Shorts Are Getting The Squeeze Already

Shorting the market this year has been a sport reserved for the elites because, to be frank, the tape is up.  That means although there’s a bear market out there, it’s lined with a more traps than an Indiana Jones expedition.

RaginCajun was courteous enough to highlight a PPT screen he is using to find intraday momentum pockets and I’m quick to get all manic about the potential on this one.

I’ve been watching all day as the list thinned out on the way down this morning, then, at the support I highlighted this morning where the market turned the corner, the list started building.

It was all over the nuclear move, and right now it has @tpain and me hunting shorts in GMCR.

Over the last hour I’ve watched one after another squeeze higher and you can see in the tape that it’s the tears of short sellers combusting and fueling the movement.  The transient nature of these moves is fantastic for the run-and-gun lifestyle I live.

Thus, I’ll be committing more resources to this list and playing these moves.

But first, I must find my way out of a few big losers on my books…..developing…

Weak market overnight, with the sell flow picking up around 5:30am.  I think it’s important not to locate the driver of this weakness as if it’s derived from some other market or currency, but instead to understand where the S&P 500 is trading contextually and where it could potentially go.

Although we’re pressing upon all time highs, it wouldn’t surprise me to see the market settle into a range over the coming week which means we need to be prepared for possibility.

The bulls will want to give up as little of the progress made on 07/11 (the Bernanke move) as possible to show their faith in The Fed.  Bears want the 1688 level to hold, where they flexed their liquidation muscles and pressed the market lower.

The overnight profiles suggest a lack of balance and potential for large directional movement today if we see a breakout above 1680 or a breakdown below 1675.

Breaking 1675 sets up a test of yesterday morning’s globex low down at 1671.75.  If that price fails to hold, the market will look to work down to 1666.

However, the market is showing significant signs of being oversold this morning, and given the weekly opex nature of Friday, we may see aggressive buying coming in early on.  Buyers need to get us on the other side of 1680 and hold it if they want to hold the upper hand.

I’ve highlighted these levels in the following profile charts:

If you’re trading the right setups there should be a margin of error, but squeezing those extra profits out of your winners is what shows up in your monthly and yearly statistics.

That’s why I’ve always loved how this Al Pacino scene from Any Given Sunday applies to trading. Big day tomorrow, for tonight, enjoy:

TPX missed on the top and bottom line, took a big hit repatriating some money, and in general blew it. As did I.  Shares are down over 10 percent after hours.  For all intents and purposes, this stock has given back all of its 2013 gains.

Clearly the synergies have not taken effect.

I’ll be a seller tomorrow morning. It’s going hurt, like pulling out a nasty splinter.

I’ve relaxed my style quite a bit on this recent leg of the rally, and the market has stepped and cordially accepted my donations to the market.

If you remember back when I started this TPX trade back up, everything went swimmingly.  I made the position huge, but I took my first scale.  It was nice.  And it was all downhill after that sale.  I never had another pop or bounce or pump for me to lighten up into.  Perhaps this should have been my signal.

There were all kinds of phone calls and channel checks.  When I asked if business was booming, I was informed that was an understatement.

LISTEN: IN THIS GAME YOU HAVE TO RELY ON YOURSELF AND YOUR OWN ANALYSIS.  More importantly, when you’re in a hole, don’t expect anyone to reach down and pull you out.  You’re on your own.  Go tell someone your problems and they’ll put their palms out, “fuck you, pay me.”

And that’s fine because I like it that way.  We’re learning over here on the Raul blog, me and you… that earnings are to be respected.

You take a bet and when you’re wrong you move on.  So yes, I’ll be cutting this lost tomorrow morning and moving on.

The money made in FB should finance most of this loss.  My wheels continue to spin in the mud.

Now I must patiently find my next spot, my next winners.  You’re only as good as your last trade so I’ll be taking my time, tending to my existing hot irons, and remerging to crush the tape.

I don’t want your sympathy for even a second.  I knew what I was doing.  Let’s instead uncover the next big winner.

I like AMBA, very slowly.

I think we’ll get ANGI at better prices after today’s blood bath, and I like it.

Zillow is such a beast and I sold it way to soon.  May its earnings spook the investor community so we can reenter.

