Choose Your Work Wisely

I lost my instrument controls around 1:30pm when my stealth assault system initiated self-destruct leaving me without a connection to the mother ship.  As a result, I was flying VFR throughout the afternoon with nothing more than an iPhone to monitor our environment.  This also meant I lost communication channels with the financial ninjas inside 12631.  Sometimes you have to just go with the flow and trust that your instincts can salvage any missteps while systems are down.

Given these conditions, I started the process of violently slashing twitter followers off my stream.  It is clear many of the people on the twitter are noise, a tad too esoteric, or downright villainous.  If you happen to find yourself on the receiving end of my draconian cuts and care to make a case for me to follow again please state your case.  Something tells me nobody cares.  And that is fine, because I only care for a few of you.

I am tired of talking my book.  It was green again today and I haven’t been tossed into a furnace in a while.  My positions had me up over 1.5 percent today but slowly faded as the day progressed. I ended up making 0.75 percent.  The force behind this move was likely indecision, and perhaps a touch of fear—fear can be an excellent motivator on the general population.

I find people are more irritable during this grey period between Thanksgiving and Santa.  I have to drive extra gregarious, else find myself victim to maniacal road rage encounters.  Perhaps it is because I live amongst the lower-middle class—a people who overspend and smoke and fatten their children with saturated potatoes then poison their minds with medicinal narcotics.  A hairy man went completely berserk the other day because I was following too closely. He swerved at my subcompact, repeatedly, until we met at the next light. I had to reach over and roll my window down. He was screaming at me, mostly in caveman talk, while his partner begged him not to get out of the car.

“Let me explain” I plead several times. He could not be reasoned with, instead he just shouted over my voice. I reached over and rolled the window up then offered him a solomon middle finger.

Life is much better when I do not think of others; therefore I will cease said thoughts immediately.

I have about 50 good years left in me and I want to work for most of them.  Therefore I must find a work I love.  Talking to nefarious internet folk and banking coin alongside them is a joy.  I will continue trading on the internets.  However the corporate model has worn me thin.  My mind grows tired of the monotony and boredom is the truest form of depression.  I will never succumb, no matter how many contrails are dumped on my person.  Instead it is time to take a leap of faith.

The joy of the New Year is almost upon us.  Who wants to make some life changing moves?

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When we examined the forest tree-by-tree yesterday, it was evident risk appetite was strong.  After two days of sustaining control in the marketplace, sellers were countered by aggressive buy flow Wednesday.  The action started with a strong opening drive.  All of my upside targets were met by 10:15 AM.  It was at this point I hypothesized a trend day was setting up.

The trend context made sense at the time, but it also made it difficult for me to palate the sharp selling reversal.  My thoughts became jumbled and I missed the opportunity to fade the second range extension on the day.  The aggressive selling push was futile because we had already made range extension higher after a strong opening drive.

The very fact that we set such a wide initial balance higher, driven by the buyers was strong indication of their returning confidence and control.  Taking the net sum of the market profile pieces, we can see the buyers gained almost complete control:

Our value area is overlapping/higher

Our close was higher

There is a large buying tail

The only piece missing is a migration of volume point of control higher.  This point of contention is critical today.  Will price revert back to value lower, or will value migrate higher with prices?

As of 8:15am, we are set to open outside of value on the upside.  Overnight, buyers gained control after a balanced session of trade and the result was a higher distribution.  This is a high risk environment where price can move beyond what we often consider normal.  Therefore it is vital we have price levels in mind to guide our context.

I have highlighted key support zones on the following market profile chart:

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The two way action on the day made for a wonderful day trading environment.  So did the big range.  My emotional capital however is completely wiped out.  I feel like I just went on a three day bender in Mexico and all I have is a bag full of pesos to show for it.

Physically, I checked out for the day when I got stopped out of Zillow during the fast afternoon move lower in the NASDAQ.  On twitter, I was talking this trade out, saying if sellers cannot get price below $70 they lose.  Yet I stopped myself out at $70.51 during the 3 minute candle that marks the low on the session.  It was a small and normal loss, but it was a mistake, my first mistake in weeks.  I took one more trade in the /NQ but was otherwise sidelined for the day with a dizzy head.

The problem is I now have 9% cash when I wanted to be all in early into any potential ramp…so I could sell into it.  Now I may have to keep that 9 percent sidelined unless something truly enticing shows up.

