The major indexes (^DJI,^GSPC, ^IXIC) are in a record-smashing year as bullish calls on the S&P 500 pile up. RBC recently revised its S&P 500 (^GSPC) target to 5,700, yet, the analyst behind the call noted growing risks of a near-term pullback. So how should investors play the market?

Kenny Glick, owner of HitTheBid.com, joins Yahoo Finance’s Jared Blikre for the latest episode of Stocks in Translation to discuss the state of the market and break down some of his investment strategies.

Glick explains how he uses volume-weighted average price (VWAP) as a trading strategy and how early investors can use the metric to inform their own strategies. He notes that earnings season is usually a catalyst for the market, and contrary to popular belief, weak earnings could be a good thing: “I like to see bad news because bad news, you have what we call the gap down. And the gap down in a bull market is quite often bought.”

Be sure to check out more Stocks in Translation here.

Video Transcript

Welcome to stocks and translation.

Our essential conversation for cutting through the market mayhem, the noisy numbers and the hyperbole to give you the information you need for your portfolio.

I'm Jared Blicker and I am joined as always by Sidney Fried here and today, a very special guest.

We have Kenny Glick.

He is the owner of hithe.com.

He's an active trader and a market technicals purist who operates quote, possibly the most entertaining trading room on the planet.

Kenny, a lover of candlesticks and V Wop very near to my heart.

So uh welcome guys and thank you for Jo journey out here on the docket today.

Guess what we're going to talk about and focus on price action.

It is the lifeblood of technical analysis and the basis behind every stock chart that we read.

And our phrase of the day is V Wop.

Don't play the drinking, the drinking game because you are going to hear it a lot.

And this episode is brought to you by the number 24.

That's a number of hours each day that stocks may soon trade seven days a week.

We explore the insanity.

Uh So Sidney Kenny, let's get, excuse me, let's get down to the uh what we're talking about today, we are talking about price action and literally that is the lifeblood of what we're talking about here.

Let me just dive into it with you.

What does it mean to you, Kenny Price action is life.

You know, again, I follow the VW.

So everything about price is right there for you.

So, you know, again, when you talk about price, it cuts through all the nonsense.

I think you kind of said it at the beginning there.

Um, you know, you don't have to worry about who the President is.

You don't have to worry about economic numbers.

You don't have to worry about really anything except what the stock is doing at the time that you're in it.

And again, when you follow the V wap, that really is, again, my point of clarification, we're gonna get into the definition of V wop.

But you're pronouncing it.

V wap a little vwavww do.

Yeah, exactly.

My dad was a big dow fan.

So, I, it's, it's the meo tomato kind of thing.

I hear it.

Wap.

But we go whoop.

I tell you what, Brian Shannon, one of the many books on V wop or one of the few books on V wop, he calls it V Web and he makes a compelling argument.

I've been down at the New York Stock Exchange and they tend to say V Web.

So, who's to say, um, but let's get down to nuts and bolts here.

Um, just talking about the market.

You're a day trader.

How do you, how do you sit down in the morning?

How do you approach the market?

Same thing every day.

It's actually like groundhog day at this point.

I'm kind of getting a little psychotic about it.

But, you know, again, you turn on the news, see what's going on.

I am a big fan of volume obviously.

So you're looking at some of those small cap stocks in the morning.

There's always some weird name, some, you know, some tiny stock that has, you know, 2030 million shares out of nowhere.

And I'll take a look at those but we generally sorry.

Yeah.

Yeah, generally it's just gonna, you're gonna look at what's in the news because the more volume, the more better.

So today, you know, if I don't want to date the show, but you know, Tesla was all the rage today because you had some, you know, some big news on there.

So that's where you go and you just follow the VW and follow the price.

Can you help me understand how volume actually works for an early investor?

So where all the money is going today?

Let's say you're saying, follow that.

Yeah.

Yeah.

Yeah.

And again, you could take, what, what I say is I, I live in the nucleus of the market.

So if you could conquer the day and just understand the price action and the volume, then you could take that and expand it and keep expanding it and keep expanding it.

