I Can Be a Friend to You

I walk away this week smiling, knowing my favorite bears out there are getting Andy Dufresne’d out behind the Woodshed.

If you tolerated a little blogging from me in Le Fly’s absence, thank you. I’ve been a long time reader of this distinguished website, and happy to be a team member and no longer a competitor. As I said, if you can tolerate my writing style, you will notice that I can be a good ally in your pursuit of banking coin.

My ideas and analysis can and will be a great addition to your trading approach. I hope to continue to prove that as we get closer to implementing a new addition to the iBankCoin offerings.

This has been a “Top 10” week for me this year. We had a lot of home runs this week, and am excited about the ideas we’ve picked out going into next week.

I will post a Weekly Watchlist video Sunday night to reiterate market structure and set-ups. Enjoy the weekend.

OA

Funny, but flat days like today following a rally, I usually make 2-3 x’s the money I make on big rally days. These are by far my favorite days to trade. Momentum is easier to spot when all is quiet.

I booked the Lotto Friday trades and will look to take profits in GS, YELP and possibly WDAY before the close.

While my actions may seem overactive, I don’t mean to give that impression. I am never managing more than 20 option positions at any given time.

I’ve been asked about position sizing, especially with the shorter dated and low probability trades I take. These trades I allocate a smaller amount of capital towards, and will never have more than 4 on at any given time.

I focus on shorter dated options as a swing trader, trying to buy the perfect amount of time without going over. It’s all part of my own personal OCD as a trader, but it is efficient, and it maximizes gains. If you follow me and find that this is harder for you to pull off, you can maximize win percentage by simply buying more time. I’ve been about 65/35 win/loss ratio on my picks…but that would be significantly higher if on my losing trades I had purchased more time til expiration. That’s important to remember and consider on your side of the table.

The great news is that the launch of my new premium service at iBC will take you behind the curtain of a stock picker, and learn the methods by watching, interacting, and planning trades with me.

Sippeth from my cup til it runneth over…

OA

I went three-for-three on yesterdays lotto longs in AAPL (+112%), GS (+217%) and NFLX (ONLY 220%). I sold NFLX waaaay too early.

The recent longs I took this week are looking good, particularly WDAY, YELP, ZLC and FSLR.

One technical approach I delve into on my blog is volume profile, and how to use it to find *fast* longs. In other words, anticipating the explosive breakouts.

If you are a student of the charts, you realize that the common belief among technicians is that prices have memory. Prices consolidate at levels that they remember and travel quickly through levels they do not.

While we’ve executed this approach successfully in multiple longs over the last month, GRPN, IQNT, MCP, RBCN, SLV, FSLR… I am going to set up another trade now that I have a few more eyes reading.

Today’s Trade: RKUS

This stock did well off its IPO, but has been a turd all year. What I particularly like about this stock is that last year, when it took out its IPO high, it traveled from $14 to $20 in a week, leaving very little time spent and volume traded at those prices.

Fast forward to this year, this stock made the same move down, but gapped down through that same range after earnings in May.

Let’s take the same chart, and add up all the volume traded at their respective prices…

The profile is green off to the right of prices. It illustrates a steep slope and a “pocket” which acts as a vacuum, up to the next known reference point…which is $17 for this stock.

I bought August 15 calls today. You might prefer to just trade the stock. Or you might slap a buy stop on this stock at $14. Either way, watch and follow this stock in the next few weeks as it makes its next move.

OA

Headline power at iBankcoin. My mom would have been so proud.

Picking up where we left the conversation yesterday, we’ve got two types of set-ups to watch, and several stocks to keep an eye on.

Stocks that did not participate yesterday: LULU, GMCR, ROVI, RBCN, SOHU, BYD, RKUS.

My short squeeze list: Click Here

I took positions yesterday in LULU, GMCR and SOHU. I also own FSLR, GLUU and X from the squeeze list.

I will be scanning for momentum for the first few minutes after the bell. The market looks set to open flat, as expected. Stay tuned.

Also, for anyone following the Lotto Friday ideas….they are looking amazing (AAPL, GS, NFLX)

OA

3. Dance on the graves of short sellers, bearshitters, and socially unacceptable people alike.

Perma-bulls win again.

Today’s rally was strong, with remarkable breadth. Not the type that fizzles and fails. This was an extreme positive reading, and so long as value continues to migrate higher, buy dips.

Quick check of the sentiment chart vs. SPY..

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See any resemblance now, in hindsight?

2. Build up a watchlist of high short interest and lower quality stocks. We’ll start getting into this phase of the rally soon.

I’ve done some looking around, and I am planning a list of stocks to trade once the short squeeze play really starts to take hold again.

Again, these stocks have greater than 15% float short, and I have applied a visual filter for technical set-up, volume profile, and beta.

Click Here for the list.