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I turn dials and fiddle with knobs to hone in on harmonic rotations

Speaking of Reality Checks


My apologies for being a bit light on the pen today and yesterday, I have simply not had the time to properly address you, kind people of the interwebs.

You may be familiar with the Sold Too Soon club and its proud members, but I’ve become a certified member of the Bought Too Soon club.

Dips, I’ve been buying them too soon.  The problem with buying too soon, good people, is YOU HAVE TO TAKE HEAT, lots and lots of heat.

Then, you pay quite a bit of money to see your trade through.  Such is the case with my new stud picks SKF, RBCN, and EXK.

These are all trades to me, nothing more. I literally have a few cents more patience in all three.  You know what that means right?  I risk getting a larger loss via an overnight gap.  It’s hard for me to overly concern myself with such things though.  It seems silly to live a life of worry at such a tender age.  I still like these trades.

LED is working this week and I want a fund of LED firms.  So far, I have it owning CREE, AIXG, and RVLT.  I want more of all of them and a side of LYTS and OESX.

Stocks were mixed today, but overall down.  The same goes with my swing portfolio.

But your boy RAUL did work today, regaining all of the Bossram losses from last week.  As you may have noticed, the /ES has been a snoozer.  Seeing in advance the need to recoup my losses and suspecting the /ES may offer insufficient opportunities to do so, I pegged out the i7s all weekend to build a high probability trading picture in the /6e aka the Euro dollar.  I used to trade this instrument three years ago and I remember why—it’s a wiry SOB.  Chalk it up as beginners luck if you’d like, but I pulled another 0.0040 out of the /6e today, putting me back on track to increase my position size by the end of October.

This very much pleases me.  I’m not taking excessive risk either.  The gains have come faster because the /6e is on the move and setting up more often.

In summary, the /ES rolled over a bit today after taking out a trend line I drew on my chart.  That’s some advanced analysis.  Value migrated higher, we printed a neutral day which tends to show up near inflection points and tomorrow is Friday the 13th.  Hide your wife.

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Strength Overnight

The strength we saw in the S&P going into the close carried on into the early overnight session, pressing up to new highs after the market closed.  This serves as an interesting piece of context because it is very uncommon for a swing high to be made outside of regular trading hours.

The overnight profile is balanced and features a poor low at 1685.25 seen as a triple TPO down at the lows.  This area coincides with yesterday’s VPOC which was able to migrate above the most of the key reference points we discussed yesterday morning.

I’ll be watching for a push to new swing highs today, and I’ll also be closely watching support from 1681.25 – 1682 should we see some selling come into the market.  These levels look like solid support currently, so seeing them break would be significant.

Overall, the market looks pretty strong this AM, let’s see if it can carry through into RTH.  I’ve noted some scenarios and key levels on the following profile charts:


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Trade Recap and Top Picks Into Tomorrow

I sold out of CLF and TRLA today, booking two solid wins.

I added to my RBCN long which has come under fire since I purchased the iPhone sapphire news spike yesterday.  Today felt like it was designed specifically to extinguish the weak hands that tagged onto the name during the AAPL WWDC.  By 10am I was already -5.5% on the trade.  Should the tide wash in, pressing the stock higher, the huge short interest in RBCN will enjoy the bloodiest squeeze yet.  This short bus is crowded and the stock is trending higher (Read: combustion).

I bought the indecision in EXK because I see it as a low risk entry into a very violent market.  Should we see strength in metals, EXK will beat shorts back into their holes.  If it trades lower, it’s an easy trade to cut.

I still like SKF as I mentioned earlier.  But it won’t take much more to shake me out.

I’m quite enjoying my $25 dollar cost basis in the finger banging bandit $FB. Well done Mark. The Facebook traded to all time highs today.

LED technology is alive and well, flexing its muscles a bit via LYTS which is up over 10 percent on strong forward looking statements.  Their canopy lighting is crushing.  You know, gas station lights.  Petro stations are a huge beneficiary from LEDs because they keep their lights on nearly 24/7 and the LED gives a cleaner and safer glow.

Trading futures went well today.  I’ve been giving more focus to the Euro dollar via the /6e because chessNwine and I have aligned vision on the trend.  That has given me confidence, and using Bossram Alpha I managed to extract 0.0022 from the /6E today.  I took another 1.50 out of the S&P manually.  Elroi took a 1.75 handle winner on the long side when I least expected it, and as I write is slightly underwater on a short.  It looks like a victory for the humans today.

Top picks into tomorrow?  Why they are my two largest positions, of course: SKF and RBCN


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Wanting a Dip

Sometimes we find ourselves wanting the market to behave in a certain manner.  When I went over all the charts this morning, my first thought was this rally is getting a bit long in tooth.  Then I observed a few more charts which firmed up my expectation that we may see a bit of a pullback materialize today.