It has been a pleasure riding in the small sidecar I affixed to Fly’s time machine.  Through my tinted goggles I still managed to see and procure a large swath of FSLR and YGE shares, and a nice side of TWTR.  Who was buying TWTR when the market was making new session lows yesterday?   Yeeep…

And those TWTR shares pair nicely with my very large lot of YELP, a company who affords me the opportunity to pen comical restaurant satire whenever I feel the itch.  YELP is giving a voice to the people and it keeps the service industry honest.  Also, if your restaurant makes it on YELP, you are deep in the pockets of tourists.

RVLT went to the precipice of death, starred out over the crag, and decided to walk off the ledge.  Perhaps buyers can build off of this.  Perhaps they can’t.  Either way there are billions of lamps that need to be replaced with LEDs.  Someone will do it, hopefully with dependable CREE components.

TSLA did not keep going up today.  We like stocks that keep going up, like GOGO.  Maybe tomorrow it will go up, like Elon’s private rocket program.  The man is successfully running a private space program and people question whether he can build an electric car empire.  Pitiful, small minded, imbeciles…all of them.

AMBA reports tomorrow and every wannabe X-game star needs this camera.  I talked to some automotive crash test dummies over the holiday who were telling me they [reluctantly] switched most of their collision filming over to GoPros after the young whippersnappers insisted.  The applications are endless.  With drones on the rise, how can Ambarella lose?  I’m asking for a friend.

My top picks into the close of the week are purely chart based, and also my two largest holdings: YELP and BALT.

I could talk about other stocks, but I prefer to keep my mouth where my money is which keeps everything you read here honest.

I am off for some aquatic therapy.

http://youtu.be/Sp2eRmsCxkI

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The overnight markets were relatively solid for most of the session, but as USA comes online we are seeing selling pressure on the tape.  The sell flow started at 7:30am and swiftly brought prices to new overnight lows and back to the bottom end of yesterday’s value area on both the S&P 500 and NASDAQ indices.

As I write, the markets are becoming oversold on a very short term horizon although given the velocity of this selling we may see follow though lower.  The economic calendar is busy today including ADP employment data and International Trade numbers.

Putting all of that aside, we are coming into Wednesday and the sellers continue to retain control of the short-term auction.  They gained control on Monday, showed follow though and initiative action Tuesday, and overnight they are again in control.  This is all taking place in an aged long term auction controlled by buyers.

Focusing on the NASDAQ futures via /NQ, it will be interesting to see if the buyers can come in early on and work though this overnight gap.  Buyers will be targeting a gap fill to 3475.25 and perhaps yesterdays VPOC at 3480.  If buyers can turn momentum around, we have upside targets of 3484.25 (VAH) and 3489.25 (upper most distributions NVPOC).

If sellers continue to build on their momentum, they will look to trade through last Wednesday’s range and target the value area low at 3462.  Not too far below this price is a string of single prints which indicates a strong buyer was present at the levels.  Should that same buyer not present herself on a retest, it would suggest a shift in sentiment and downside action could accelerate.

I have highlighted these levels on the following market profile chart:

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I see you there, looking at my stocks, chomping at the bit because you never pulled the proverbial trigger.  I always know winship is around the corner when my morning analyses are devilishly accurate yet undeservedly ignored.

GOGO whoops

TSLA blastoff

I just so happen to be holding two of the most vile momentum beasts while they are violently ripping higher.  You want to see violent?  Cue up the above two charts, vi-o-lent.  That is the joy of momentum trading.  If you haven’t been on the ride yet, keep working on your plan of attack.  Fine tune it.  A good plan is amorphous like water.  You are the surfer right?  Do you want some manager surfing for you?

How is that fun?

Winning is fun do not let anyone tell you otherwise.

I am holding some dogs.  I would not hide that from you.  I have a sizeable RVLT position.  It could die tomorrow.  I hate this company something solemn.  Imagine the most wonderful beach in the world, inhabited by only the naked bodies of Greek mythology.  Now imagine every time you step a toe in the water to cool off you are attacked by a fleet of kamikaze black flies, hell bent on consuming your flesh.  The management team at RVLT is that pack of flies.  I proposed early on that a chimp could succeed if given the reigns at RVLT because they have the tools in place to mine the prospect of a lifetime.  But perhaps these jackasses truly can muff things.  One thing is for sure, their investor relations are nonexistent.  My friends, that is not good business.

