I can barely contain myself as this market is blowing minds right now.
Actually, it isn’t.
I apologize for my lack of penmanship as of late, matters of Gas Station and Doughnut Shoppe development require the bulk of my attention throughout the formal trading day. I’m playing and following along, unfortunately I just don’t have the creative energy to bang out posts between updating traffic models.
If you are enjoy my work, please follow me on Twitter and/or share it with your followers (just click on the “Tweet” button at the bottom, it’s simple). </shamelessgroveling>.
As for the market proper, I’m finding very little of interest to write about anyway. Aside from Bill Ackman’s well traveled genitalia being caught in the zipper (I can’t speak to that) and AAPL briefly dipping below 500, things have been pretty boring. Everything just keeps meandering along…I’m lying in wait, but I’m not seeing anything worth taking a chance on right now.
Recently I profiled a couple of stocks that I am actively monitoring. Both Redwood Trust (RWT) and Chicago Bridge and Iron (CBI) are currently within 3% of the area(s) where I’m looking to start a position.
As for the stocks themselves, I think RWT will pause as it closes in on the most recent high of 19.45, had way back in August of 2009. I’ll be keeping a close eye on that situation as it develops…a break to the upside in that region and she could go.
In CBI, the region between 49.50 and 50 is of key interest to me…I’m looking for similar “healthy” characteristics of stock behavior in that region.
As an aside, one of my projects that I have lined up is to see if I can use the daily ebbs and flows in PPT data to try and find (more) ideal spots for buying in these aforementioned (and other) regions.
I must say, the upgrades leaked a while back from PPT 2.0 look like they (the upgrades) will make this task much more enjoyable (coughcoughnudgenudge).
As for my portfolio…some thoughts:
For the day: -0.06%, month: +0.88%. And you thought I was being facetious when I said things were exciting.
-EM
aka CBI has entered the thin air of the low volume void.
My previous analysis of Tempur-pedic (TPX) and Redwood Trust (RWT) focused on stocks that had formed low volume nodes (LVN) in areas that were thinly traded in the middle of their historical pricing structure. Today’s look concerning CBI is quite different from those two. Here is the weekly showing nearly 10 years of price and volume data:
The only meaningful resistance remaining is represented by the two blue arrows found in February and May of 2008. Above 50, I foresee a push to all time highs in the low 60’s. While it is not likely to get there in a single swift move higher (i.e., stairs up, elevator down), there is little in the way of historical pricing equilibrium in this area to stop an advance.
My initial buy point is around 49.50. After that, I’m ideally looking to add chunks of shares and go the distance to an all-time high.
-EM
Here is a watchlist update as of 3:00 PM EST. CBI, GDOT, PCL (add) and RWT are all under 3% away from potential buy points.
Aside from my current positions, those are the stocks that I am watching the closest. Refer to the post that I wrote earlier today on RWT for an example of how I’m using this information.
Here is the latest volume pocket watchlist:
-EM
In yesterday’s watchlist update, I mentioned that Redwood Trust Inc. (RWT) was within 2% of my initial buy point. After reader “bobbin4apples” sarcastically commented about how useful said update was, I figured it was time to take a peek under the hood and hopefully provide some clarity about why I’m interested in buying some shares in this company.
This will be similar to my analysis of Tempur-pedic (TPX), however this time I would like to start with a view of the daily chart. This is backed out to show us the last two years of trading:
Here we can see that price initially stalled as it bumped up against previous resistance from early 2011 at 17. This can also be seen in the volume profile on the left…as there was a a ‘bulge’ of volume that existed and was expanded upon when the stock meandered back and forth in this area throughout most of December.
So we can conclude: “wow, this stock looks like it’s taking off to all-time highs”, right? As Lee Corso is apt to say: “not so fast my friend” (I actually ran into Lee in an elevator at the Biltmore Hotel in LA when he was there for the USC/Oregon game in 2010). Now, let’s take a look at the weekly chart. This will give us nearly 10 years of price and PbV data.
Wait. What? So this company was obviously taken to the woodshed along with most other REIT’s in 2008.
