The stock market is flirting with all-time highs again… but believe it not… the IPO market has been running even hotter.
IPO stands for initial public offering. An IPO refers to the process of a company that goes public offering shares of its corporation to investors as a new stock issuance.
In most cases, the main purpose of an IPO is to raise capital for the business from investors who are willing to take on the risk of investing in a newer public company. The process can also allow an investor to get involved in a company before the cost of its stock shares goes up.
It seems like every week, a new and exciting company becomes publicly available for us to trade.
Some well-known names like Robinhood, Airbnb, Peloton (set to IPO on Sept. 26), and Postmates are upcoming IPOs as they will soon be available for our trading pleasure…
…we’ve already seen some unicorns hit the ground running — Beyond Meat (BYND), CrowdStrike (CRWD), Zoom (ZM) — are all part of the triple-digit return club…
But it’s been hard to separate the ones that will skyrocket from the ones that fizzle (remember Uber and Lyft)…
… if you don’t have the right system you can forget about trading IPOs.
Before going public, a company is privately held and traded. A private company can usually grow through investments from its founders or their family and friends. When the company is able to withstand the rigorous SEC regulations, it can start the process of going public. In most cases, a business will wait until it reaches a value of $1 billion or more, which is referred to as unicorn status, although those that are profitable and strong may go public before reaching that valuation.
When the company does go public, this process is referred to as an IPO. The initial shares of its stock become available to investors on the major stock market.
The successful IPO traders will sit at their desks for hours on end, sifting through research, and studying legal and accounting documents.
How do they do that?
Well, one of the things these traders do is drown themselves in the IPO Prospectus — what the SEC calls for Form S-1… in it, there are hundreds of pages (sometimes thousands)…
And you better believe there are hidden clues buried in those pages.
If you have the right system, you’re able to pinpoint exactly which IPO stocks will pop and have a Beyond Meat-like move.
For example, Uber Technologies (UBER), one of the more recent IPOs, released a whopping 300-page prospectus — and if looked closely enough… you would have seen red flags everywhere.
Peloton just released their prospectus… and it’s over 150 pages long.
But who has the time to read all that… let alone have the legal, accounting, and investing know how to make an informed decision on these company stocks?
Our answer — Ben Sturgill.
He developed a simple “green, yellow or red” light pattern trading system for trading IPO stocks.
Ben has also figured out the life cycle of an IPO — identifying the three phases of an IPO and developed a way to profit consistently on the newest stocks…
His IPO Payday system takes advantage of little known patterns that happen in IPO stocks… and once detected… can turn into mega profitable trading opportunities.
With so many IPOs set to hit the market, there is no better time than right now to learn how to take advantage of the opportunities in stocks like Beyond Meat and Zoom.
With everyone rotating out of bonds and gold to chase returns… many are wondering if it’s time to chase stocks.
but the thing is, sometimes the trend is not your friend, especially when it seems as if traders are just following each other.
The thing is… you don’t have to trade the market and focus on the flood of news headlines that we get every day.
So what do you do if you’re not trading exchange-traded funds (ETFs) like the SPDR S&P 500 ETF (SPY), TLT — the long-term bond ETF, GLD (the gold tracking ETF), and QQQ (a fund that tracks tech stocks)?
Well, there’s actually a bevy of choices for you…
For example, Jeff Williams — the Penny Pro — has figured out a way to boost your lifestyle by trading stocks that don’t care what the market is doing.
You see, Jeff is able to find penny stocks with massive gap-up potential at the same time… every day. If you know anything about these stocks, they move to the beat of their own drum — and it’s one of the ways to avoid getting swept up by the herd.
Another interesting way to avoid the herd mentality is to focus on IPOs — newly-listed stocks that hit the market all the time.
When traders hear about IPOs, they automatically think about the largest ones… but the thing is, there are so many other opportunities in IPOs — and for some reason, so many traders don’t know how IPOs operate… and they’re missing out on some lucrative opportunities.
There are so many IPOs set to hit the market very soon — Peloton (PTON) is set to IPO later this month… and we’ve got 5 IPOs set to hit the market this week… and you don’t want to miss out on what IPO expert Ben Sturgill has to say about them.
Don’t think just because everyone is talking about the market… you have to trade it because there are plenty of other opportunities out there.
Dear Insider, Jeff Bishop here.
I guess the market wasn’t ready to roll over and die!
SPY – the ETF that tracks the S&P 500 – had been stuck between support at $282 (the Death Line) and resistance at $294 for about a month.
And most “market experts” were calling for the market to head lower.
And why wouldn’t it?
All the headlines lately have been about inverted yields, the trade war, and a slowing worldwide economy.
But I hope you didn’t listen to any of it — I sure didn’t.
Let’s see how that played out…
Just as I expected, stocks rallied hard as soon as they breached resistance. Shorts were caught off guard and had to cover their positions… and we’ve kept going higher since.
The lesson here is pretty clear — when everyone thinks something won’t happen, it usually does.
I’m sure many traders thought betting against SPY near resistance was a “no-brainer.” I mean, look at how well the old $294 resistance level had held up the previous three attempts.
But markets usually don’t do the obvious thing. If they did, most traders would be millionaires.
Once you understand that and know how to position yourself against the herd, you’ll be a card-carrying contrarian as well.
And it isn’t just SPY signaling the market is in Party Mode.
Before September, traders feared the worst. Investors were pouring into “safe havens” like bonds and gold while selling riskier assets like small-cap stocks.
Check this chart out…
In August, bonds (blue) jumped about 12%, gold (yellow) was up 6% and small-cap stocks (red) were down about 6%.
And during this time The Volatility Index (VIX) — also known as the fear index — was up about 40% (bottom of the chart).
But since we breached resistance in early September, we’ve had a full 180:
Small-caps are booming and gold, bonds, and volatility have plummeted.
In other words, markets are partying!
Stocks might need a bit of a breather here, and I’d expect them to consolidate around the SPY $300 level before making their next move higher.
And I’ll be ready…
He’s an IPO trading expert — and when markets are in Party Mode — you can expect cash to flow into these fast-growing companies.
Even over the past 60 days, which haven’t been kind to most stocks, there have been about two dozen recent IPOs that have delivered triple-digit gains.
Obviously, you can’t just buy every IPO that hits the market and expect to make money. There’s more to it… and Ben covered it all in this interview.
Here are just a few things you missed if you didn’t attend the event:
The replay of the training session is coming down soon, so make sure you watch it now while you still can.
Enjoy your weekend!
Jeff Bishop & Jason Bond