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


What we are experiencing in the markets this year is extraordinary.  No amount of bad news can slow this market.  We’re about to make fresh highs.

Dump your weak and buy some STRENGTH.  Buy stocks that make people work harder (until at least noon) like DNKN.  You really don’t want to overthink a big move higher.  Simply find stocks you can define your risk in (using prior interesting levels or voodoo) and buy.  Then sit back and let the rising tide lift your boat.

There’s confidence in the banks.  That’s the cornerstone of capitalism.  It’s something we haven’t had for a few years.  Oh how well time can heal.

I highlighted the pump line this morning.  As I’ve done since the blogger network days, I put my money where my mouth (pen? keyboard?) is and took the bets.  Should we lose the pump line, many bets will come off and I will return to a more defensive position.

Actually even if we close strong I may dump some weak.  Why on earth are any of my stocks trading down?  Ridiculous!

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Major Action to Monitor Today

It’s all eyes on our banking overlords this morning as JP Morgan and Goldman Sachs report all the esoteric ways they fleeced us of coin last quarter.  They both crushed but the futures haven’t reacted.  I don’t know valuations or earnings metrics, but the technical picture on both names are running hot.  They’re running hot but they’re still pointing higher.  Go figure.  I suppose we will get the proverbial hand tip from both companies today.

An automated business is fantastic.  That is until something goes wrong and an inordinate amount of time must be spent “retooling” a situation.  Such was the case yesterday evening and as I result I’ve come into the morning having not done my evening research into trades for today.

When time is of the sweetest essence, I prepare most of my picks by poaching them from the generous folks here at iBankCoin.  You should too.

I like SD from RC’s 4 Wednesday Trade Ideas post.  It would pair well with my SU like a robust Bordeaux paired with ostrich.

I also like GPI from Redman59 over in the blogger network.

There was some talk yesterday in 12631 about ANR, I like it on strength.

UPDATE: DNKN looks good too

Digging further into apparel and retail given the strong consumer data yesterday (albeit normal given seasonality h/t Scott Bleier) I like that chart of PVH.  It’s near 52 week highs but is wanting higher.

Other thoughts:

I think people may still be afraid of FB today and perhaps the rest of the week.  Eventually, I’m going to add back to the name.  That is of course if an orderly pullback presents itself.

I’m hoping to not be sidelined on the banks too long but I have the feeling I won’t be jumping right back into GS until the earnings reaction plays out.

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Tight Bias Lines

It seems like the market was trying for lower yesterday but the pesky buyers were not having it.  The market gapped lower and a fresh batch of buyers stepped in and auctioned price higher all day.  Morning buyers had it easy.  They spent the morning targeting a gap fill and the afternoon featured a little dip after the FaceBook noise where eager side liners could grab the wave.  They were rewarded too as the index pushed to new highs before eventually settling near the value area high from Monday.

The profiles are overlapping, building potential energy.

That behavior into the close does signal resistance however.  Looking closely at the auction above 1466 yesterday we can glean insight.  Late day chasers, perhaps swing traders positioning for an overnight play were punished for their lack of discipline. Or it was a little short squeeze.  Either way, it created excess above and we closed within yesterday’s range.  That is why yesterday’s closing print at 1465.50 is our key resistance next time we go for a new pump.

The globex session has mostly glided lower, but Goldman just crushed estimates.  As of 8am 1460 has been support.  This level also is in confluence with the single TPO prints yesterday.  If this level can’t hold the market will begin exploring lower.

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The Sane Push Higher

After a gap lower today the market was mostly occupied with buying which kept the S&P on a tight grind higher throughout the entire session.  It’s had a slight algorithmic feel the entire session.  Despite the steady strength of the bulls, I spent most of my session lightening up current longs.  The only exception was my AM purchase of $MLNX, a longtime favorite stock of mine, that continues its dog like ways.

Tomorrow we get to hear earnings from JP Morgan and Goldman, two of the high velocity rockets that have been vital in lifting these markets higher.  They are both trading well into earnings with their stocks still showing positive momentum and even offering what could be considered an entry point today.  They’re almost trading too good to remain constructive on the names into earnings.

Now I could be wrong, and as Fly pointed out this morning traders don’t belong in the earnings forecasting game, but both Goldman and JP Morgue could announce stellar earnings and profits and still sell off.  Should this occur it would be a soggy blanket on the entire rally.  The way the benchmark S&P has been trading in conjunction with a weak Apple and flat banks is impressive.  But I’m embracing the uncertainty of tomorrow’s news.

My cash levels are near 50% after selling out of GS.  Obviously now I welcome any pullback.  I feel a little underinvested, so I will be digging into the charts this evening to flush out some potential longs I can grab should we continue pumping.

I still like meats.  I still like Textile and Apparel.  I had no idea my “Amalgamation” pick (SU) would trade so slowly but I still like it.  Everything else is subject to whimsical liquidation.

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Tracing The Strong Hand

One of the first things I looked at this morning was a zoomed back chart of all the 2013 daily auctions.  I then traced the progression of the high volume nodes to shine light onto the intermediate term auction.

The trip thus far has been a very orderly auction, with the first pullback tagging the high volume node (not leaving it naked) and the pump following the pullback achieving new highs.  When trading momentum this is exactly the type of behavior you want to see.

The last three days have seen the progression of value slowing and beginning to tightly overlap, with our prior two sessions actually sharing a point of control at 1464.25.  The behavior around these levels the next time they trade will be a key piece to the overall picture.