However, since then what has taken place could be viewed as the formation of a massive (4+ YEAR) bottoming pattern. Clearly, we have broken above the area of volume resistance and are now into the crisp, clean air of the low volume vacuum.
Currently my by point sits at 19.40 (which also coincides with the high from the bottoming formation, seen by the magenta arrow). Instead of jumping in immediately upon a break from a high volume region into a low volume region, I instituted the placement of a buffer to avoid getting shaken around by possible resistance. This modification was instituted because I am looking to catch the ‘meat’ of a move, not every single single tick from the bottom to the top.
If this stock can clear 19.5, what is to stop it from going to 30? Sure, one could say “common sense and logic”…and that would be a reasonable hypothesis. But we are also entering the “no logic” zone where demand far exceeds supply.
This being an REIT, there is likely going to be a decent dividend…which at these prices, RWT yields around 5.3%…so we have that going for us as well.
I hope this helps to provide some insight into the the stocks I’m maintaining on my watchlist.
Yes, these trades will take time to materialize and are not going to light your hair on fire with excitement. Maybe this shit is boring you to death…and that’s fine by me. I’m here to make money, not to entertain you with high-speed cocaine-addled trading. Check back in with me in December and we’ll see what I was able to accomplish.
I had enough hair raising excitement in 2012 to the tune of beating the shit out of my account balance…so I have decided to take a much more conservative and patient approach in this new year.
My best to you all
-EM
In Group A, i.e., the “volume pocket watchlist”, RWT is closing in on my “buy area”, now a bit over 2% off.
In Group B (all-time high watchlist), there are several stocks that are consolidating just below all-time highs. Those stocks include: CHMT, ENS, FEIC, FUL, GPI, GPOR, HCSG, KMX, MHLD, MYL, SFUN, SIG, TRMB.
What the hell does this mean? Good question. I’m not really sure yet, seeing that I am in the process of devising a risk management plan to trade these stocks. Nevertheless, keep your eye on them as potential “vacuum” breakout candidates.
As always: yellow = new addition to the list, blue = within 5% of “watch price”, green = currently above watch price
I apologize for my lack of verbosity, but I’m on screaming 3-month-old detail this evening…and it tis a more “eventful” one.
In group A, there are only a a handful of stocks that are within 5% of my noted price threshold. Notice the inclusion of former portfolio position FSS along with a new, more improved entry price.
In group B, ASGN just broke out to an all-time high from a brief consolidation…keep an eye on that if you are so inclined.
As always, a yellow highlight is a new addition to the list.
-EM
Percentages highlighted in blue are within 5%, Those highlighted in green are above the watch price.
Volume Pocket list:
All-time high list:
As I mentioned last night, I was busy separating my watchlist into two groups. This morning, I have finished the process and can provide an update.
In “Group A” I am watching stocks that are approaching or are currently in a low volume area. For reasons that I will reveal at a later date, I have instituted a buffer on the bottom (and top) of the low volume region, that is why the price threshold for all of these has changed since the previous update. With this change, the prices listed below can now be considered purely as “buy points”.
Clearly, some of these names still have a significant way to go before they reach the desired price level. That’s ok…I’m looking at the big picture here and will continue to monitor them in the event they do eventually reach those levels. Blue highlights are less than 5% away, and keeping with my background in traffic, green means “go”.
The “Group B” watchlist consists of stocks that are on the threshold of all-time highs. I am watching these because I have become quite interested in how the price of a stock will behave once it enters an area that it has never traded before. My initial plan for this list is to use it strictly for observation purposes more than as a trading tool.
I’m very interested in how the dynamics of supply and demand are affected by the fact that there have never been buyers or sellers in these stocks, at these prices. Basically, everyone who has ever owned a share in these companies is a winner. I’m very intrigued by how this unfolds.
The color formatting in this table is the same as before.
More on this to come. In the meantime, trade ’em well.
-EM
I do not have a watchlist update again this evening, but rest assured, I have been hard at work.
Currently, I am separating stocks based on the two Price by Volume criteria that I put forth in this post. Since my expectations are different for each particular scenario, it makes more sense to keep them in unique sets.
I will have them updated and ready for your perusal prior to the opening bell tomorrow.
Have a good evening.