I still think AIXG can do wonderful things, but this thing trades awfully.

I like being long the Yen here too, oddly enough.

I’ll be mining The PPT this weekend to hone in on the money flows too.

I’m off to eat a slice of humble pie, served via a 40 mile bike ride.

While most investors’ attention will be on the numbers about to come out from AMZN, I will be all eyes on the bedding industry, more specifically TPX.  They’re also set to report after the bell and it’s currently my largest position.

I’ve thrown caution to the wind, embraced my cannoli, and I’m jumping into these dark waters with no floaters.  May I be greeted by lovely naked mermaids!

Everyone’s expecting big numbers due to the unite the clans merger of Sealy and TempurPedic.

UPDATE: WHAT A WIFF

See you on the other side, time to get wet.

Seriously, stop buying AMBA.  Sometimes I want a 14 year old version of me to travel through time, find me, and kick me in the nuts repeatedly for being a douche.

How didn’t I know about AMBA until Il Dottore Ultimo brought it to our attention?  I feel dirty, shamed.

Something needed to be done instantly, so I bought some this morning, about 1/3 the size I really want.

Now I want it to go lower so don’t buy any!

Here’s what has my jimmies all rustled: they’re a key component in the GoPro camera.  Have you any idea the cultural significance of these little cameras!?  Damn, they’re the best, the bee’s knees, the cat’s god damned pajamas for chrissake.  I have two.

My buddy has five, he’s a freak.

Let me tell you, there’s footage out there….oh boy it’s good.

You can hide these things so easily and control them with your iPhone, I love it.

Or you can mount it to your head and go be a jackass, your call.

Either way, they’re vital and so is AMBA.

Henceforth, I’m in bed with AMBA.

As we approach month end and work through earnings we’re seeing our first bit of weakness since the v-shape recovery off recent lows.  The move has been more selective as ChessNwine has been reiterating, but for the indices it has been a unidirectional move.

The weakness spilled into the overnight session when European markets opened up.  We pressed through yesterday’s low and price was driven lower by sell flow bringing us to prices as low as 1671.75.  This price level has multiple confluence on the market profiles and should be monitored in relation to the other highlighted levels in the below chart to gauge the conviction of the sellers.

For the morning session, I’ll be closely watching yesterday’s low at 1677.25 and how the market treats it.  After breaching the level around 3am, we’ve clawed our way back up to it.  It will be interesting to see if sellers enter the market early and aggressive like we saw yesterday, or if something different occurs.

I’ve highlighted the aforementioned price levels and a few others in the following market profile charts:

The Facebook, led by a fearless byproduct of my generation’s upbringing (kickass video games and cable), has reemerged as an endearing member of the Wall Street community because, let’s be honest, they’re making money.  Lots of it.  And that’s all we really care about, right?

I needed some winship because for real, my portfolio is getting HAMMERED.

Listen, I’m not one to cower behind my losses, suggesting caveats existed and expanding my verbiage to sound smart.  I’m smart as shit, you know that.  The ‘junk in my trunk’ is being iron pressed into the proverbial hotplate long ENPH in size.  Support held on the first go of it, barely, and I’m still in possession of my shares, barely.  I can barely muster the strength to keep it, but I am merely a shepherd to the solar stocks and I must lead them to greener pastures.  Today I fended off the wolves, barely, and as I walk east to the Promised Land a warm sun kisses my weary shoulders…barely.

On to the important matter of Sealy Tempur-Pedic and their perverted bed salesmen, I like what I’m seeing.  I can’t sit here, behind my keyboard, and act like I’m some expert in the fundamentals of mergers.  Hell, I’m not an expert in any fundamentals for that matter.  I’ve been digging around all week, trying to understand this weakness.  Select Comfort (SCSS) missed last week Wednesday citing increased input costs.  On the surface, this seems like it could affect our TPX, but that’s not the case.  Select Comfort has been investing in their stores, technology, and product development all in an attempt to remain competitive.  That’s squeezing their operating income down.

