Tuesday, May 24, 2016
The first hit is always on the house.
Joined Aug 2, 2009
1,482 Blog Posts

BREAKING BALANCE

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Off last weeks oversold signal in both the $NYMO and my own personal indicator, we’re now breaking balance here to the upside. The TICK opened with an upside extreme, but I am also watching $VOLSPD and $ADVN-$DECN to confirm this initiative move.2016-05-24_8-23-00Last night in the boot camp, we broke the market down to a list of environmental indicators with historical data to back these signals. While many of you think I ride a bullshit bias for no apparent reason, there are a particular list of signals I use to confirm where the market is going. If you were on the fence on attending, sign up if only for last nights presentation on these indicators.

Like I told you guys, funny how the timing of this has come together. We’ll chat risk and rotations in tonight’s presentation.

Picked up some $CTRP and $EBIO off the open. More later…

OA

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BOOT CAMP STARTS TONIGHT

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Thank you to those that signed up for this weeks event. I’m looking forward to working with you guys.

If you haven’t signed up yet, you can at any point this week. Again, for those that can’t make the live sessions, I will be sending out all recordings for you to download as well as PDF’s of the slides.

The most exciting part of this is that the timing couldn’t be better to work the process in real time.

Here’s a link to sign up, last call.

OA

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SOMETHING TO THINK ABOUT THIS WEEKEND

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I just had this chart pass by me, and I think it is worth a strong glance over.

sfbsfgbThe last time the market was this compressed was in 94-95. Right at the time the Fed went on hits rate hike binge, rattling the bond market and opening the flood gates for money to come back into equities.

End of 2015 I wrote the following about the market coming into the year:

Around this time of year, I’ll usually highlight a chart that is one we’ll reference many times in the coming year. A chart that will define the year, basically. Last year it was $FDN, and how that would be the chart that “defined 2015.” This was simply because its largest weightings were FANGS (Facebook, Amazon, Netflix, Google, Salesforce.com). Cap weighted growth was my favorite theme for 2015, and this ETF covered all of them. Pretty good theme for the year, no?

For 2016, there’s a significant amount of compression built up. Here’s a look at the monthly chart I used for the NYC presentation, and another chart that zooms in, and also adds a Bollinger Width indicator, to show you just how narrow this range really is.

Here’s that chart again:

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Contracting volatility on any time frame is an important element of my analysis, and this is why I’ve been so steadfast on where the market is headed from here. This is the type of signal that forecasts the fastest market moves…and all things considered, in my opinion, is heading much higher.

This is the best time of the year to learn a little bit about stock picking. As a reminder, the Boot Camp starts on Monday. I’m super excited about this, as I think the timing of it all couldn’t be scripted better. If you have any questions about this, let me know, otherwise CLICK HERE to sign up.

OA

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WHAT’S CHANGED?

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Back on 4/29, I blogged about how amazing the Nasdaq looks, from a buyer’s perspective. I was enamored with this chart:

2016-04-29_10-30-36Quite timely analysis too, really. Both blogs on 4/29 were to point out how bullish the Nasdaq was. That was the first initial low in this multi-week sequence.

Fast forward nearly a month later, and the NQ is at the same price as the chart I posted back on 4/29.

2016-05-19_13-43-45I’m being asked about my level of conviction and honestly, I feel much more confident than I did on the 29th saying how I feel about the markets here. Now that I have 20 days of validation and confirmation that the chart I posted, which was just a few points off the low of the day on 4/29, on the FIRST attempt at those prices was actually going to be the line in the sand moving forward.

Now I have oversold signals to work with and another failed VIX breakout which are always handy in situations like this.

So to answer the question about where this analysis fails, falls apart, or needs a contingency plan, I’d say that those same prices I rushed to point out on 4/29…I’d say those have to give way first, at the very least.

OA

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$NYMO OVERSOLD

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Here in the opening hour of today’s decline, the $NYMO has reached -80, reading oversold.

The $NQ_F still hanging out at its 4290 lows over the last several weeks. P/C ratio hit another extreme today.

Just bought some $SQ…more later.

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GOLDMAN SERVICES $TSLA LONGS BEFORE IT SERVICES THEIR SECONDARY

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This morning…

Goldman Sachs sees 22 percent upside in Tesla Motors Inc (NASDAQ: TSLA) over the next six months.

Goldman Sachs upgraded shares to Buy, with a $250 price target, after the firm downgraded U.S. equities to Neutral on Tuesday afternoon. This is enough to send shares of Tesla more than 3 percent higher in early Wednesday trade.

Analyst Patrick Archambault writes that a 22 percent climb in share price is feasible following the recent selloff because “we do not believe Tesla shares are fully capturing the company’s disruptive potential.”

Related Link: How Has Elon Musk Been So Successful So Quickly?

The report does note that there are few short-term catalysts other than the ramp of the Model X. Archambault said, “expectations are low in our view with many on the Sell/Buy sides expecting a cut to Tesla’s 80-90k delivery target.”

Goldman Sachs expects Telsa to raise about $1 billion of capital. This potential raise was taken into account for the $250 price target.

After Hours…

Tesla Motors Inc. (TSLA) has filed to sell about $2 billion of common stock to grease its way to the Model 3, the $35,000 mass-market electric car it hopes to sell by late next year. The Silicon Valley electric-car maker said it will offer about $1.4 billion of shares, with the remaining shares to be sold by Chief Executive Elon Musk to cover tax obligations associated with his exercising of more than 5.5 million stock options, the company said in a press release. Net proceeds from the offering will “accelerate the ramp of Model 3,” the company said. Musk’s stock options, granted in 2009, are due to expire in December and, since Tesla shares have risen “considerably” in the intervening years, Musk will owe a “significant amount of taxes.” Musk will also be donating 1.2 million shares to charity. The company didn’t specify the charity recipients. Tesla shares fell 3.6% late Wednesday after ending the regular trading day up 3.2%. Morgan Stanley and Goldman Sachs are the offer’s joint bookrunners.

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