Since its Fed Day, the market action should slow this afternoon to a point that allows you to get some meaningful analysis done.
While many are in no rush to buy anything as of yet in this bid-less market, you can at least put together a list of stocks that interest you that rainy day when the time is right.
Last week we were focused on software stocks as a group of interest. Using them as an example, I think one of the best signals you can use to define relative strength in this market is to focus on stocks that are not going to new lows with the market. Last week we used SPLK, GWRE, DATA, etc. When the market popped, these stocks moved the most.
Should this market reverse soon, new leadership will be born. This price action helps you determine which stocks are being accumulated into market weakness.
More after the Fed,
OA
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KORS has been showing surprising strength – still hopeful for my Oct 80s
XLU seems to be having a nice day. At what point does this become concerning, after a week or so of outperformance?
When the market rallies, if XLU goes to new highs while most other instruments do not, it confirms that you sell the rally in stocks for more downside.
It should be more appropriate to point out though which sectors/groups went to new highs with the market a couple months ago, and that the XLU did not.
Isn’t it significant that the russell broke out of a mutli-month range to the downside? It seems like a rhetorical question to me from a technical perspective, but around these parts it seems either unnoticed or insignificant. Just wondering what the thinking there is.
It’s very significant, but even more significant is whether or not it is actionable at this point.
The PPT is free for 5 days. This would be a great time to dig into the screener and see what one comes up with. http://ibankcoin.com/flyblog/2014/10/07/come-one-come-all-2/
Here’s a PPT screen I’m looking at. http://tinyurl.com/pwgtkww
I’m off to visit my folks & do some grocery shopping. Will check back later.
last intermediate bottom I had a lot of success with large cap biotech… AMGN, GILD, ABBV, ILMN. I also included HCA and CMG in that basket purchase. I see nothing wrong with doing the exact same thing this time around. Lower beta strength.
BTW. all are green today.
Very impressive.
Took some Apple puts here. Profile chart to me looks ripe for a quick drop for a trade.
This might be it. Double test.
Are you still in blox? Any exit point? I bought common at 15.15.
I have calls, yes.
Thanks OA
Wow that ARWR..
Today is the first down day I am noticing elevated volume in a lot of these names.
The Dow and RUT are worlds apart right now
They have all the safety names.
I think that’s good news. Divergences can be resolved in two ways of course and it certainly could be russel being the leading indicator, but the fact that no other market BUT the Russel is suggesting serious breakdown to me suggests greater potential for failed breakdown and reversal.
Other signals suggest this can only be a secondary correction with the primary bull market intact because there has been no public participation and euphoria yet.
Last I checked, a shit ton of people had their 401ks fully invested. Also, something like GPRO, a company that straps video cameras to your head, going to $12 billion isn’t euphoria?
Majority of 401ks are not used for trading, thus, people put their money in mutual funds which are always fully invested. Good try though, you buffoon.
No, that reply was stupid lol. So 401k’s don’t invest fully in the market? For most people under 50 they are almost all in.
“shit ton” isn’t an objective standard unit of measurement. Maybe you know people shoveling money into 401ks, I don’t think there are many. This has been the most hated bull run because people aren’t involved. Uncles and neighbors and barbers aren’t talking about how much they made in the market and CNBC ratings are still at historic lows. Unless you live in Sillicon Valley, there isn’t much happening in the way of public participation. The volume in this market has been non-existent everyone is ignoring the market or still all “financial market is rigged”, and the capital has been very tight so liquidity has been way down. There simply isn’t money floating around at will. You are talking about one stock. There were plenty of IPOS tpeople thought were agregious in say 1997-1998 but the mania still hadn’t happened then.
Also compare the volume on say the SPY now to 2006-2007 or 1999 to 2000 (or even 2011)… There is no comparison because there is still a ton of money on the sidelines and lending restrictions have still been tight as opposed to the reckless lending and leveraging of credit that is typically done near tops.
Some good work in book trader vic about Robert Rhea’s take on dow theory.
http://books.google.com/books?id=y9lHXmbEfWIC&pg=PA31&lpg=PA31&dq=trader+vic+robert+rhea+dow+theory&source=bl&ots=eDBxaphg3E&sig=sjZYnG4Z_wVKEik2FBM895e4GnY&hl=en&sa=X&ei=J141VKPbE8GayATYpYCYDg&ved=0CCsQ6AEwAg#v=onepage&q=trader%20vic%20robert%20rhea%20dow%20theory&f=false
holding up well last few weeks… AERI,AEO
“a list of stocks that interest you that rainy day when the time is right”
love it
There’s a tsunami outside right now. Waiting for more of a lite drizzle.
BWLD is also strong today after getting hammered last two days.
add to FSLR here for new $ or wait? thanks.
Wait.
bot waaaaay to much time on those true options..booo
Are you bitching? Stock is up 15%. WTF?
trading right is much better than your P&L..when you get that, you will have graduated
Jeff – Any thoughts on this lower high in TLT on the multi-year chart? Looks like the intra-day chart is trying to confirm it. If some of that money starts flowing back into equities along with some precious metals money that should make for one hell of a boost…
Watching closely. Yet another divergent signal in this clusterfuck.
I’m shopping for ramen and store brand mac ‘n’ cheese in a box.
That’s all I can afford!
You must be upper class if you are able to eat during these times. The rest of us are begging for food.
Times is hard… I think Jeff’s about to put bchu out on the street corner for some lunch money…
I’m only down 50% from the mid-September high water mark.
Risk management and position limits FTW!
