Approaching Significant Resistance

I don’t mind giving you an insight into what The PPT is saying, every so often. As you could imagine, I try to preserve the secrecy of the algorithms for paying members as much as possible. Every so often, however, I permit myself the luxury of throwing you dogs a bone.

Since Friday, the system flagged an OVERBOUGHT signal, based on historical precedence. So you know, OB signals are less reliable than the OS, due to the nature of the upward trending market. Nevertheless, over the past 36 months, this level (3.25) of OB has resulted in the market trading down 64% of the time for an average decline of 0.6%. At a minimum, this signal should alert users to potential stoppage in the frenetic rally. More recently, the OB scores have a higher ceiling, near 3.30, and we are NOT overbought on the 3,6 and 12 month algos– just yet.

All that aside, the market faces significant headwinds during this years Jackson Hole meeting. Everyone was hoping for QE3; but I think it is an impossibility for the Fed to do anything with the Dow above 13,000. If Bernanke moves, commodities will skyrocket and stocks will surge. If the Fed sits tight and does nothing, stocks are going lower.

Earnings season has been a minefield for investors and many of you are without legs, wheeling yourselves around like retards in a basketball court.

ATTENTION DISABLED INVESTORS OF THWE WORLD: ease up on your wheels and park that chair in the blue zone. The high probability trade is over.

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We are not cohorts with the likes of marauders, felons and egotistical curators. All executions performed at iBankCoin are done for the good of mankind, and more specifically the readers here.

Friends,

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The market went bananas to the upside based on more of the same bailout talk. I bought some JACK because I believe in the Qdoba story and will add to shares, if they should trade lower from here. Aside from that, I edged higher by 0.5%, despite the calamitous tone of VXX, in an other wise benignant market– on the Lord’s day of the 27th of July, 2012.

A bet on the obese man, opting for JACK-shit, instead of CMG.

This is exactly the type of market that I hate. I don’t like misdirection and I certainly do not like failed Armageddons. Nevertheless, the recent 6 month OS reading in The PPT proved sagely. I should have taken my computer brain’s advice.

It is of no use to lament over spilt milk.

As the market stretches above 13,000, just know we are at the upper limits of the recent trading range. Although I am not a big proponent of technical analysis, I do respect market forces that are guided by it. Should we move higher from here, there is a strong likelihood that all hell will break loose to the upside. The number one driver of stocks is the prospect that the Fed will enact QE3.

I cannot see Ben emptying his clips with the Dow above 13,000. It makes no sense.

In the meantime, I am building a watchlist and will put some more money to work next week, in the event we break out. Until then, I am going to assume the recent trading range is intact and stocks are heading lower, over the next 5 trading days.

With the Dow nearing 13,000, the United Steaks of America clamors for more quantitative easing from the Fed. It’s been frightful out there, frankly, as the market tends to go down every so often. Generally speaking, people don’t like it when stocks go down. Having said that, I’m loaded up with this VXX and it’s giving me the fucking business. It is a 100% certainty that when I buy VXX the market is soon to explode to the upside. I am not mad at myself for it. Instead, it is something to behold, a marvel that cannot be explained through rational means.

Effectively, I stymied my chances at powering forward, hedging myself against success because I was “worried” about Spain and Italy crashing through the floor boards. Plainly, I permitted the “news” to get in the way of the media making up their own facts. As such, I now find myself 13% in the hole on this bitch of a whore, VXX, taxing me for all of my bread and wine.

Aside from that, I am progressively milking the farmer through LNN and enjoy the great leisure EL and EXK affords me.

I am 32% cash and 9% stupid, the rest is long stocks. I need EXK to melt higher; but the Gods deny me of my innate right to hedonism. They make it hard on me, teaching me the lessons of humility by running over my positions with Chevy Impalas (no Stocksage), every so often. As the once great Dog-Gods built pyramids in the desert, I too will erect (no WNR) great victories through purchase.

Give me a day or two to remove the webs of cob from my skull and you shall see some of the greatest trading of your pathetic lives!

By the way, we made it easier for you to toggle through the scrolling data above. Go to the front page and put your mouse on the data and it will expand to show you everything, AND MORE.

Futures are somewhat higher. However, I have my reservations about getting back in with any size. Nevertheless, I am going to show you some interesting things, using The PPT (why the hell not? We’re all charitable here).

First, here are the top rated stocks by hybrid score (a combination of both fundamental and technical ratings, proprietary to the system). For added convenience, I narrowed that list down to companies that have 20%+ quarterly revenue growth with ROE’s greater than 10 and minimum market cap of $500 million.

Next, here are the top rated Industries by the system, again sorted by hybrid score.

Out of that list, my favorite industry happens to be silver. I am afraid of werewolves and have stockpiled shares of a certain silver company.

Here are the current member rankings of the silver industry.

As you can see, EXK is wedged in there at no. 6, with a score of 3.71 (anything rated above 3 is a “buy”). However, the score wasn’t always this high. As a matter of fact, just a few days ago, when I added to my position by 33%, the score was considerably lower and was flagged as being OVERSOLD by the system (the OVERBOUGHT/OVERSOLD flags act like rubber bands, helping users discern buy and sell points for stocks, based upon historical precedence).

