Fri May 31, 2013 7:37am ESTComments Off on Key Levels for Month End
Very weak session overnight which didn’t start to stabilize until early this morning USA time. So far the low of the globex session was put in at the value area low from Wednesday, and this will be our key reference level today. How we treat a very possible retest of this price will be telling as we head into the weekend and June.
I have one level marked below this zone as an effective last line of defense for the bulls.
Above we have important reference points for upside power. The first thing the bulls need to accomplish is pushing us back out of this large value area. This will be no easy task but is certainly possible, especially if the gap trade gets momentum.
I’ll reserve any bias, and let the price action tell the story. As of right now, we’re weak, but stabilizing. If we head south of 1644 again a retest of the lows seems likely.
Yes, there was a selloff this afternoon. Indeed, the NIKKEI is doing scary things. Sure, there’s lots of uncertainty in the bond markets. And certainly, we’re knee deep in month end foolishness. But why not have fun with it?
I know everyone’s different in their approach and I respect that. The buy and hold investor who got involved any time in the last 5 years is probably crushing, if he picked good companies. The swinger who is patiently waiting for cleaner conditions is probably preserving a nice chunk of earned capital, waiting for her next opportunity.
I’m trying a little bit of everyone’s soup.
So far, my first two attempts at this option game have appeared well timed, SNDK and NFLX. I’ve taken scales in both. Aside from the paper gains I’m sitting on, which are very real money, I have a free ride on my lottery tickets, silly contracts set to expire tommorow. There’s something to be said about this approach. If either one of these continue higher tomorrow, we’re talking about 30-40 percent gains. I never considered such speculation until “The Fly” brought OptionAddict into the mix.
I traded the spooz so poorly this morning, I can’t wait to review the trades while slamming my thumb in a door jam. I need my pointer finger for clicking.
I HAVE MY CHINA FIX: Long shares of HMIN and DANG
Let me talk about DANG a bit. My good friend @stockcats suggested the name via fortune cookie. One thing stood out to me, the near geometric perfection of the triangle up here. The Chinese, they love structure, symmetry. Their leaders will point to this chart whilst we sleep and demand it resolve higher, as a show of power and formation.
I nibbled on the little bank that could, NBG. I can’t pass up a good joke, even if it’s on me.
See my Dee’s? DDD looks fantastic up here. So do AAPL SNDK CREE and NFLX. FB doesn’t look too shabby down there, either.
I’m feeling lucky, so I’m pressing my bets all over the place. I can assure you some of them are wrong. Until we decidedly trade lower, I’ll keep dwelling in the speculative components of the market. But hell I’m young, I can afford to lose it ALL. Fuck it.
Should I fall square on my face tomorrow, this post will serve as a jagged reminder of my insolence to the cautionary winds.
The market did the ole’ bad data, positive reaction thing, which according to my matrix is the most bullish market activity out there.
This led to a short squeeze across the board. Which is nice. Our first attempt out of the major balance area from ~ 1651 – 1641 is to the upside. So far the profile is establishing a P-shape which tells me aggressive buying activity, likely shorts covering, drove price higher and now we’re balancing out. The question on everyone’s mind now should be, will new buyers step in and initiate new longs? Or was the action only temporary before we resume a path lower?
I can’t call it. The market will. Watch $ES 1659.50 as your barometer to the former, and 1652.50 for the latter.
I took some profits in my SNDK weekly options because, well, they expire tomorrow! Awesome. It’s kind of fun to put a timer on your trades, when you’re right. That being said, I’m holding one runner into this attempted breakout.
I bought NBG. This is probably dumb, but MANNNNNNNNNNNNNNNNNNNNNNN, I gave serious consideration to buying that last dip. Danger: revenge trade.
What else, what else…ah yes, I sold a bit or RGLD exactly as planned. You must love seeing a good plan play out for old Raul.
I sold OMEX, it looks like it might roll.
I booked ¼ of my $DDD long. I’ll always take 5 percent home.
I lost money in the futures today, taking stupid trades.
We’re seeing some early morning strength but keep in mind we have a busy economic calendar this morning. The character of this market could change in an instant. Fortunately for us, we have the lovely market profiles to guide the way.
I’m more than a little thrilled to be back in my old school profiles. Merging Thursday and Friday sessions together is what gave yesterday clear vision. Look at the buyer reaction at the lows, it just so happened to perfectly coincide with the large distribution’s VAL.
Sometimes the profiles do all the morning work for me. I’ve highlighted a few levels I’ll be watching, and how we trade relative to them will guide my positioning.
