Starbucks is a quality name and it terms of coffee you could say it’s the “Apple of coffee names”.  In America, fat people love to turn their coffee into complete sugar bombs loaded with syrups and many other fattening things.  Personally, I don’t drink coffee at all as it gives me a headache, but I won’t look down on any fat people who read this that do.  In fact, keep drinking it as it seems you are helping the chart firm up a bit.  Last quarter, SBUX went on a steep run into earnings making it very dangerous to hold when it seemed it was priced in for perfection.  After the earnings announcement the stock sold off and we’ve been down ever since.

We all know how the strong dollar has greatly effected commodities as of late, but coffee prices have been coming down 2011.  Lots of analysts said it was too early for those prices to give SBUX a lift but it could become a Q2/Q3 story and here we are!  I’m looking to be a buyer of SBUX here with coffee prices continuing to go down and the technical side the chart is firming up here.  It looks very similar to AAPL in terms of how it trendless and drifting in an range.  The name also has huge growth potential as it expands all over the world in an endless quest to fatten up the rest of the world.  I’m a buyer baby!

So I walked into the car dealership to finalize the paperwork on a new car expecting a decent rate maybe 2-4%.  Nope! zero point fucking zero.  As a trader who is completely bearish on the global growth/stock market (and positioned bearish) I have to thank Big Ben today.  These fuckers will make no money on the life of this loan and it feels great.  My usual bearshitter self can’t stand Ben and the QE beggars on most days, but today the man gets a pass.

A lot of us are zeroing in on the strength the dip buyers are showing, but we must also note the strength in the US Dollar and long-term bonds.  When it seemed the dollar was going to be left for dead it put in an amazing rally on friday.  The DXY closed at $83.56 which is well above the important $83 resistance level.  Ideally, most traders would feel a lot better about an equity run if we saw both of them tanking.  The TLT has not given up it’s gains holding onto that critical support at $124 and now in a tight pennant formation on the weekly timeframe.  The volume has decreased as well leaving me to believe there will be resolution shortly.  If it fails and breaks hard we should see  a continued run higher in the markets.  If the pattern triggers to the upside, the odds of another wave of selling become higher.

Today’s job report is a sobering reminder of the fact that we’re not growing fast enough.  None of this is new news, and hasn’t stopped the markets in years past from soaring higher.  Corporate profits were robust enough to keep us going higher, but how good are they now?  We clearly see the situation in Europe is falling apart even quicker, and China is now joining in this shit storm.  In spite of all that bad news the bulls have stepped up to the plate in the last few sessions buying up every dip.  Make no mistake, if you’re bearish you have to be scared by the exuding confidence the bulls are displaying by the continued buying.  There are many trying to give excuses for why this might be; maybe it’s QE3? LTRO again? who cares, fact is they are stepping up, but for how long?

It has become almost standard now to BFTD on any breakdown that you have to be cautious as the market is good at turning on a dime.  Even though the hopes of QE3 can bid this market higher, if your individual stock has being killed by multinational exposure it won’t matter.  Consult a NKE chart about how it feels about QE3, I don’t think it gives a shit.  The flipside though this market is very tricky to short as well so what can you do? I’m looking for pair trades.  Shorting very weak companies and buying long positions into names that will have good chance of decent earnings.  This way if the market breaks down, the short positions should give you plenty of gains.  The long position, if a company of any value (say, AAPL?) dip buyers will probably step up and pick the name at a discount.

Pair trades for this week:  SHORT BAC, LONG AAPL

All of this is still leaving me with a bad feeling..

If you follow me on twitter you know it’s no secret I’m keeping a close eye on BWLD.  They are opening up new locations in cities all over the United States.  It’s not only important to expand, but to keep customers coming back which they seem to be doing.  The fundamental chart I’ve posted below points to some nice growth in this name.  More importantly to me, the weekly chart here is building a beautiful consolidation after holding it’s earnings gap up.

It has been in this consolidation since 2/10/2012 giving us a lot of pent up energy if this were to break to the upside.  If you consider the recent wild correction we’ve rode down in the market this name has held up very well.  I’ve been in and out of BWLD a few times now looking for that breakout only to leave early to take some profits due to market conditions not feeling right.  I’m looking at next week being a real test of this rally  to see if we are indeed discounting all bad news and moving forward. If we can digest these recent gains I will be latching back onto this name for what could be a wild ride higher!

The life of a part-time trader can be really tough.  We’re busy at our full time jobs not able to really watch the markets like we would like to.  Some of us have goals of becoming full time traders while others see it as a means for of retirement.  We must be realistic with these goals  as part time market participants.  Most of us will probably never become full time traders.  From the outside looking in it’s a lifestyle most of us envy.  The potential to make big money, set your own hours (for the most part), be your own boss; these are all great positives.