So for the, for the, for the newbie who wants to know it's like, that's where the action is, that's where the institutional people are putting their money.

That's where the money is flowing in.

You know, schmucks like me who are doing a couple of 1000 shares.

I'm not moving the market.

So I'm like, uh I like to think of myself as that little creature underneath the great white shark.

He's doing all the hard work.

I'm underneath picking up the scraps, but he's the monster causing all that volume and we're right there.

Thanks.

Thanks.

We're gonna some of this money.

Exactly.

OK.

But if NVIDIA is down 10% today, I sell NVIDIA, right?

Is that how we're, is that how we're playing this?

No, no.

If it's down 10% you're looking to buy it.

Yeah.

Yeah.

Yeah.

It's, it's more than buy the dip.

It's actually again, when you're looking at VW, it's telling you where the most of that money is going in.

So let's say NVIDIA is down 10%.

There's going to be one point where the buy and dippers come in, the volume starts to come in and when it breaks back over the V web, not only do you have those Great White sharks getting in, but the algorithms that are controlling most of this market are kicking in too.

So if you're just buying at V Web and generally you're gonna get a different trend created right there.

And quite often it's that easy, you can buy the VW a break.

Next thing you know, you're in a good trade markets, operate fract, you play the low time frames up to the higher time frames.

I got to pause here because we've been saying VWA a lot V web and we got to define it.

We gotta break it down for the viewers enough teasing.

Um So here's the dictionary definition, volume weighted average price or VA is a trading benchmark that calculates the average price of a security weighted by volume over a period of time.

And oftentimes it's a single trading session.

V op is also used by traders to assess the intraday price trends and by institutions to execute large orders with minimal market impact.

So that's a little bit of how it's used.

Um Brian Shannon, a fame trader.

He uses V wop in an anchored fashion and that's different from what a lot of other traders when we're talking about VWA a lot of times it's just intraday.

What is the average volume weighted price in today?

And what is that telling you?

It's telling you where most of the money is going in and what he does is he anchors it to a criteria that he deems worthy.

Like let's say two months ago, somebody reported earnings he wants to take the VA from that time period to today.

What I found is that the Algos seem to like prior day V web.

So it's kind of like anchor to the prior day.

So if you get a stock that breaks back and again, let's talk, let's talk about NVIDIA for a second.

Let's say you got that 10% down move and it breaks back over the V web.

It tends to go gravitate right back to prior to V web.

And in that moment, you can make a living in that moment.

It's the simplest concept to actually understand.

And usually it's just two lines on a chart.

You're taking away moving averages, you're taking away stochastics and RSI and Bullinger bands and anything you wanna list.

And if you go on any chart, you see 10,000 things on the side, it's irrelevant.

Just follow the VW and you're going to get paid.

It's amazing how well it works.

And what I do is again, going back to the, that first question, stick with the stocks that are in the news.

That's where there's more volume and you get more of those follow through moves without a follow through.

You get nothing.

You're just looking for action.

Yes.

OK.

But so I'm not a day trader, I'm not an active trader.

If you're really just coming into the stock market, how do you find VW?

Do you to calculate it for yourself?

Like where can, I easily find this number over here.

There will be no math on the quiz.

No, no, no.

It, it's, it's now it's embedded everywhere.

You know, Yahoo has, and Yahoo has actually has multiple time frames.

We have Anchor V which is pretty, pretty impressive for a free, free, free chart, you know, used to not be able to find that.

And again, they had VW a buried in some of these charts You had to go dig for it.

But let the computer do the math for you.

That's right.

I will.

If I do that, I'm not doing that.

No way.

I mean, we've been kind of disparaging fundamentals here and I just want to get your take on it.

And you know, for that Matt, you wanna know when the macro events are happening because that's where the volatility is.

But do you need to pay attention to any earnings?

And I throw out Canli as an example, Bill o'neill, um kind of wrote the book on how to merge fundamentals with technical analysis.

And he uses fundamentals as almost a screen.

Like what stocks do I really wanna get invested in over the long term.