Wed May 29, 2013 11:18pm ESTComments Off on It Is Hard To Ignore a Spicy Burrito if You Know What I Mean
If you have a speculative fervor and the funds to back it, you should take a close look at the Chinese burritos. The Chinese burritos are yet to bloom their majestic flower. When they do, it will become a showpiece in your garden, standing out from even the most brazen flora.
From the lot, reveled for their flawless financial statements, my favorite is hotel operator HMIN. I’m certain millions of displaced Chinese labor opts to live out of these budget abodes, uncertain of the duration of their stay in the factory towns they spend their lives in.
Look at the huge measured move setting up on the weekly chart:
I like to get out in front of these measured trades, just in case they don’t work. If we’re not imploding tomorrow, I’m a buyer.
Wed May 29, 2013 4:25pm ESTComments Off on How ‘Bout Them Royals?
We just wrapped up another neutral day in the spooz. It’s funny, these neutral days, sometimes referred to as normal days, are very rare. Yet here I am, for the third time this month bringing one to your attention.
The trade is so telegraphed, it’s treated me well. I didn’t take it today because I was pulled into a meeting, but damn listen up: when you get a wide range during the first hour of RTH, then there’s range extension in one direction (today lower) then dynamic price action takes us ALL THE WAY to the other side of the profile and we get range extension in the other direction, there’s a HIGH probability price will return to the mean before doing anything else. Awesome and amazing, yes yes yes?
Anyhow this type of session often precludes turning points in the market. Hopefully, the turn is to the higher because I tossed on a bunch of risk into the bell.
I sold my AWK investment today. It felt odd, I’ve held it for a very long time. I feel without it, if you know what I mean. But I’ve made so much in the name, it has come so far, and Yields Are Under Attack. I booked it. Remember, I swear no allegiance.
This put a ton of cash on the books and all the sudden I was almost 50 percent cash. Down here!? It was too much to bear <sic>.
I went shopping.
I bought DDD this morning, and then I bought more in the afternoon. I don’t like this stock very much yet. It has all the makings of a bull trap, if you ask me. Why am I long then? If it opens higher it will rip heads off.
I added to my RGLD long. Sometimes, when you feel like taking profits, that’s the best time to buy more.
I bought RVLT. It spiked hard. RaginCajun highlighted it very quickly, I just clicked the button. The stock is on my “always stalking” list. I trimmed a bit of bread off to place on my table into the closing bell.
I added to my SNDK weekly options, $57.50 strike. This stock, like DDD, is tricky in that it didn’t quite signal. I would have liked to see yesterday’s high taken out. Hand grenades and horseshoes I suppose.
I’ll either feel very smart, or very busy tomorrow morning—trading my way out of the paper bag I built. Something about making money in these markets makes me want more. Patience.
Wed May 29, 2013 11:15am ESTComments Off on Morning Trade Report
I cut DECK early, booking a small loss, it appears I sold near the LOD. Water under the bridge, the stock is chopping about.
I took 8 trades in the $ES_F, 6 winners and a solid green day. I’m calling it a day in the futures unless we see a major development. I like the idea of stringing two winning days together and I don’t want to blow it. Two trades were taken outside the plan, one was a scratch and one was buying the VAL I highlighted this morning which was my second best win of the day.
We’re in a major balance zone. I’m looking at big names like GS and F which had contra strength early on, and just took a big fade. I want to see how participants react/receive this fade.
Well, it’s really more of a chop low, set last week and rejected over the weekend only to find us properly testing it this morning. How the market navigates this big, balanced distribution will be very important.
Overnight the S&P made its way lower without much resistance from the buyers. We’re currently 15 handles off the high and seeing some very weak conditions. The action has taken us back down to our Wednesday/Thursday distribution and rotated most of the way through it.
Whether the market can pause in the range I’m about to highlight or price cuts right through will be my cue in positioning.
As I put the finishing touches on my previous post, I received a rather unexpected departure notice from my best minion, let’s call him Number 2.
I really hate seeing Number 2 go because the kid has panache. He won me over several months back when he proposed a simple overhaul to a major process. I liked his plan and brought it up the food chain. After explaining everything to management they were standoffish citing their failed attempts at a similar process improvement a few years back. Just that moment, Number 2 shut them down saying, “It will work. If it doesn’t work, you can fire me.”
They were silenced, we were given approval and he made it happen.
He also knew never to bother me from 8:30-11am. Any interruption during these hours would earn him a face full of boiling hot coffee and a demand for a refill. Number 2 always took it in stride.
He didn’t die or anything, he just quit. Best part, he doesn’t have another shitty corporate job lined up. He just knows he’s not being utilized to his fullest potential and that he’s not paid enough.
I applaud the ambition of this young man, who will never read this. 40 oz bottles of malt liquor will be poured out this evening to Gangsta’s Paradise. Farewell Number 2, I know you will.