Let us move away from that sore spot, put my explosive wins aside, and focus on what matters most—what is my next trick?

It is twofold really, a move for the brazen and certainly not the meek: SOLARS AND SOCIALS.

I finally added to my TWTR long today, after riding a 10% drawdown from IPO.  I like how it didn’t follow the indices lower today.  It pairs well with my large YELP holdings.

I started new longs in FSLR and YGE today too, in that order.  Although the sun does not show its face in the murder mitten, these charts say solar is ready to win.  It all starts on December 5^th with the SOL beat.  Place your bets.

Of course, the meek shall inherit the earth.  Thus to you I provide the following selection: KR and PPC #cantlose.  That KR is the look right there, with a daily chart consolidating so tightly, and a catalyst in place.  Big grocery just lobbied to victory in Washington over GMO labeling on food. You will need to look this up on your own as I am very busy. They will not be informing you of the toxins you consume any time soon.  This is a win for KR and their new product—THE MASSIVE CHICKEN.  Have you seen this thing yet?  It’s twice the size of your normal, mildly hormone injected chicken.  That means it can feed your ever expanding illegitimate family and their ever expanding waste lines. 

I think you already know your catalyst for PPC, hehehe.

Finally, all hail The PPT, bestowing an oversold statistic at these unruly highs.  This machine has become an invaluable arrow in my quiver.

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The index futures are lower overnight, with the marquee S&P 500 weaker than the NASDAQ composite.  Early on the momentum favors the short side, especially given the gap below in the NASDAQ.  My expectation is for an early probe lower by sellers into the gap.  I will look for buyers about half way into the gap from 3475 to 3473.75.  Should they not present themselves, I expect trade down to 3472.25 (11/25 high) then 3469.25 (11/25 VAH).

At some point the gap trade higher may come into play, perhaps fueled by shorts in the hole.  The overnight gap higher target is 3483.50.  If the algorithms decide to run stops on any newly minted shorts, my algo upside target is 3489.50.

Long term auction is still in the control of the buyers but is aged.  Yesterday was controlled by the sellers, and overnight the sellers retained control.

I have highlighted the day how I envisioned it above on the following market profile chart:

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On the day timeframe, we saw action that suggests the sellers gained control of the tape.  It started with the open where sellers printed a wick on the top end of our NASDAQ profile.  Looking at the bar chart the print has a smack of euphoria.  From there came several subtle warnings as the tape went mostly flat.  It began to feel like sellers would fail [again] to roll the tape over.  Every time inventory became too short in the futures, a rapid squeeze would develop.  However, they never made new swing highs.  Then after 3pm the sell flow came back in and closed us out near the lows.

It important to keep in mind we are still in an uptrend and tomorrow has a hearty POMO on tap.  However, should that liquidity be absorbed and price continue lower, we may have a swing high in place.

Early on I sold out of AAPL, Z, and BZH.  I did not like how the puzzle pieces representing housing looked during my weekend analysis so I cut.  AAPL had just made its biggest four day move in the last six months and I wanted more cash.  I scaled off a small piece of my GOGO, sub thirty, regretfully, as 30 was my target on the day.  I sold NUGT for obvious reasons (it was getting pulverized) and I sold an old holding in O, because it looked weak.

My only buy today was of WBMD.  I chased a bit, thus I left room to add if need be.

The net of my actions raised cash to 21% after being 100% long into the weekend.  Call it what you will, I want more cash on hand into what may be a challenging month.

CREE started printing an inverse head-and-shoulders reversal pattern while its small cap counterpart RVLT struggled.  OESX took a minor beating too but may begin consolidating which would entice me to finally get long the name.  LEDS looks to have printed a bearish engulfing candle on the daily chart.  Overall, the LED industry is still a mixed /weak basket of securities.

TSLA is getting a little dangerous looking and needs to find some buy flow soon.  It looks to my eye to be setting up for another leg lower.  Elon has a missile launch scheduled for tomorrow.  Perhaps his motor stock will launch also.  TM is promising to bring fuel cell tech to Japan by 2015 and Europe and USA by 2016.  That means Elon has 2 full years to continue disrupting old auto.  Tick tock Elon, keep making moves.