He's looking for those 10 time returns.

Is there a place for fundamentals?

Fundamentals only come into play for the catalyst.

So earning season is our time to shine because that's when you have more earnings.

When's the best news, when's the big catalyst that it's the news?

So that's the only reason fundamentals.

So you don't even care what the news is.

I, I like to see bad news because bad news have, you have what we call the gap down and the gap down in a bull market is quite often bought.

That's when the price opens up before, below the closing level of the prior day.

Right.

So let's let, let's talk, for instance, we have uh the banks coming up.

So JP Morgan Citibank is gonna come out.

So what I look for is stocks that are gap down.

You know, we, we're in a bull market that just doesn't wanna end and it may never end.

But that's ok. That gap down provides that buying opportunity just like the NVIDIA being down 10%.

So when you break back over the VW, next, it, that's it.

Nobody cares about the fundamentals anymore.

Stocks break and VWP, let's get in the Algos kick in.

And next thing you know, you, you start seeing it get back to prior to V web and then you could start looking at extended periods and then you could also look at the Brian Shannon who could anchor it back to the last quarter.

So it is absolutely amazing.

But yeah, we could disparage fundamentals all day, my friend all day.

How do you know though that a stock isn't just doing really poorly and you might not want to buy, you buy bigger dip is on.

Exactly.

Exactly.

So, when you get rejected at the VW A, that's, you know, it's telling you that, hey, this is the, this is the divider line.

If you can't get over that and you get rejected, it tends to roll back over.

So what do we like to do is we have to see break the VW and then test that strength from on top.

That's saying.

All right, we're good, take care, everybody nice seeing you and they're off to the races.

But another trade style is that when it gets rejected at the VW, that's when you short it and you use the VW as you're out.

I didn't want to get too technical with you, but that's exactly how we trade.

That's why we're here.

You know, the way I think about anchored V Wop and I was converted long time, a long time ago, I swallowed the pill.

Um But what I like about it is basically a reference point.

As you said, a dividing line.

Are you above it or below it?

Now, you can have multiple lines and that's fine.

But for instance, I'll take the V wop anchored from the beginning of the year such that I know, OK, at this level, anything above the average person is experiencing a profit, uh the average person down here is experiencing the loss, which means at the equilibrium point.

Well, that's when a decision is getting made and that's often time where the price in flex just wondering if any, uh, technical uses, you find it for, uh, for V wop beyond the usual ones.

Yeah.

Well, when you, you can expand it to any time frame, that's what's amazing.

That's why it's still, it's still exciting to me because I remember when I first said somebody asked me, can you use it on a multiple time frame?

I was like, why, who cares?

I just like today's V web because I'm a day trader, you know, above it, we're going higher below or tend to go lower.

But when you start looking at it on monthly and you see how it comes into play, even when the market had the flash crash, I forgot what year that was, that was May 6th, 2010.

My God, you must have been.

I was, I was watching it in real time.

So when, when you go back to that, that Dow Jones chart and there was mass chaos.

1000 points down was a big deal back then, right?

And when you see it, how it tagged the two year VW to the price you're thinking, is it all rigged?

It is.

It is, it seems to be all rigged today.

There were certain prices where Tesla went to and came back to that were on the chart before they went there, the more you stare at those charts and the more you look at VWP and extended time frames you start to really believe.

And again, I'm a believer.

I mean, it's almost like a religion to me.

I am a believer that the market is almost preordained what it wants to do.

Certainly not by Steve Cohen, by the universe.

Half, half numbers, whole numbers and VW is really, it's, and again, the, the lay person, that's what I love teaching this.

It cuts all that other stuff out, especially fundamentals.

Let me ask you is now a good time for retail traders.

Uh Like I hear a lot about how the markets are rigged.

Who do you kind of believe?

Should you get in?

Should you not?

What's the deal?

But that's, that's my kind of my point.

The market is rigged.

So if you use the universe itself just to be clear, you can use the rigging back at it.

So it's like walking into casino.

Ok?

And roulette, I like roulette because I don't have to think.