But then I wanted the dip.

There is an old lesson in this thought process.  You can build expectations, but to want is to impose your will.  Imposing your will, or demanding, that the market conform to your expectations is like being mad at the ocean for washing your home away, irrational.

Anyhow, as much as it’s my expectation that today we see a pullback materialize, the market could just as easily continue climbing the wall of worry or trade sideways.  The overnight profile is top heavy but mostly balanced and we’re coming into significant resistance at 1682.50.  It didn’t surprise me to see the market stuck just below 1682.50 which represents the value area low of the distributions left behind in early August. This level is huge today, along with 1684.50 (VPOC).  If bulls can show price acceptance above these levels, we’re back into this upper value, and may rotate through it sooner rather than later.

Otherwise I’m looking for a pullback.

We had a poor low yesterday seen on the profile as a double TPO print.  If that gives way, I’ll be looking for gap fill trading to come in, pressing down back toward Monday’s high at 1671.75.  How much of this gap the sellers are able to fill (if any) will be an interesting piece of market sentiment as we close out the week.

Note: Today is contract rollover meaning many future traders switch to the December contract.  I will be watching the volume on both contracts and migrating over to the December contract when it trades move volume.  The above price levels are in reference to the September contract.


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Stealth Trading

Last week I was trying my best to call out my futures trades in the 12631 chat room because I often get the value added benefit of hearing other members’ take on the position.  However, it became increasingly stressful to provide timely updates on my positions and manage the trades.  I thought I traded last week in 100 percent accordance with my plan.  As a matter of fact, I did not.  Upon reviewing the tapes of my trading, I found a costly mistake was made during the fast markets on Friday.  It was my largest losing trade of the week.  It was managed properly, once entered, but it was not in proper cycle sequence.

I decided at that point to keep my futures trades to myself.  I do this for two reasons.  First to benefit me by giving myself a more clear mind when trading.  Second, I want to build my confidence in the trading cycle before I present it to the good people of iBankCoin.  My colleagues all provided the finest value added commentary, and I want to provide the same.

Today was a quiet session after gapping higher in the indices, but I was able to extract 3 handles of profit from the /ES using Bossram.  I extracted another 0.0012 in the /6e, so overall I had a pretty solid day in the futures.

Onto stocks, I built a pretty solid day in my swing portfolio.  CLF showed solid follow through today, but I took a scale, reducing my long to ½ size.

I finally closed out END, toward the end of the day, when the momentum ended.  This was a huge position of mine, one I wanted to parade down the warm streets of victory lane.  Instead I chewed off the bits of meat left on the bones and tossed the carcass into an alley.  I made five percent, at one point nearly nine percent, and expected to make twenty.  But with international sweetheart Vladimir Putin putting a damper on the war, my thesis is eroding.  I took money while it was still there for the taking.  I like MHR better anyhow.

I was watching the live bloggers at CNET cover the AAPL WWDC and when they mentioned Apple would be using sapphire in their latest iPhone’s fingerprint sensor. I queued up GTAT and RBCN.  I like both very much as part of my hedonistic desire to own all things LED, so the AAPL news was more an excuse then a pure catalyst to put sapphire back in my book.  I took down shares of RBCN mainly because I like the chart better.  GTAT is coming into longer term resistance here at seven as I mentioned yesterday.  RBCN has a nice pocket of volume above and a simple-to-define risk.

My final move on the day was pure stock market vagrancy: I bought a stupid amount of MJNA shares.  The ticker came to mind during a discussion with The Rhino.  He was discussing Funyuns which reminded me of Half Baked and before I knew it I went down to the corner and bought MJNA.  The chart looks interesting to say the least.  To say the most I see really heavy volume coming in.  Perhaps Doctor Phil is about to discuss the benefits of cannibals for bored housewives or something…

I’m down a smidge today, I kept my SKF on, and I’m still about 25 percent cashish.

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The Market Goes Stop Hunting Overnight

Markets are ripping higher overnight, pressing the /ES nearly to the top of the gap left behind on 08/15.  By the looks of the overnight tape many buy stop orders we triggered and a stop run ensued.  The question now is, will the buy flow continue to push the market higher, or will we see a big selling reaction to a perceived premium in the marketplace?

The S&P is currently trading ten handles above yesterday’s high, and nearly twelve handles above the closing print.  Therefore we are in pro gap territory where it is very difficult to play a gap fill trade.  However, we should keep the context of the gap fill trade in mind today if we see sellers start to recapture areas of support.