If you look below at the technical score of 1.00 on 7/20, that represented the lowest tech score over the past 12 months, qualifying it to be flagged as OVERSOLD by the system, prompting a system buy as a result.

What is the track record for buying EXK into OVERSOLD levels, based upon similar flags over the past 12 months?

After 3 days: flawless.

None of you fuckers are doing it like me. Don’t even pretend to be on the same level playing field.

Off to beat a few illegal mexicans senseless for getting paint on my floors.

Today was a great day for longs, with exception to those who own CLF. It’s river-boat gambling night in the day time, here on Wall. Well, technically, I am not in New York anymore; but you catch my drift.

As of 3:45 pm, I am up slightly on the day, held back by my VXXing and cash positions. Nevertheless, stocks like EXK, LNN, KMB, RS and CPST are helping to alleviate any anxiety that I might have felt this morning. In addition, I started a new position in EL, a somewhat defensive play with a predictable clientele.

The discipline that you should never abandon, in light of the VHC blow-up, as well as the others that will come in the future, is position sizing. I’m afraid many of you are 100-200% long a single name, trying to hit grandslams with no one on base. I fear that when you lose your shirt, as the case with VHC today, you get desperate, like a degenerate OTB guy, and gamble more–hoping to “make it all back.”

If you limit a position to no more than 20% of your book, you will never feel like jumping off a window sill, onto oncoming traffic below. More importantly, when you find yourself in a rut, cold as ice, take a break or trade small. The singles and doubles will get your back into the swing of things, faster than any homerun. Let’s face it, most homeruns are the result of being lucky, at the right place and the right time.

I do not like to see my members get fleeced in stocks. Regrettably, I dragged many of you through the mud with my YELP; but that ended up a successful trade in the end–having sold the entirety of my position north of $25. Perhaps VHC will rise from the ashes and accomplish what many of you are hoping it will. But it’s just a stock, not a business, and there are no guarantees with regards to court rulings, and so forth.

In summary, if you are going to gamble, do so with the houses money.

I started a position in EL to hedge myself against Mrs. Fly’s unchecked spending sprees.

Before I get into the market, I want to recommend that you see a documentary called “Jiro Dreams of Sushi.” It’s not often that I watch documentaries or bother suggesting to my readers to watch one. But the message from this documentary is one worth remembering, which is: immerse yourself in your profession and become great at it. After years of practice, you will be respected in your profession, but only after you’ve paid your dues.

This is an incredibly important piece of wisdom for you punk kids out there, twenty-somethings who come here thinking you know the first thing about investing. You don’t know jack-shit because you are shit. Got that, pal?

I’ve been playing the market since the early 90’s and I still haven’t perfected my trait. I am constantly learning new tricks and my experiences teach me, often through the fire of losing, what to do under difference scenarios. You cannot learn that in a book or by some jackass at a prop trading desk. You have to earn your stripes through fire (losses). Dedicating yourself to this profession means living it day and night. It means you stay up real late to watch Asia trade and wake up real early to listen to Bloomberg radio for news and commentary.

You don’t take breaks and you never fall behind the curve.

The market is trading funny today, feigning weakness after an early morning spike. I do not think we will give back today’s gains. However, I do not think it’s safe to buy stocks here.  If you were lucky enough to catch this wave, book the gain and move to cash. I am sensing this rally could extend into the bell. However, the problems plaguing the markets haven’t been resolved yet. The good news is Jackson Hole.

Should the Fed implement QE3, I am all in long. This market will run for 6 months straight, so don’t worry about catching the wave late. On the other hand, if the Fed opts to do nothing, again, prepare for lower prices.

My #1 tell for this market is the price action in TLT.

Okay, I will admit this bear trap was superbly laid down, even I lost hope and took on a VXX position. I should have known that whenever VXX looks attractive to me, the hammer of certain death and pain/suffering was about to be laid down on the shorts.

This morning there are hardly any news updates on Twitter, regarding Spanish and Italian yields because they are sharply lower. For the most part, people crowd the twittersphere to disseminate bad news only. Well here is the good news, Spanish yields are at 6.97% and Italian at 6.06%. At the same time, TLT is moving lower, but not enough.  As a matter of fact, if TLT doesn’t drop soon, this rally will weaken.

Bottom line: I am not participating in this rally because I got scared. I got scared because I was more interested in protecting my gains, than making more. If I would have followed my old gameplan of buying every dip because the central banks will not let us fail, I would be long TEX and MTW in size today. Instead, I am juggling my testicles now, watching all of the ugly people drink my champagne and eat my caviar. The great part about the market, which is why I love it, is it gives participants ample opportunity to get on the right side of the trade.

I’ll be doing some scouting this morning and decide soon whether I want to get back into stocks, like a fucking man.

Movie Rec: Jiro Dreams of Sushi.

http://www.youtube.com/watch?v=hbV6knbeUFE

His passion for sushi can be translated into any career path, especially stocks.