Ornery Sellers

AMZN C are two suspiciously weak names of late, both of which we have been tracking.

Today, that continues to be the case. If the market rolls over, I view them both as short setups as they could easily break down from the consolidations in corrective patters highlighted below.

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With short squeeze plays still in vogue, as well as beaten-down plays, the lowly Aeropostale is now ripe for a relief squeeze rally higher.

On the abysmal daily chart, below, you can see the low-priced, heavily-shorted stock basing out with potential for a trashy summer rally over $3.60.

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Impressive moves out of ILMN SUPN from technical bases this morning, seen on their respective daily charts, below.

I am looking to see if the stocks can hold these gains into the afternoon.

What are you trading this morning?

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The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday. 

The “benign grind,” of this bull market, as we had discussed in prior Strategy Sessions as a bull scenario,
continues to assert itself as resilient buyers remain in control, overall, and any hint of a pullback has been quickly contained. Technically, leaders such as AMZN PCLN are still in corrective patterns and are not leading to the upside, though other marquee issues such asFB GOOG TSLA Z have made impressive strides to improve of late.

Our overall thesis of a mature, if not ninth inning, bull market, remains intact. However, the risk to shorts is that the current bull ends with a “bang” instead of a “whimper,” in the form of a blow-off top.

That said, I suspect we need to place that analysis on the back burner until after the Fourth of July holiday. 

The main issue for us right now, therefore, headed into the coming week is the shortened duration of the trading hours.

Holiday-shortened weeks typically have a slightly bullish bias, with drifting, low volume sessions on the major averages and indeed many individual stocks. Momentum traders tend to congregate around smallish, high beta issues which are heavily-shorted in the hopes of capturing a quick and furious squeeze to the upside. By and large, short-sellers do not thrive in holiday weeks.

Generally speaking, it is often more useful to focus on individual stock setups in holiday weeks than it is to toil over the major averages. While a contrarian view may be that the major averages will make a large directional move this week, catching the majority off-guard, this weekend’s Strategy Session will focus on individual setups for traders and go with historical precedent.

With the market closing early on Thursday, at 1pm EST, as well as for the full session on Friday, you could easily see a scenario where the tape is a proverbial ghost town by Wednesday afternoon, with plenty of large market players already on the beach or tending to a potato salad.

Thus, traders who are trading until the closing bell on Thursday should likely focus on opportunistic individual setups.

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After reading Jordan Belfort’s entertaining autobiography of the same name back in 2007, my expectations for The Wolf of Wall Street (2013) were fairly high. Then again, my expectations will always be high for any film starring Leonardo DiCaprio and directed by Martin Scorsese. Overall, it was a pleasant viewing experience.

As I have posted before, my favorite film of all-time is Goodfellas (1990), also directed by Scorsese, and also based on a real-life story. The parallels between Goodfellas and The Wolf of Wall Street are interesting, insofar as the cataloguing of an individual who chooses a path to criminal behavior as boys/young men and never looks back as the crimes pile up.

Whereas Goodfellas spent a bit more time fleshing out when things went awry for Henry Hill and his gang (and of course dealt with violent crimes, unlike the white collar crimes of Belfort and his crew), The Wolf of Wall Street chose to focus on the intricacies of Belfort’s cunning, extravagant and, ultimately, doomed stock-broker empire.

To be clear, I am not placing this one on the same level as Goodfellas. Much like Casino (1995), Scorsese seems to be drawing on his Goodfellas success a bit too much.

But on its own merits, The Wolf of Wall Street is a very entertaining film featuring an impressive cast, certainly worthy of a viewing even if it is over three hours long.

DiCaprio shows his acting range, once again, and asserts himself to be as estimable as any leading man in Hollywood over the past decade, despite the many snubs by the Academy of Motion Picture Arts and Sciences at the Oscars. Also impressive are Jonah Hill, Margot Robbie, Rob Reiner, and Kyle Chandler.

Interesting talk from the mid-1990’s by the legendary “ten-bagger,” Peter Lynch.