I have spent the last two days digging up the year end buy list. And trying to make sense of the selective action in stocks.
I have a what I feel to be a good group of stocks to focus on, for a year end melt-up.
While you might argue that the market is extended, overbought, etc…you must keep in mind that only Dow components and quality stocks have followed that same path. If you revisit the market last year and focus in on the price action from mid-October til year end, you’ll notice an interesting correlation to thie current market environment.
If you take most growth stocks, they didn’t readily participate in the rally til late November. In fact, most went to new lows before finally reversing higher. While most of your sentimental bloggers shorted these stocks into the hole, again, they ripped heads off from those lows, exploding to new highs into year end.
Take YELP as an example. It reflects what most Social Media, China, Solar, and other growth names did at this same time last year.
You may observe this current environment thinking you missed a pat pitch. But what if the fattest pitch is yet to come?
After Hours with Option Addict members, I will be out later this afternoon, but a video watchlist will be uploaded in my absence. The set-ups are great, and should be a decent list to watch for year end.
OA
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You owe your readers a home run seeing as you have been wrong for 3+ months
JDST is the real cherry on top
At best you’ve become an awesome contrarian indicator
I bought JDST at $12 and $15 and gave readers a target of $40. How was that wrong? I put them on the fastest move that instrument has ever made.
I banked $48K on 2K Shr trade. Would have been $54K had I pulled the trigger the day it blew past $40. Eat that Cookie Crumb
I guess 1000% in BABA didn’t count, either.
What part of free blog don’t you get? He owes you nothing. Take responsibility for your decisions to follow or not. I’m up over 50% on his feye call a couple days ago. All the rats coming out of the woodwork to throw their 2 cents in on picks discussed here and Fly’s blog are the best indicator I need that a big rally is coming.
Cookie, eat your heart out: http://thumbs.dreamstime.com/x/giant-cookie-17549706.jpg
I like that Dan, but I was thinking more http://www.reactiongifs.com/r/npa5yMn.gif
Really? i hope your not saying you’ve been holding jdst for 3 months.. if so, shame on you
I EAT COOKIES BLAH BLAH BLAH!
Dear Cookie
I made $2500 on $JDST thanks to Jeff while you were sucking on thin mints.
Thank you.
Go somewhere else Troll. Every single person that took that trade with OA made money on it, even if managed to sell it “late”. Who else out there called this move, and made $ on it?
The worst evil I can wish on you is hoping you are fully-leveraged and long gold right now.
Russell showing some nice strength here… Staying off the morning low while S&P and Dow test lower. Could make for a good afternoon.
Cookie Monster – you deserve OA dressing up a pimp green suit and doing this to you a couple times and all of the other haters.
https://www.youtube.com/watch?v=OFaaVrqxqTc
My only concern with the above is that what happened in the past with stocks like YELP happens again. What if it doesnt?
The same as if it does work. You manage. Isn’t that the basis of any idea? Or are you asking something else?
What if you short here and it doesn’t work? If any idea doesn’t work, you manage…right?
good points. i need to leave my bias behind which is that there is still more consolidation needed in the high flier group as a whole before its tradeable for more than just a day trade. i don’t think we’ve gone thru max frustration just yet.
it was such an easy trade for so long. i think the market is latching onto true value stocks now. obviously i’m biased given how i’m positioned.
Which of those stocks can you buy here though? They’re the ones that look like the SPY. If the market is going to say up and you are going to participate, you are forced to look further up the risk cycle here. Only way to look at it.
well, i’m long emerging stocks, european stocks and autos (FCAU, F, GM, NBG, DB, EDC) right now and I would say entries in all of these are fine if you’re looking at longer than just the next week. but i focus on fundamentals first, though, then look at technical entries after. so they could always go down first but i think all of these are undervalued.
I like some of the other european financials like AEG and ING too. not sure what you’re take is technically but they’re both cheap and have the QE tailwind.
sorry last part…most of these are tied to europe so if my thinking that europe is on the mend and will be supported by the ECB is wrong then i’ll be wrong. the auto stocks are all trading at low valuations in large part because the european market has sucked for so long.
The only winning move is not to play, Jeff. lol
That’s what both bulls and bears have learned about 2014.
matt – it depends what area of the sandbox you’re playing in. if its momo stocks then yeah i agree
I like consumer discretionary, small-capp(ed) stocks, social medias to a lesser extent and short gold for here until 2015. If the Fed raises rates then we’re all fucked.