An interesting zone of price overnight is from 1674.50 – 1675.75 where price moved so fast, nearly no volume took place.  Price could revisit this area and give it a proper auction.  Should this occur, the subsequent move from the zone may give us some insight into who is more active today, the buyers or the sellers.

Given the distance the market covered overnight, my intial expectation as we approach the cash open is to see selling enter the market.  Initial downside targets are 1677.50 then 1675.75 and a possible gap fill to 1671.  On the upside, we have the lowest distribution from when we gapped lower with resistance at 1682.25 (VAL), 1684.25 (VPOC), then 1686.50 (VAH).

I’ve highlighted these levels and drawn out a few scenarios on the following market profile charts:


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Sipping From My Cup

I was not actively trading the /ES today, but my algo was able to take two trades.  One earned 1.75 handles and the other was breakeven.

My portfolio had a very strong day today, up nearly three percent and putting me back near my high watermark of the year.  I’ve been trading my butt off to finance these investments in RVLT and CREE.  As a result, when RVLT and CREE go up, I have big days.

Let’s discuss RVLT a bit.  If we consider the sentiment chart idea, we find ourselves within the panic bounce.  To me this means any rally we see over the next few days/weeks is likely to fail.  How do you like that?  I’m telling you right now that my largest position is involved in a failed rally.  And that’s okay because my timeframe on this position is multi-year.  Let’s hope I’m correct so we can have better opportunities to buy even more shares.  Another anecdotal piece of evidence calling this rally into question is one of its origins: a {cringe} Seeking Alpha report.  The bozos at SA (as the hipsters call them) were greased to help somebody get out of a seriously underwater position.  This is just a theory, but their track record is eroding though the diligent work of iBankCoin Chief Market Strategist “The Fly”.  It puts a foul stink on the whole move.  If it wasn’t a pleasant twenty percent pressure release valve I would be even more ornery.

However, CREE reported they have retrofitted the NASA headquarters and done so quite successfully.  Hmm, Cree really knows how to land the big fish, yes?  Wrong!  The biggest fish tend to be the wisest fish—having survived years of fishing and boat propellers.  If/when these gigantic fish encounter a situation where their lighting is called into question, the data will unequivocally point them in the direction of LEDs.  Any entity that weighs the financial impact of any business decision will see the cost benefit of retrofitting their existing light structure with LEDs.  And CREE, RVLT, OESX, AIXG, RBCN, and GTAT will benefit.  Look at GTAT…shorts better pray to their demon lords that sadistic seven holds as resistance.  Otherwise the light, the good, shall prevail.

Other big winners today were TRLA, CLF, and END.  Readers, I’ve been clear with my calls.  It’s up to you to wrap risk around them.  I scaled a small piece of TRLA off because I take profit when the markets giveth.

My SKF has gone red by about three percent.  Tomorrow it comes to an interesting fork in the road where I’ll either buy more, do nothing, or scratch the trade.  I was hesitant to add to the position today when the SPY absolutely refused to roll over.  Checking back in just now, it appears it did manage to roll, BARELY.  Until I see more confirmation, I’m not loving this trade.

END needs to rip, I mean, come’on now, we’ve been flirting with the idea of going all the way for weeks. Why not get past this game of just the tip as @chessNwine often references?  I think we do, hence why I haven’t scaled any off yet.

CLF is tricky.  It has been dead money for so long and now it shows signs of life.  Do we trust it?  Or do we take our six percent and dump this cheap trick?  TBD

In closing, I kicked my cash up to 25 percent and could like to see some market weakness to buy my favorite stocks sitting on my wish list—names like Z, SFM, GOGO, AMBA, ADHD, and VPCO.

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$CREE Retrofits NASA Headquarters

You will see more of these projects over the next twelve months as smart businesses evaluate their energy consumption and the investments that can reduce their expenses:


The National Aeronautics and Space Administration (NASA) headquarters, a  leased facility in Washington, D.C., has been outfitted with  energy-saving CR Series LED Troffers by Cree, Inc. (CREE). The  high-performance LED installation is part of a renovation to maximize  energy savings of the 600,000 square-foot building. More than 1,300 Cree  CR22™ architectural LED troffers have been installed, and Piedmont  Office Realty Trust, owners of the NASA headquarters building, expects  the new fixtures to deliver energy savings of 52 percent over the  previously installed T8 fluorescent fixtures. An additional 5,200 Cree®CR22 troffers are planned to complete the lighting upgrade.

“We originally considered replacing the existing T8 fluorescent tubes  with T5 fluorescents, but after testing Cree’s…(continue reading)

Shares of CREE are up over three percent on the news while smaller player RVLT is up over twenty percent.  FD: I am long both names.

Retrofits is the name of the game.  Can RVLT harvest all the low hanging fruit accross the United States?  Indeud, they can and will.

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