As of this writing the globex session is making fresh lows and we could be starting our second pullback.  However I’m hesitant to call direction with the several macro events occurring today.  Instead my plan is to give more weight to the afternoon session and simply manage my existing positions.

Should we trade lower we will look for signs of buyers at the 01/09 VPOC at 1455.75 then the same day’s value area low at 1454.  If those levels can’t hold the sellers will target the 01/08 value area.

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The Chicken Cometh

As you sit in your chair with your eyes fluttering, day dreaming of your bed as you digest your carb-heavy lunch, preparations are being made to resurrect the chicken.  Two tribesmen are burning thickets of sage to ward off the evil spirits as we call to the land of the dead.  We call for the chicken, we call for the chicken to ARISE!

Seriously, the smoke from these sage leaves is burning my nostrils and staining the crowned molding.  These guys mean business I’m sure of it.

I put the #meattrade on your radar this weekend over at chartpin.com were you paying attention?  Is anybody paying attention?  Or should I start talking about football and man-whoring?  Please do realize my derriere is on the line and my site statistics are teeny-weeny.  Fly’s going to toss me off a cliff like a deformed Spartan baby unless you start telling your financially driven friends how much coin we’re making over here.

Don’t worry, our edge won’t vanish.  It’s based on the laws of nature.

PS If you were REALLY paying attention back in the blogger network days, we grabbed 60% upside in $PPC last quarter.  Indeud.

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Rotation Underway: Socials to Apparel and Meat

Into the Facebook event I reduced exposure in a few of my social names and may continue selling exposure as the day continues.  However, the market continues to behave constructively and lots of breakouts are occurring across the board.

In order to keep my cash levels low, currently hovering around 20-25% I bought Quick Silver (ticker: ZQK) which I highlighted last night.  I also started buying back into the meat trade, buying up shares of my favorite PPC aka Macho Taco.

I still like ZNGA today.  I’ve tried selling it twice and it’s charmed me into sticking around both times.  This could change.

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Chubby Auction

Friday featured a blunt shaped profile as the S&P resisted the urge to sell off instead opting to properly auction the toothy area from Thursday’s afternoon thrust.  However it sustained the level on the lowest volume since starting the year. Sustaining those levels was telling of the demand for equity exposure.  However we want to be aware of price levels that could signal a change in risk appetite.

Given the progress we saw last week, the risk range below has increased significantly.  I’ve noted in blue our first key area of support.  Coming into the US morning we’re seeing the Globex session off nearly six handles after making new highs at 1471.25 overnight.  As of 8am, we’re set to open near this first level of support.  Thus how we open will be very informative of the early tenor of market participants.

Should we break the Friday VAL (noted below in blue) it will be a quick trip to the naked volume control point.  If buyers aren’t present here we could see a quick rotation through Thursday’s value area and a test of our major support for the week noted in green.  Seeing us back in the 1450’s should not be a cause for closing out all long exposure, but we should closely observe the markets behavior at these levels should they trade.

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Disney and News Flow Kick Up A Wave

The recent downdraft in Lululemon stock and the behavior that lured me back into shares of American Apparel had me turning a curious eye on the whole textile and apparel industry this evening.  A few swipes into The PPT on my Windows 8 touchscreen laptop and I’m laser focused on the industry’s stocks and The Fly’s robot brain is spewing diagnostics across my screen.  I’m multi-touching, feeling like Tom Cruise in Minority Report finding future pumps and looking awesome.  The future is good so far.  I’m glad to be living in it.

The chart is the final arbiter when determining whether to place a trade, but I love adding layers, measuring results, and building context.  I especially like to poke around and see what kind of news flow is occurring.  After observing the following chart, I turned an eye to the news flow.  First just look at the chart and observe the volume on this pump:

I figured something was afoot so I fired up the finviz news feed.  Look, they’re getting all giddy and noisy about a new CEO:

Early December, Bloomberg reported the prior-rumpled CEO was getting sued:

So here’s our context.  The company’s chief was sued, he was quickly and kindly shown the door and they brought in a hot boy replacement (so homo).  They brought in Andy Mooney.  He came to QuickSilver from Disney where he was chairman of consumer products.  And the market loves the news.

Take that context and layer it onto our context on the big indices, currencies, and industries and you’ll have a lovely feel for context.

This stock looks as overheated as the rest of the market.  The stock could certainly pullback before ripping higher.  Pull out to the weekly chart and you will see we’re nearing a critical price level.  Sellers are going to be at work up here, but we’ve rammed up here aggressively and on volume.  For a trade only and if it fits the whole markets behavior, I may grab a few shares on strength tomorrow.

On the swing timeframe the stock looks good down to $4.25.

Don’t be afraid to grip and rip, just make sure you define your risk.

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Things Have Gotten A Little Too Social Here

In all the excitement last week of stocks pumping hard from their pullbacks, I began buying and selling with great disregard for the underlying companies.  My hon3y hole was showing up everywhere and I was simply grabbing on to the letters presenting my setup.

Next thing I know it’s closing bell and my portfolio is riddled with social media stocks.  Holy moly, I own FB, ZNGA, OPEN, Z, and SINA.  Yeah that settled in this morning like a hangover.  But I must say, the charts say yes.  I’m just wondering if the Facebook event is a sell the news type situation.  They’ve certainly intrigued me.

As for the twitter and blogosphere, I’m thrilled to have all my new followers and I look forward to adding value to your trading day.  I’d like to extend a special thank you to RaginCajun for highlighting me on his new #FF blog series.

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