All right, I put my mom's birthday, you know, my kid's birthday.

You don't have to think when you're losing money sometimes.

Exactly.

I don't gotta think so.

If I walked into the casino and said, hey, the guy says, hey, listen, only 24 and 36 and five are gonna hit for the next half an hour.

You should come out ahead.

That's kind of VW you see what the stock wants to do and the, the, uh the whole premise to trading is when you're, when one doesn't work, you just don't stay wrong, you could be wrong, just don't stay wrong.

And when you're only looking at price action, it's right there on the chart, you know.

Yeah, you better not let it go through this price or it's going to get worse push button and very good information there too that you can maybe you wanna switch directions.

I'm wondering how you attack risk management because all of this doesn't mean anything.

If you're not living to trade another day.

How do you protect yourself?

And how do you think about wins?

Because if you're on social media, you gotta have 100% win ratio.

Anything less.

You're not doing it.

How do you approach risk management?

Listen, let me tell you something.

I have a 10% win rate, right?

No one's gonna sign up.

But you know what if you have risk to put that in bold letters across the screen, a successful trader?

10% wins.

And I, I have a perfect example.

There was a day where I went one for 16 but with proper risk management and your stops.

So when you get the trade wrong and it's not a good trade, it's let's say let's just round it off to $100.

So if you lost 100 you lost 100 lost 100.

At this point, you're thinking maybe I shouldn't be doing this for a living and then eight more and then that last trade works and that's the one that you keep making more on.

So now you take, you had a one for 16 day but you came hit.

That's risk management.

And again, when you just look at price action, you know exactly where you're getting out, it's really comes down to the ego.

Nobody wants to take a loss.

Nobody wants to admit they're wrong.

So that's where the stops.

And again, because the market's rigged and there are stop hunting programs out there.

I try not to use stops.

I'm at, I'm at the desk.

I don't need to broadcast to the world into the universe.

Here's where I'm willing to take my loss.

If it goes there, push button, I'm sitting there, I'm sitting there.

I don't need to put my stops on.

Only time I have stops on is when I have the extreme stop, the just in case something completely goes crazy.

And if I just feel like getting up from the desk, but listen, I don't get up, I'm there from 8 to 1130 in the morning.

I never move.

I never move.

We're gonna, we're gonna take a short break here.

Guess what?

This episode, this episode right here is brought to you by the number 24 the number of hours in the day.

But also, you know, they say crypto never sleeps.

And we might soon be saying that about stocks because that's as the 24 exchange.

This is what it's called.

The 24 exchange backed by billionaire Steven Cohen.

Uh We mentioned his name a lot here seeks approval from US regulator to operate 24 7.

This has been in the works for a while.

We also have some uh automated trading system, alternative trading system.

A TSS like blue Ocean that do this.

So it's not necessarily something new but to get an actual exchange trading 24 7.

Do you even want this?

Do you want to know the prices at 2 a.m. of your portfolio?

No, thank you.

Thank you.

We just leave it there.

But like there's if we need to sleep but it's open.

I mean, it's still in the gap.

If there's a constant flow, then there is no gap.

Well, good question.

Good question there.

So extended hours trading is 4 a.m. until the market opens 9:30 a.m. Eastern and then from 4 p.m. M to 8 p.m.

I believe.

But it's been opened up beyond that, but it's really not 24 hours.

Um You got to go through some convoluted private exchange of shares to actually put it on the books.

But Thinkers swim has the queues trading 24 7.

Yeah, you could put those orders in.

All right.

So even on the weekend, I should, they close Sunday for about six hours.

I think it's, it's like almost 24 6.5.

Well, to do this.

So the DTCC, the DTCC would have to get involved.

They'd have to be able to clear on the weekend and it's kind of, but if the demand is there, I imagine it would happen.

And so it's just like crypto, you know, there's, there might not be a lot of volume at 2 a.m. on Saturday night.

But, you know, if it's there and something happens, maybe you, you're appreciative of the liquidity.

I don't, I don't want the markets open.

I think that's where we kind of, we did.

