Unsuspecting Winners

Headed into September, it is tough to think of two more unloved charts than silver and one of the volatility ETF’s.

And yet, on their respective zoomed-out 30-minute charts, below, you can see the potential for rounded bottoms for a surprise rally into September.

I am flat both but actively considering building a position in them as early as tomorrow or next week,

See you after the bell for my video market recap.

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The 30-minute chart for the small cap ETF which we looked at yesterday still has that rising wedge setup in play.

As you can see on the IWM ETF, updated below, the rising wedge broke lower as small caps continue to lag the market. That may not matter much to the likes of DGLY or GPRO longs.

But after Labor Day I suspect it will, if bulls fail to drag the small caps up new highs along to compliment the S&P and Nasdaq.

What are you trading this afternoon?

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Courtesy of The PPT algorithm, here are the most current top five readings from my “12631 RELATIVE STRENGTH” custom-made screen, identifying which stocks are exuding some of the best performances to the market at-large at any given moment.

I look for stocks whose Daily PPT Hybrid Score surges, while the Weekly Hybrid has been negative over the past week. This can often yield stocks which are emerging from consolidations.

Members can click here to view and save the screen.

Sorted for at least 500,000 shares of daily average volume to ensure liquidity.

Please click on image to enlarge.

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Courtesy of reader and 12631 member “Rosenrush,” here is an excellent comment to my earlier post on the weakness we seen in both Macau and Las Vegas-related casinos:

Rosenrush

You can look to several reasons for the potential weakness in casinos…the primary catalyst right now is the crackdown on illegal funds flowing through Macau casinos. This is why you are seeing such pronounced weakness in names associated with Macau. There are estimates that up to 60% of the money wagered there is connected to the triads or other illegal means. By eliminating that stream, performance will suffer. Also note that there have been hints that they are going to get tougher in Vegas as well, which will also hurt.

Next, you have new competition coming to Vegas, although most isn’t in the immediate future…SLS just opened and is sure to take some of the young money, specifically from the nighlife, which has proven to be very profitable for WYNN (XS, Surrender) and LVS (Lavo, TAO). Resorts Worldwide opening in a few years is going to take a huge chunk of the asian high limit market away from everybody, although I’m not sure anybody is specifically worried about it just yet.

Next, you have some companies building ferris wheels as their saving grace, which is clearly not working. CZR is a short from now until bankruptcy. Any shot higher is a chance to short more.

 

I took a piece off of my TWTR long inside the 12631 Trading Service just now. @RaginCajun and a plethora of our members were also in the name, as it has been a true group effort.

The stock looks to be under increased accumulation, or large buying by institutions of size. It is impressive to see the name stand out in this morning’s overall soft tape. But, as we have been noting, Twitter has demonstrated for a while now that it can trade in its own world, oblivious to the rest of the market for better or worse.

I am trading around the position for now, for the sake of discipline into the holiday. But if these gains largely hold I will seek to add back to it next week and perhaps throughout autumn.

Here was my note to members just now:

Sold 1/4 of 3/4 Long $TWTR @ $49.77 from core $45.57 entry and $46.19 add to scale gains into strength. 1/2 position left now. Stop raised to core entry.

The major casinos continue to weaken, with LVS MPEL leading to the downside in recent weeks and threatening major topping out patterns on a  multi-year basis, perhaps out of concerns in Macau.

The issue then becomes whether the market may be hinting at larger concerns, perhaps at here in the U.S. in Las Vegas with the consumer.

Either way, a good tell will be the action in the likes of MGM WYNN, to see if they, too, break lower.

I remain short Wynn Resorts, inside 12631, seen on the daily chart below continually probing well-defined prior price support.

A basic tenet in technical analysis is that the more support is probed the more likely it is to eventually fail. Here, buyers have yet to stake their claim on this most recent test, despite previously showing up like a blackjack player to double-down on 11.

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