So a sympathy move in TPX makes less sense than the fashion styling’s of Kris Kross.  On the other hand, housing stats have been strong for months everywhere but the Midwest and let’s face it; Midwestern folk are a bunch of frugal penny pinchers anyhow.  Hell they’d use a rock for a pillow if it saved them money to buy lotto tickets and fuel up their oversized SUVs.  So as much as I wanted to scale down this TPX long before Thursday’s earnings call, I may just have to throw caution to the wind, middle finger in the air, and take what’s coming to me.

Obviously I’ve been emboldened by Ford and Facebook.

The rapid depreciation of my equities in general has upped my cash to 22 percent.  There were no trades taken today, I just let the losses effervesce in my bowels.

As risk flies off the table today, my book is getting pulverized, down around 1.5% 2% as I type.  Leading the march lower after taking a minute to wake are gold and silver.  I told you this is a run-and-gun industry to mess with.  EXK has given back all its gains already.  Having scaled only 1/3 of my position off so far, I’m confronted with a curious proposition, do I cut the net and take my small door prize or do I stick to the plan?  Sticking to the plan results in a small loss, nearly a scratch, but sticking to the plan could make a solid gain, I’ll give it another day or two.

Solar stocks are getting pounded to pieces by incessant sell orders also.  This happened around mid-June and it was a fantastic buying opportunity.  This time it looks like we’re all doomed…so it’s an excellent buying opportunity.  The only difference between then and now is where the indices reside relative to the industry.  Back then we were on pins hoping the bottom wouldn’t fall out of the entire shithouse, today we’re day one of selling from all-time highs…hmm…

My largest position is due for earnings tomorrow after the bell and the chart is suggesting nothing positive.  TPX has essentially become a coin toss.  I’m at a real crossroads here, sitting a tad under -3% on the name.  I planned on lightening up before earnings but now it feels like a rip-off because I think they crush and guide.  A betting man at heart, young enough to absorb a gravity hammer to the dome, I may just go for it…this is a young man’s game after all.

My pseudo hedge FXY is down nearly a percentage alongside the market.  Cool of me to get fancy, no?

I’m not shorting the /es futures at all because I’m too distracted so no relief from that front.

On the plus side because there’s always a plus side, I took a ¾ size long into the F earnings, that’s helping a bit.  OCZ is bucking the trend, but I doubt it can breakout amidst the overall market weakness.  AIXG is undergoing a nice bounce back after Europe reported very strong factory data, and I have a modest sized FB long which I will carry into this afternoon’s Marc love fest.  #timestamp that, we’re all going to love Marc Zuckerberg after today’s announcement.  We’re going to gang poke him until he can’t see straight.

Congratulations to the entire Ford team! The strong quarterly financial results we are announcing today – with improved results in every region – are more evidence that our One Ford plan continues to deliver and build momentum.

 

Thanks to our efforts to serve our customers around the world and deliver profitable growth, we are announcing solid volume, revenue and market share increases in all regions. Importantly, we also are improving our expectations and guidance for full year profit, Automotive operating margin and operating cash flow.

 

Our second quarter earnings are driven by our highest second quarter and first half North American profits since at least 2000, our best-ever quarterly profits in Asia Pacific Africa, continued solid performance from Ford Credit and a return to profitability in South America.

 

Our results also reflect more proof that our transformation plan in Europe is on track to return to profitability by mid-decade, as Europe improved its losses compared with a year ago and the first quarter.

 

We will continue our laser focus on serving customers with vehicles delivering the best quality, fuel efficiency, safety, smart design and value through our One Ford plan, which remains unchanged:

1. Aggressively restructure to operate profitably at      the current demand and changing model mix
2. Accelerate the development of new products that      customers want and value
3. Finance the plan and improve the balance sheet
4. Work together effectively as one team, leveraging      Ford’s global assets

It is important for all of us to read the attached news releaseand understand the progress we are making against our plan and our outlook for the future.

 

We will meet with financial analysts and representatives of the news media throughout the day to discuss this information and answer questions.

 

We also will discuss our results, accomplishments, challenges and opportunities during today’s Global Town Hall at 11 a.m. EDT U.S. (12 p.m. São Paulo, 5 p.m. Cologne, 11 p.m. Shanghai).

 

One Team. One Plan. One Goal. One Ford.

 

Congratulations and thank you!

 

Alan