But it, it seems like it seems like it doesn't matter anyway.

Right.

Like everyone wants to know what happens during the trading day.

If something happens at 5 a.m. it's like, oh, well, this, the shares dropped 10% pre market, but when the market opens, it's reverse.

Like, so no one does, it does, it really even matter at that point.

Well, you know, if the markets open all the time then you'll, well, first of all, you won't have the gaps.

The earning gaps are what I, what I love.

Interesting.

Yeah.

So if, if the markets are open and they release those earnings, I, it does level the playing field and they used to, they used to just halt the stock before the earnings and then they would just gap and that was kind of unfair.

Now it's kind of open, you know, they, they'll, they'll have the, the, the, the, the halts but, you know, 24 7, it's just, it's just, it's ridiculous and what they can't do it.

I think uh part of your question was like, do the extended hours trades counts be, do they count?

Because we're always kind of footnoting them like this happened in after hours trading, but we're just waiting for the market to open up tomorrow to see if they institutional volume behind this move.

Um So I, I don't think we're talking about closing down the opening and closing auctions at 934 just adding some extra hours.

Uh But clearly nobody wants this at this table.

So we're just gonna move on here.

Um Time for another existential version of who wore it better.

Now meme edition and today we're gonna be taking a look at the top meme stocks.

You know the names and thinking back on the drama that erupted in retail margin accounts quickly spilling over into the prime, prime brokerage space in 2021 from e trade to the DTCC spawning countless memes and at least two Hollywood flicks eat the rich and dumb money.

I'm gonna ask you, Kenny, which meme stock?

Where is the man for best?

It could be game stuff.

It could be chewy, it could be a MC.

Do you even care about meme stock?

Oh my God, please stop calling it that.

Why any stock that has some volume on that people are talking about the internet.

Suddenly a meme stock.

I hate the word meme.

I hate the word meme stock catch all.

I, I don't, I don't, I don't get it like they, now they've dubbed Chewy and Me Stock.

I'll tell you what shorted.

Yes, I'll tell you something.

It was the easiest short of a year yesterday when this guy, I, I never watched one of his videos.

I finally sat there and watched the one, everyone was talking about him, like, last, last week, the week before I was like, not a whole lot went on.

Right.

And so now I'm actually rooting against this guy.

He was so un entertaining.

So, I mean, I, I know he couldn't say much, but to me it was awful.

And I, now, now I'm, I'm anti this guy.

So when I heard he was getting involved in Chewy, as soon as it broke V rap, that was at $32 I'm like, oh, we're gonna kill this guy.

Do you think you're falling into his trap?

What do you think you're falling into a trap?

Well, I never buy what anybody ever tells me again.

I, I'm, I'm all about price action and just what I see.

So even if the CEO called me and said, hey, listen, Kenny, we're gonna get bought out in three days from now.

You're below the V web.

Take, take.

Thanks a lot.

It doesn't matter.

That's why I love the way I trade.

You know, again, I just, I believe what I see and that's the way I've lived my life.

That's why this is so appealing to me.

Yeah.

Yeah, I believe what I see.

Meme stops are co stocks are complicated though because they, they are going up when someone like him buys them.

Right.

So, I mean, I don't know, for someone who's just getting in and who is not, who is not like you, who is listening to what they're seeing.

I mean, they could get in real trouble.

Right.

Sure.

And what I can understand is what they, what they're waiting for, what they're waiting for to happen already happened.

So gamestop went from 8 to 80.

What were you, what else would you, what else did you want?

And then it crashed down to 20.

I understand your attitude completely, by the way.

But it's not a common question.

But is there, is there one is a MC still up a lot from where it was?

Ok.

So it, it hasn't really suited anyone long.

I have a cousin that's living a MC.

Keeps believing one day.

That's why you live home with Aunt Joan now.

Oh my God, we got, we got a few minutes left.

You have a really, you've lived an interesting life.

You used to, you work for Saturday live briefly as an intern, any stories from back in the day in New York?

You must have seen some interesting stuff.

Wow.

I mean, yeah.

Sure.