The struggle is real…
Damn…. some TLT dumpage
buy NQ 3965
i love how you come out of nowhere and post these, no bullshit, just action
+1 guys a savage
once again, interesting to see what we were doing a year ago: http://ibankcoin.com/option_addict/2013/10/08/relative-strength-raid/
Out flat. Gonna wait
till after the Fed
That tail forming on $CRTO tho
Bought JDST shares this morning and added on this pullback under 22 – I think we can go another 10% post-FOMC (either way, of course…)
Second buy point could have been better….
It was down 10%….out with a small profit
Hoping the FOMC minutes ignite the rocket upwards. This market shitstorm I starting to mentally drain me.
some of my favorite trading patterns forming on the IWM and QQQ 30min charts. A break of a falling wedge/channel at the lows. Very high probability trade, I’m gonna kick myself if we don;t get a little pullback after the fed. So hard to block out all the noise.
Sit tight if your long this could be a good one.
Yep, long. Was hoping for a bigger bounce but lets see if this holds.
Jeff, given how AAPL short is probably one of the best trades going around right now…if a turnaround is expected soon in overall market, AAPL seems to be leading the pack today. If we get a rally at 2pm, clearly AAPL is looking as a leader today and will rip higher. Would you take off the trade here in expectation of a turnaround and the fact that options expire next week? Just wondering what your rationale is. Perhaps you are looking at AAPL as a hedge position in this moment of uncertainty. Thanks for the feedback.
I got some puts out to November today. The new announced event may drive it up here shortterm, but will sell off post event if history is a tell.
The distribution at highs/volatility is a concern. Looks like a top, smells like a top…but could be wrong.
I took most of the trade off earlier today…it seems off for now. It seems like clearly AAPL is one of the leaders here if this rally has legs.
Fuck it!
That’s the spirit!
Never say ‘fuck it’.
I wasn’t gonna say it but fuck it
Markets moving – who are they trying to trap?
OA, $GOOGL bouncing off support on multiple time frames here. Good spot for entry?
RUT pulled up closed the gap on the DOW
Anyone notice the 5100 contracts of DEC 65 FSLR bought today against 1900 open interest?
how do u guys spot these huge option buys ?
Etrade / TD tools can scan for unusual call volume.
Bott or wrott calls did you ask her?
Lol! what a move.
Feel free to sell off XLU…any time now…
Hammers…give me long handled hammers!
What a glorious move!
Oa, thoughts on $nmbl? Any reason for the drop today? This still a tehnically good chart to play?
Thx
Is you’re whole account in NMBL?
Man this market try’s your patience. @Chiefton you still in NQ? If so respect dude!
No I bailed before the Fed.
Announcements are just noise and it got me today. Have to trust your system and block out the noise. That’s what the hard work is for.
OA,
Are you adding more VSLR down here or waiting longer for it to settle out?
I really think you guys have to consider the valuation of VSLR. It’s trading at an astronomical FORWARD p/s. Why not go with SPWR or FSLR?
VSLR is more like SCTY than either SPWR or FSLR.
Hey Jeff: I notice the $XLU is up quite a bit along with the market. Would you consider that to be a negative divergence?
The image in this article (posted yesterday) was linked to in OA chat yesterday.
http://ibankcoin.com/hattery/files/2014/10/breadth-oversold.jpg
oops, that was the image this is the article.
http://ibankcoin.com/hattery/2014/10/07/mark-this-day-on-your-calander-overall-breadth-oversold/
That was fun!
Carl Icahn strikes back with AAPL tweet. No way to compete against that!!
With his basis…I’d send that tweet to bring buyers to the shares I am selling. $101 is the level. Until that, I feel this is seller controlled.
Do you think a guy like Icahn would be scalping for $1-2 bucks before dumping? Don’t get me wrong, I liked trade and the setup. IMHO, just think there is a new variable in the equation that makes TA less relevant, particularly because we are talking about a short dated trade expiring next Friday. Short selling would be another story. Thx Jeff
Down 200 up 200 down 200 up 200
RUT break support back over support…lol
As I said in comments in fly blog
”
http://2.bp.blogspot.com/-9oLU7cKXZ90/VDV18MT66jI/AAAAAAAAAYs/4JUj-BWoDAs/s1600/iwm.jpg
IWM needs close below 106.29 on weekly basis to confirm breakdown and even then it does not have support of other indices, so it is more likely to fail that if it did.”
What a great day to YOLO DUST OCT 10, bought this morning, in a meeting for 5 hours……poof
This bounce is nice but 9 out of 12 of my oct calls are still 0’s.
Took about 5 zeros for end of September too.
This 2% trading size still sucks if a broad market decline takes them all out.
My equity curve is looking like a megaphone the past year.
Get another position to pay down a loss. That’s how it works.
I was feeling this hit too, exactly what I was wondering about. this mental game stuff is great and I think only sinks in if you are in the middle of it. I’m getting this execution strategy more, worry about your “fundamental ball game”. It is a different game than I have been playing but the more I do it the more it feels like I am doing something real and less like “horse picking luck”.
This market is quickly becoming a joke. Maximum pain is the strongest indicator. Nuts.
Short strangle options play on EXEL. $1.50 strike. Like a broken ATM machine that keeps spitting out cash. Specialist has it pinned to the mat in epic fashion.
The single most important lesson that OA has reinforced during this period is to try to avoid becoming too emotional, take losses early, and look for the next opportunity.
I hope I remember that next time.
Lol i gotta do it…
Nnnnnnnuggit
Jeff, so far the $XLU is down .47. So, would that suggest this selloff is the leg down of panic or perhaps discouragement. Just trying to learn to apply you sentiment chart to today’s maket….thanks
Day to day marathon, not a one day race. We discussed this at length each day this week. Going to new highs in a market rally would be a concern.