Don’t forget none of this comes easy, and if you ask any professional it took years to get there.  There were many trials and tribulations along the way.  You have to ask yourself, “Do I have what it takes to survive setbacks and keep moving forward”?  Dealing with these pains as investors is never easy, but we can not forget what pays the bills for now.  When we learn to become realistic with our time frames and goals, trading the market will become a lot easier.

As if you didn’t have enough indicators for your charts, I have a new one for you technical analysts.  If you remember back on March 21st, Goldman Sachs announced that it was the best time to get long stocks, a ”generational buy” to quote them directly.  Like any good indicator we need to give it a name.  I thought long and hard about what we could call this, and I’ve decided it’s actually pretty easy after all:  ”The Muppet Indicator”

Tonight you ask yourself,  ”Greg how do we use this new indicator?”  aha! it’s very easy.  Whenever Goldman Sachs puts out a report telling you to buy, you SELL.  If the report tells you the opposite, to sell, you BUY!  So far this indicator has proven pretty reliable so it’s up to you to use it.

 
Update Goldman released just today:

P.S.,
I don’t buy for a minute that Goldman  is actually following through on these calls.

Every week it seems like we’re in “No mans land”  in terms of stable market trend.  Playing extremes: buying in to support, selling in to resistance has turned out to be very profitable.  We are entering the first week in July, and it seems premature say volatility is behind us  considering what has unfolded during the last few summers. Using technical analysis, you can clearly see the 50 day moving average is still sloping downward.  People often misinterpret the moving averages as slope is the most important aspect of it.  A reliable up trend will have the 20 and 50 day moving average curling up. We haven’t seen that yet, which can lead to many false starts.

This is still very much a “Day traders market” as many leading names are still technically damaged. During a corrective phase, there are name that will be stripped of their leadership permanently.  That’s why buying into these names on a break down canbe very dangerous as you have no idea if they will ever resume prior role. During a corrective phase you should also be very wary of anyone perma-bearish embracing you as one of their own.  As a trader you need to embrace change in real time.  There’s no room for asking questions like” Why?” when you should be asking “What?”.
What the market doing is more important than coming up with excuses for why.  Newer traders think there needs to be a reason for every reaction in  the market and that’s just not true.  Learn to only trust price and volume because they are the only reliable friends you have in a market that’s looking to put you out of business daily.
A healthy pullback will allow us to separate the boys from the men.  We’ll be able to tell which stocks are going up because they should not because they’re caught up in the bullish euphoria  we’ve had these past two sessions.  I would like to see how we hold onto these gains first before I start positioning myself heavily on the long side.  We’re becoming very overbought by few different metrics telling me it’s not yet the time to open long yet.
McClellan Oscillator – We’re entering levels in the past that has resulted in at least a pullback.

We had an incredible finish late thursday and all of friday that gave the S&P 500 a shot in the arm for the month June.  The index was well on it’s way to having a flat month at best and possibly ending negative.  All of that changed instantly and anyone short got their ass handed to them.  What’s the game plan now that we’ve rallied? I don’t want to follow the herd on this way and chase this excitement.  I’m not an idiot either, I don’t care of this rally is real or not but what I am positioning for is a pullback down to reality.  Scouring the indicies, the IWM looks ripe to me as being way overbought.  I’m not looking for gloom and doom here, but a reversion to the mean which would be completely healthy considering speed and size of this move.

Nothing is written in stone, but when I do open short positions I sure as hell do don’t them at the lows.  I’m trying to place bets for pullback or failure when stocks/indicies move into strong pockets of resistance.  It also helps raise probability of me taking the trade if the move has come from two days of trading.  These trades may blow up in my face and they are big sizes as well.

$80 IWM puts (bought at the highs friday)
$79 IWM puts (bought midday)

I’m looking for IWM to come into one of these retracement levels with a conservative target of ~$78.50 I’ll be looking to lock in these trades.

As I board a train for NYC I ask myself the question, “What Now?” The EU news announcement overnight is a good first step but NOT ENOUGH.  Make no mistake, we’re going to see a hated squeeze rally higher that will run into July 4th. Did you position yourself short heavily yesterday on the breakdown? Go to a mirror and look at yourself.  Don’t put capital like that at risk again, Got it?? Did you go long yesterday? Congrats, deserve to be rewarded for taking the risk.

This rally should do good job of squeezing short sellers with no clue.  The guy who buys $TZA because it is the thing todo.  For the dedicated who are net short from levels much higher only a QE from both the US and Europe will make them break.  That is the ultimate point here all these steps are not enough.  The EU and US need to show the market there is no need to their support with bazooka type QE injection.  This will be another buy the rumor, sell the news event.  Don’t start chasing this long it’ll make you no smarter than the guy shorting yesterday.

I don’t think we’ve have seen the lows for the year yet and until I see QE my SPX target is still 1250.
Resistance: 1359
Support: 1306