I mean, Saturday Night Live was exciting.

I was there in 9092.

So Sandler was just getting there and, uh, Phil Hartman.

Phil Hartman.

Yeah, I got to see him do some voice overs.

So that was awesome.

And you know what, I, I always wanted to be, maybe I'll tell this story.

I'm embarrassed a little bit.

I was fired.

I was fired as an intern snl.

Yes, I answered the phone with a funny voice and I don't know what that voice was.

You know, they might support, they might get behind that.

That's what I thought.

But I think it might have been the scripts.

I kept handing Phil Hartman and, and, uh, that was it.

Yeah.

Hey, I got an idea here and, uh, yeah, I was asked to leave the building almost like Felix Unger, his wife.

Yeah, he's like, you gotta get out of here by like, no, now before he gets here.

So Jim Signorelli, if you're out there, uh, I wanna, I'm gonna get on that show.

I'm gonna host the show.

I'm gonna make fun of you.

You landed on your feet.

It was on his VV.

I actually can't, with this word anymore.

It's interchangeable.

Don't, don't be afraid.

I'm not gonna say the w after this in the next 10 minutes.

That's it.

Uh, my question for you is you don't have a, well, we were just talking about SNL.

You don't really have a financial background.

So tell us a little bit about how you started studying the stock market.

It was kind of like right out of Saturday Live.

I was trying to be a stand up comic and, uh, you know, somebody approached me at one of the shows and I thought he was an agent.

This is it my moment and turned out to be a stockbroker.

Hey, you're a funny guy.

You know, you heard the, the bit about, I'm still, yeah, I'm still living with my mom.

I'm broke great.

Come out to Long Island and you know, we'll, we'll teach you how to sell stocks.

And there I was wearing the bar Mitzvah suit the whole thing.

And as soon as I walked in there, it was like the Ben Affleck character, you're gonna go, you're gonna show up in this suit.

What are you doing here?

Why don't you buy a new suit?

I'm like, I, I just found here.

Yeah, he's buy a new suit, sell the stock and we were selling, get this.

We were selling the light.

The company apparently made the, the Glow and duck license plate covers.

Remember those some like 19 really popular for a few months.

And if you lived in Brooklyn, they were huge and that's what we did.

So, so if every once in a while I actually got a human being on the phone because he would just get, you get yelled at or cursed at.

And then it was just, just like the movie, I yelled out to the guy grabbed the phone out of me, starts pitching the stock and, um, you know, then they start talking about IP O si was like, what's an IP O?

You know, they were like, oh, we're gonna, you're gonna get your series seven.

I'm like, oh, I gotta study for something.

I think it was the first time I stopped smoking weed for like, 30 days.

So I cleaned out, I took the test.

I got a 96.

I walked into the office.

Good for you.

You got a 96.

That's not what they said.

You're not gonna make it in this business.

That's what he told me.

He's like, who do you think this is?

He's like, well, then II, I gotta tell you the story.

It just keeps going.

I remember when I was, I had bought my first stock IGT slot machine just got, just got back from casinos and uh every slot machine was made by IGT.

So I'm pitching that to these to the people and I actually closed somebody for 2000 shares of $12.

I walk in there.

I'm like the king of the world $24,000 ticket.

They called my manager in like I did something wrong.

Uh Hey, that's a great, that's a great sale.

24,000.

So that's an $80 commission.

We're gonna take half after taxes and you're gonna, you're gonna make 30 bucks.

If you just sell XYZ Consolidated Technologies Incorporated, we'll give you $4800 commission.

Who are you looking out for?

I just took the seven, the client get out of here.

And that was my experience.

So I was emotionally and physically scarred by Wall Street when I first had some real wolf of Wall Street.

Uh, yeah.

So that's why trading really, it, it was, it just was for me because now I don't have to talk to anybody.

I don't have to answer to anybody.

It's me.

We gotta say goodbye.

Really?

Enjoyed having you here and good luck to you and your, and your online endeavors as well.

This will do it for stocks in translation.

Keep your dial tuned to Yahoo Finance.