-EM
I can barely contain myself as this market is blowing minds right now.
Actually, it isn’t.
I apologize for my lack of penmanship as of late, matters of Gas Station and Doughnut Shoppe development require the bulk of my attention throughout the formal trading day. I’m playing and following along, unfortunately I just don’t have the creative energy to bang out posts between updating traffic models.
If you are enjoy my work, please follow me on Twitter and/or share it with your followers (just click on the “Tweet” button at the bottom, it’s simple). </shamelessgroveling>.
As for the market proper, I’m finding very little of interest to write about anyway. Aside from Bill Ackman’s well traveled genitalia being caught in the zipper (I can’t speak to that) and AAPL briefly dipping below 500, things have been pretty boring. Everything just keeps meandering along…I’m lying in wait, but I’m not seeing anything worth taking a chance on right now.
Recently I profiled a couple of stocks that I am actively monitoring. Both Redwood Trust (RWT) and Chicago Bridge and Iron (CBI) are currently within 3% of the area(s) where I’m looking to start a position.
As for the stocks themselves, I think RWT will pause as it closes in on the most recent high of 19.45, had way back in August of 2009. I’ll be keeping a close eye on that situation as it develops…a break to the upside in that region and she could go.
In CBI, the region between 49.50 and 50 is of key interest to me…I’m looking for similar “healthy” characteristics of stock behavior in that region.
As an aside, one of my projects that I have lined up is to see if I can use the daily ebbs and flows in PPT data to try and find (more) ideal spots for buying in these aforementioned (and other) regions.
I must say, the upgrades leaked a while back from PPT 2.0 look like they (the upgrades) will make this task much more enjoyable (coughcoughnudgenudge).
As for my portfolio…some thoughts:
For the day: -0.06%, month: +0.88%. And you thought I was being facetious when I said things were exciting.
-EM
aka CBI has entered the thin air of the low volume void.
My previous analysis of Tempur-pedic (TPX) and Redwood Trust (RWT) focused on stocks that had formed low volume nodes (LVN) in areas that were thinly traded in the middle of their historical pricing structure. Today’s look concerning CBI is quite different from those two. Here is the weekly showing nearly 10 years of price and volume data:
The only meaningful resistance remaining is represented by the two blue arrows found in February and May of 2008. Above 50, I foresee a push to all time highs in the low 60’s. While it is not likely to get there in a single swift move higher (i.e., stairs up, elevator down), there is little in the way of historical pricing equilibrium in this area to stop an advance.
My initial buy point is around 49.50. After that, I’m ideally looking to add chunks of shares and go the distance to an all-time high.
-EM
Here is a watchlist update as of 3:00 PM EST. CBI, GDOT, PCL (add) and RWT are all under 3% away from potential buy points.
Aside from my current positions, those are the stocks that I am watching the closest. Refer to the post that I wrote earlier today on RWT for an example of how I’m using this information.
Here is the latest volume pocket watchlist:
-EM
In yesterday’s watchlist update, I mentioned that Redwood Trust Inc. (RWT) was within 2% of my initial buy point. After reader “bobbin4apples” sarcastically commented about how useful said update was, I figured it was time to take a peek under the hood and hopefully provide some clarity about why I’m interested in buying some shares in this company.
This will be similar to my analysis of Tempur-pedic (TPX), however this time I would like to start with a view of the daily chart. This is backed out to show us the last two years of trading:
Here we can see that price initially stalled as it bumped up against previous resistance from early 2011 at 17. This can also be seen in the volume profile on the left…as there was a a ‘bulge’ of volume that existed and was expanded upon when the stock meandered back and forth in this area throughout most of December.
So we can conclude: “wow, this stock looks like it’s taking off to all-time highs”, right? As Lee Corso is apt to say: “not so fast my friend” (I actually ran into Lee in an elevator at the Biltmore Hotel in LA when he was there for the USC/Oregon game in 2010). Now, let’s take a look at the weekly chart. This will give us nearly 10 years of price and PbV data.
Wait. What? So this company was obviously taken to the woodshed along with most other REIT’s in 2008.
