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Enjoy tonight’s video, and enjoy your evening.
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I have a bunch of trades on and am probing several theses as the unofficial end of summer turns into autumn.
Out of all of them, though, the long coffee thesis looks to be off to the most explosive start.
We had a great day of trading inside 12631 today, with some nice winners and ducking out of laggards unscathed.
Be sure to check out my video market recap after the closing bell today for more analysis and ideas.
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As strong as Treasuries have been in 2014, this Monday gap lower in TLT may very well be a bearish breakaway gap lower.
My view continues to be that 2014 has been a sentiment unwind in the bond market, considering how bearish (including me) everyone became late-last year in terms of expecting higher rates.
As usual, the rally has lasted longer than I expected, and I side-stepped fighting the tape by quickly stopping out of any short attempts I made.
But the monthly TLT chart shows this potential bear market rally may be stopping dead in its tracks at the up-sloping neckline of the busted, multi-year head and shoulders top.
Bond bulls may not be able to fly away higher so fast this time…
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It is time to fight back against the slow, snooty service at your local Starbucks.
In all seriousness, though, I went short the name earlier today in part based on the daily chart technical setup, below.
Note the potential head and shoulders top targeting ht $72/$73 area.
In addition, the name could get hit on the same consumer issues the major casinos are getting hit on (I know they have Macau issues, but still some Vegas concerns).
Finally, if the rally in the coffee commodity has legs Starbucks could easily see sympathy selling, even if they have coffee prices already locked in at a low rate.
My cover-stop is a close over $79.
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In the face of a mixed, if not soft, tape this today, individual issues like DGLY EFUT GPRO LOCO are going bonkers to the upside, among a few others.
Given the sheer size of these moves today, on top of previous action in DGLY, I view it as a cautionary sign of a market setting up to trap wild-eyed momentum chasers.
In addition to casinos, a name like MCD is threatening a multi-year breakdown in its own right. After a tremendous bull run since 2003, the stock is busting down through a rising wedge on the monthly chart, below. I view the stock as a short setup going forward, as long as $97 holds as resistance.
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Here are some updates from trades I have discussed on this blog, but make in real-time inside the 12631 Trading Service.
I took down the rest of my profits in a TWTR long earlier, over $51, for about a 12% win. The stock is acting very well but I wanted to take down the gains when I had them and revisit it if and when the stock digests.
I covered some more of my WYNN short into this mini-swoon as buyers are getting stuffed intraday. I still have a core position on, though, as the stock positions for a major breakdown on a multi-year basis.
I covered a starter UNP short for a very small loss, and sold an INVN long for a contained loss as both plays did not go my way. I elected to take risk off the table instead of holding and hoping.
As it stands now, I am looking for more coffee strength and some more weakness in bonds this week.