Shippers, you know them, you love them, and you hate them.  This trade has been setting up so slow.  It wants to lull you into a trance so you bail out of boredom then SPLASH, swing highs.  It is still tough to get excited when I view my big shipped position.

Social media continues looking weak and there were reports of heavy put volume in crowd favorite FB.  Overall sentiment continues to be bullish and that never bodes well for higher asset prices.  For now, YELP continues to find buyers at the 99ema.  If TRIP confirms lower tomorrow it sprung a nasty bull trap on speculators.

I would like to see some panic tomorrow, for olde time’s sake.  Wouldn’t it be nice to get our one or two mandatory days of terror out of the way early?  That way we can focus on gluttonous buying for the remainder of the year.

The chicken trade does not appear complete.  I may need to reenter for the great ARISE.

The sellers have won the day.  Two weeks back they won Monday-Wednesday only to get BTC’ed Thursday and Friday.  Take todays win by the sellers in context.

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The NASDAQ continued displaying relative strength verses the S&P 500 overnight, albeit mildly.  The composite index was able to make new swing highs during the overnight session where sellers were quick to greet the move.

As we work into the early hours of USA time, prices have balanced out and are slightly higher than last week’s close.

During today’s session, I am interested to see whether or not the lagging S&P breaks recent lows or instead continues consolidating/grinding higher.  Put quite simply, I will be monitoring the 1800 price level.  Should we sustain trade below 1800 for a prolonged period of time, I may reduce select long exposure.

I do not want to see the NASDAQ (as represented by the /NQ contract) below 3488 for a prolonged period either.

I have highlighted the levels I will be observing on the S&P today on the following market profile chart:

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Today is the kind of day where I simply do not have much nice to say, so I opt to communicate very little.  The cordiality and couth I stockpiled for months was most entirely used up on distant relatives and my derelict friend set.  I applied many of The Fly’s etiquette tips to my festivities and things went swimmingly.

I spoke with an old and salty GM engineer for quite some time about the prospects of a certain Elon Musk and his stunning Model S.  He dismissed the brand repeatedly stating they will never go beyond niche manufacturer and that their cars are only a toy for the jet class.

He had his points.  He loves the Volt but could not justify the lofty insurance premium it carried.  The same goes for the Model S, except the niche factor ratches premiums up further.  One can service their combustion powered vehicle at 20 places inside a five mile radius.  The Tesla lacks 100 years of servicing infrastructure (mechanics).  He pointed to the $60,000 Corvette Stingray and boldly claimed it had more technology in place than the Model S.  Finally, he is convinced Toyota and their fuel cell technology will be rolled out, en masse, thus completely cementing the geniuses who mass produce automobies leaving TSLA to only service the upper scraps, the golden giblets if you will, forever.

This dilemma rings right through to LED, where an old industry is being disrupted by new technology and young leaders firing sniper bullets at strategic targets from their bird nests.  How I see it, eating an elephant is a large task, but if you focus on taking one bite at a time you get it done.  A strange man named Michel Lotito once ate an entire airplane.  I suppose I side with the strange and against all odds crowd.  I am sure Steve Job’s silly iPod was destined to fail too.  1000 songs in your pocket does not stand a chance against the brilliant minds at Sony, right?

Will the masters of industry in lighting and auto making be disrupted by TSLA and CREE?  Or will TM mass produce a car you fill up with gasoline which it uses to power a fuel cell that powers your transportation and your home filled with PHG bulbs?

I supposed that’s the thought I will be pondering over the weekend.  I would love to hear your thoughts.

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There was a strong appetite for risk over the holiday trade, which saw prices of the NASDAQ outpacing the performance of the S&P.  The action slowed a bit over these last 8-10 hours and the resulting profile print has a very familiar, uncompleted, shelf footprint.

By vision for today is a completing of the profile via some back-and-fill trade.  However, we are set to gap much higher, which signals the market is well out of balance.  If we fail to hold around the high volume node at 3476 it may signal a rejection of the holiday move by the market.  If this is the case, we may see a swift gap fill back down to 3469.

Conversely, the shelf at 3476 may not breach in which case price will continue to probe higher in search for sellers.

The shelf is an interesting bit of context to bring into today’s trade.  Even the casual observer, hunting black Friday deals can use the price action around the 3481 shelf zone to measure sentiment.

I have highlighted this activity on the following market profile charts:

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