A Corporate Paper Platter Drizzled with Weak Sauce

0

It’s the same old story in a bull market—Negative divergences do not matter until they do, and then they matter in such a way where you wish you had respected them previously.

As it pertains to junk and high yield corporate paper, they had horrendous weeks by any metric, for all intents and purposes staging swoons. Typically, that type of price action does not bode well for risk appetite, including equities. Nonetheless, it remains to be seen if this resilient bull can shrug off the junk bond action, as well.

Still, the weekly chart for the high yield corporate paper ETF is flashing a fairly textbook rising wedge breakdown, dating back to the 2009 lows.

The 12631 Trading Service and Weekly Strategy Session members have been paying close attention to bearish divergences for a while now, and we are seeing the major averages beginning to succumb to them a bit. I will be fleshing out and updating this thesis soon.

Have a great weekend!

____________________________________________________________

HYG

All You Can Eat, Baby

men

My only position walking into today was a long TZA trade (triple-short the Russell 2000 Index), taking inside 12631 yesterday and playing off my “All You Can Eat Divergences” blog post from yesterday morning discussing the many small and micro cap divergences in the market.

Just now, I scaled a piece of the position. I still think small caps are a major warning sign here, with the potential for multi-year tops very in play here and with the micro-caps, especially. I retain a small piece of the position and will soon decide whether to hold through the weekend.

Here was my note to members:

Sold 1/2 of 1/2 position Long $TZA @ $17.11 from $16.42 entry to lock in part of the win into this small cap sell off. 1/4 position left now.
12:52:09pm EST on Aug 1, 2014

Might as Well Happen on a Summer Friday…

The 12631 Trading Service server has been acting about as efficiently and productively of late as Lindsay Lohan and Justin Bieber leading a group of kids at a summer sleepaway camp in the Catskills.

We are working diligently to resolve the issue and apologize to all members for the inconvenience. Thank you for your patience and loyalty.

What are your top trade ideas this morning?

It’s All Good in the Bad News Hood

BoyzNTHood_197Pyxurz

After this morning’s jobs number, the issue widely-discussed again is whether bad news is good news for the ‘QE market,” or instead if bad is bad and good is good, or a various combinations of all of them.

If anything, it seems as though trying to sort through that thinking is akin to Abbott & Costello’s “Who’s On First” skit.

What we do know is that the market chopping around today after a trend day lower yesterday, without seeing much of a convincing bounce yet. I am not expecting much from this summer Friday, and am still giving the nod towards the S&P and Dow following the Russell lower in August.

A good test for bulls will be to see if TSLA can hold this earnings pop for a potential breakout from the triangle we looked at yesterday.

Quick Bounce Plays

If you are looking for some (quick) support buys here, a good algorithm screen to have, courtesy of The PPT, is one I made called “12631 Quick Bounce Plays.”

In the screen, I am looking to isolate stocks with positive daily Hybrid PPT scores, but negative weekly ones.

Thus, they are ripe for a quick bounce as the momentum seems to be turning, if only for a bit. I also screen for PPT Relative Strength scores, as well as volume and % from 50 day moving average.

Members please click here to view and save the screen

Here are the readings as of Thursday’s close. Remember, we are talking about short-term flips here, not high quality, multi-week swings. Keep those stop-losses in place.

NOTE: The screen only gave us one name, AKAM. Perhaps that is a sign the market is not yet ready for a serious bounce?

(Click on image to enlarge)

________________________________________________________________

2014-08-01_0039

 

Latest Titanic Readings in Case of Iceberg

Titanic-sinks1

Here are some actionable short ideas on this list, especially if the market sees another day of weakness.

Courtesy of The PPT algorithm, here are some very aggressive ideas for short trades headed into Wednesday If you are not comfortable shorting (especially in a bull market), there is nothing wrong with taking a pass. Keep those cover-stops in place.

Nonetheless, a good chunk of readers are always looking for short ideas.

Members of The PPT can click here to view and save this “Titanic” Screen, as I named it when I created it a few years back. The screen isolates stocks vulnerable to further weakness.