However, since then what has taken place could be viewed as the formation of a massive (4+ YEAR) bottoming pattern. Clearly, we have broken above the area of volume resistance and are now into the crisp, clean air of the low volume vacuum.
Currently my by point sits at 19.40 (which also coincides with the high from the bottoming formation, seen by the magenta arrow). Instead of jumping in immediately upon a break from a high volume region into a low volume region, I instituted the placement of a buffer to avoid getting shaken around by possible resistance. This modification was instituted because I am looking to catch the ‘meat’ of a move, not every single single tick from the bottom to the top.
If this stock can clear 19.5, what is to stop it from going to 30? Sure, one could say “common sense and logic”…and that would be a reasonable hypothesis. But we are also entering the “no logic” zone where demand far exceeds supply.
This being an REIT, there is likely going to be a decent dividend…which at these prices, RWT yields around 5.3%…so we have that going for us as well.
I hope this helps to provide some insight into the the stocks I’m maintaining on my watchlist.
Yes, these trades will take time to materialize and are not going to light your hair on fire with excitement. Maybe this shit is boring you to death…and that’s fine by me. I’m here to make money, not to entertain you with high-speed cocaine-addled trading. Check back in with me in December and we’ll see what I was able to accomplish.
I had enough hair raising excitement in 2012 to the tune of beating the shit out of my account balance…so I have decided to take a much more conservative and patient approach in this new year.
My best to you all
-EM
In Group A, i.e., the “volume pocket watchlist”, RWT is closing in on my “buy area”, now a bit over 2% off.
In Group B (all-time high watchlist), there are several stocks that are consolidating just below all-time highs. Those stocks include: CHMT, ENS, FEIC, FUL, GPI, GPOR, HCSG, KMX, MHLD, MYL, SFUN, SIG, TRMB.
What the hell does this mean? Good question. I’m not really sure yet, seeing that I am in the process of devising a risk management plan to trade these stocks. Nevertheless, keep your eye on them as potential “vacuum” breakout candidates.
As always: yellow = new addition to the list, blue = within 5% of “watch price”, green = currently above watch price
I apologize for my lack of verbosity, but I’m on screaming 3-month-old detail this evening…and it tis a more “eventful” one.
In group A, there are only a a handful of stocks that are within 5% of my noted price threshold. Notice the inclusion of former portfolio position FSS along with a new, more improved entry price.
In group B, ASGN just broke out to an all-time high from a brief consolidation…keep an eye on that if you are so inclined.
As always, a yellow highlight is a new addition to the list.
-EM
Percentages highlighted in blue are within 5%, Those highlighted in green are above the watch price.
Volume Pocket list:
All-time high list:
As I mentioned last night, I was busy separating my watchlist into two groups. This morning, I have finished the process and can provide an update.
In “Group A” I am watching stocks that are approaching or are currently in a low volume area. For reasons that I will reveal at a later date, I have instituted a buffer on the bottom (and top) of the low volume region, that is why the price threshold for all of these has changed since the previous update. With this change, the prices listed below can now be considered purely as “buy points”.
Clearly, some of these names still have a significant way to go before they reach the desired price level. That’s ok…I’m looking at the big picture here and will continue to monitor them in the event they do eventually reach those levels. Blue highlights are less than 5% away, and keeping with my background in traffic, green means “go”.
The “Group B” watchlist consists of stocks that are on the threshold of all-time highs. I am watching these because I have become quite interested in how the price of a stock will behave once it enters an area that it has never traded before. My initial plan for this list is to use it strictly for observation purposes more than as a trading tool.
I’m very interested in how the dynamics of supply and demand are affected by the fact that there have never been buyers or sellers in these stocks, at these prices. Basically, everyone who has ever owned a share in these companies is a winner. I’m very intrigued by how this unfolds.
The color formatting in this table is the same as before.
More on this to come. In the meantime, trade ’em well.
-EM
I do not have a watchlist update again this evening, but rest assured, I have been hard at work.
Currently, I am separating stocks based on the two Price by Volume criteria that I put forth in this post. Since my expectations are different for each particular scenario, it makes more sense to keep them in unique sets.
I will have them updated and ready for your perusal prior to the opening bell tomorrow.
Have a good evening.
-EM