Sure looks like a rotation into emerging markets. I like ACH, SNE, TCK on pullbacks
Jeff – If you look at the longer term picture on some of the momo stocks, it looks like its just a consolidation year for most of them. they all had massive years in 2013. some of them are up double digits this year and nicely from the May lows like PANW, WDAY, NOW, SPLK. market could just be saying they all need to grow into their multiples
Pay the ranges then, which is what was implied as opportunities present themselves.
Yeah man. everyone has their own strategies. in the end the market game all comes down to making money. how you do it doesn’t matter, so long as its legal.
Jeff, how do you feel about TWTR? I went long today, as it looks like it’s consolidating
Back up the truck on QQQ puts today; after this fade I have no faith in this market. I’m officially bearish.
Difficult to get bearish but I don;t believe we get a Turkey rally this year.
Yea Chiefton what I’ve noticed is it’s better to opens up down and rally then up and fade. Old story….lol
I just think the Q’s are wayyyy over extended and to not hedge my longs wouldn’t be realistic.
BABA being my largest then here
Took a monster loss is GPRO yesterday wiped away 40% of my premium. Still love GPRO though it’ll rally
If losing 40% of the premium is a monster loss for you, then your position sizes are WAY to big for these options. Trust me…been there, done that. Keep it smaller than you really want to bet.
Hi OA,
How do you feel about NFLX here?
Thanks!
Bought TLT Dec calls.
Whatever on the negative people, I’ve learned tons, most importantly around thinking about trading, and to keep thinking while bleeding, stay light on the feet. This is like a gladiator pit or war, easy to postmortem and arm chair, whole different thing to keep thinking and moving when you are in it.
meant to end with – So thanks!
OA,
Unlike some of the degenerates above, I have much respect for your skillful call in JDST to 40 and your subsequent exit for a nice profit. Congrats.
With that said; in a previous post you mentioned that your view in the short term may change if gold hits 1190. we barely made 1200 today…..are your views the same? or has this new level changed your thesis at all? Thanks for any thoughts.
I haven’t seen anything yet that kills this idea, other than some volume below. Still watching intently.
+10.64% YTD Net.
I want 15, and I will get it.
Err, Sarge…SPY YTD gain is about 13%, i.e., you would have made more just by purchasing the SPY index on 1/1 and skipping all the trading. Not to be a pain, but just something to think about.
I made a one time purchase of VTI this year with a .05% mgt fee and 1.83% yield, which is not yet factored into my net. No commissions, taxed only on DIV and INT.
So what is your pick for the year and how much does it cost to own?
I like your attitude. +1
I found myself gun shy this week. Took a couple trades, but didnt really want to commit too much. Every time that happens – BAM!! market rally!!!
My reference to monster loss was being up 200% and all that profit being eroded and then losing some of my premium.
Oh, ok. Yeah, that was a tough one and sometimes that does happen. I didn’t get out at an optimal spot either on GPRO, but 85 should have been the target for Nov calls. If you have Dec, there’s still lots of time.
I have December’s and need a miracle at this point…lol
Anyone see the volume profile on MGNX looks good to 32 ish to me
Bonjour OA. Checking in and saying hi while in the southern region of France. En route to Barcelona tomorrow. Banked on UA calls before I left for a nice gain (delayed hat tip). Still holding CYBR, among other new issue stocks. No option position while I’ve been out. I will be ready for the year end rally.
Thoughts on RWLK?
None yet.
Aggiealum has a live one in RWLK
-tyvm
Hi Jeff, what do you think about Indian stocks? With the new government presenting budget in February and so much expectations, market expects the index itself to go up 30% in next 2-3 months, do you think that is the possibility or this is a good time to go short as so much expectation is already built in the current level? Thanks for JDST and BABA.
Which short? I like most india stocks (MMYT, SSLT, TTM) for longs.
NFLX here OA?
BABA getting ready to rip; if you’re not in calls don’t miss this train
Jeff, with gold right at 1200,isn’t this a good spot to get short?
OA, TWTR spending too much time here to be aversion?
Look at the rising wedge building in the GLD. Definitely looks like a great short setup. Tight risk managment to use the highs of Friday and looser to use the lower highs since July 10. Technical signs like this don’t ALWAYS pan out but this one is almost shouting the way.
How about RIG ? I can’t believe how low it has sunk
Looking to buy?
I already have a shitload it’s killing me