Please click on image to enlarge 

________________________________________________________

2014-08-01_0029

A Corporate Paper Platter Drizzled with Weak Sauce

0

It’s the same old story in a bull market—Negative divergences do not matter until they do, and then they matter in such a way where you wish you had respected them previously.

As it pertains to junk and high yield corporate paper, they had horrendous weeks by any metric, for all intents and purposes staging swoons. Typically, that type of price action does not bode well for risk appetite, including equities. Nonetheless, it remains to be seen if this resilient bull can shrug off the junk bond action, as well.

Still, the weekly chart for the high yield corporate paper ETF is flashing a fairly textbook rising wedge breakdown, dating back to the 2009 lows.

The 12631 Trading Service and Weekly Strategy Session members have been paying close attention to bearish divergences for a while now, and we are seeing the major averages beginning to succumb to them a bit. I will be fleshing out and updating this thesis soon.

Have a great weekend!

____________________________________________________________

HYG

All You Can Eat, Baby

men

My only position walking into today was a long TZA trade (triple-short the Russell 2000 Index), taking inside 12631 yesterday and playing off my “All You Can Eat Divergences” blog post from yesterday morning discussing the many small and micro cap divergences in the market.

Just now, I scaled a piece of the position. I still think small caps are a major warning sign here, with the potential for multi-year tops very in play here and with the micro-caps, especially. I retain a small piece of the position and will soon decide whether to hold through the weekend.

Here was my note to members:

Sold 1/2 of 1/2 position Long $TZA @ $17.11 from $16.42 entry to lock in part of the win into this small cap sell off. 1/4 position left now.
12:52:09pm EST on Aug 1, 2014

Might as Well Happen on a Summer Friday…

The 12631 Trading Service server has been acting about as efficiently and productively of late as Lindsay Lohan and Justin Bieber leading a group of kids at a summer sleepaway camp in the Catskills.

We are working diligently to resolve the issue and apologize to all members for the inconvenience. Thank you for your patience and loyalty.

What are your top trade ideas this morning?

It’s All Good in the Bad News Hood

BoyzNTHood_197Pyxurz

After this morning’s jobs number, the issue widely-discussed again is whether bad news is good news for the ‘QE market,” or instead if bad is bad and good is good, or a various combinations of all of them.

If anything, it seems as though trying to sort through that thinking is akin to Abbott & Costello’s “Who’s On First” skit.

What we do know is that the market chopping around today after a trend day lower yesterday, without seeing much of a convincing bounce yet. I am not expecting much from this summer Friday, and am still giving the nod towards the S&P and Dow following the Russell lower in August.

A good test for bulls will be to see if TSLA can hold this earnings pop for a potential breakout from the triangle we looked at yesterday.

Quick Bounce Plays

If you are looking for some (quick) support buys here, a good algorithm screen to have, courtesy of The PPT, is one I made called “12631 Quick Bounce Plays.”

In the screen, I am looking to isolate stocks with positive daily Hybrid PPT scores, but negative weekly ones.

Thus, they are ripe for a quick bounce as the momentum seems to be turning, if only for a bit. I also screen for PPT Relative Strength scores, as well as volume and % from 50 day moving average.

Members please click here to view and save the screen

Here are the readings as of Thursday’s close. Remember, we are talking about short-term flips here, not high quality, multi-week swings. Keep those stop-losses in place.

NOTE: The screen only gave us one name, AKAM. Perhaps that is a sign the market is not yet ready for a serious bounce?

(Click on image to enlarge)

________________________________________________________________

2014-08-01_0039

 

Latest Titanic Readings in Case of Iceberg

Titanic-sinks1

Here are some actionable short ideas on this list, especially if the market sees another day of weakness.

Courtesy of The PPT algorithm, here are some very aggressive ideas for short trades headed into Wednesday If you are not comfortable shorting (especially in a bull market), there is nothing wrong with taking a pass. Keep those cover-stops in place.

Nonetheless, a good chunk of readers are always looking for short ideas.

Members of The PPT can click here to view and save this “Titanic” Screen, as I named it when I created it a few years back. The screen isolates stocks vulnerable to further weakness.

Please click on image to enlarge 

________________________________________________________

2014-08-01_0029