How apropos my dear readers that the day of my interim trial blogger status we roll into the March contract. The contract will exist as long as my trial-by-fire period. Let us hope both appreciate in value, although the contract’s road is much more rocky and unsure.
Going forward all price levels quoted will be from the March contract. First and foremost the infamous 1420 level—its 1414 now. That’s an important level to keep in mind today as trade sustained below that level could result in a short trip to 1407.75 the untested (or naked) volume price of control from last Friday. I’ve placed the two contracts side-by-side below to give your eye an understanding of the levels. March-13 is on your left:
This morning I highlighted my bias line and suggested you cut your weakling positions early. Yesterday demonstrated indecision and the gap below offered a tantalizing target for shorts. Heading into lunch the market began selling off and the market cut through the bias line. It’s understandable if you didn’t cut weak names at that point, but when the market failed to reclaim the price it was my sign to clear out weak names:
The action in the S&P was still constructive for the bulls and we found support in the afternoon and reclaimed the important 1420 level. It wouldn’t surprise me to see bulls testing the sellers’ conviction into the weekend by pressing longs into the weekend.
These elections are too close to watch—I have much respect for all the candidates and their hard work up unto this point, but MAN do I want to win. VOTE FOR RAUL3! 150th blog post HEY-O!
Thu Dec 13, 2012 8:13am ESTComments Off on Dump The Weak
S&P futures have the markets currently priced to open near yesterday’s close after a fairly large overnight range. Price failed overnight at the volume price of control (1430.00) and rotated lower to test Tuesday’s gap below. Since then buyers have stepped back in and stabilized things.
There are a few interesting characteristics in yesterday’s profile. The value area consumes all of the prior day’s range and is indicative of a wild auction with slight indecision. That’s of little surprise as the market was digesting the Ben and the The Fed in real time. Also interesting in where we closed yesterday, right near the value area low, which is to give the sellers a slight edge going into today’s trade.
The 1426-1427 level will be important today as a confluence of yesterday’s close and Tuesday and Wednesday’s value area lows. If price is sustained below this region sellers may target a gap fill back down to 1420 region. Should the market not find reactive buying at that point our next level of support is 1418.
Things get fun above 1434 value area high where the fading of the Fed pop began.
Shortest term, bears have a slight edge, but the swing trend is higher giving me patience on my long positions especially stocks like TSLA which are grinding higher. However, some ugly candles were printed yesterday which should have you considering clearing some weak positions from your portfolio.
UPDATE NOTE: I sold TSLA after the stock hot knifed lower.
What has been clear since the election began in these most hallowed of hallowed halls is the lack of support I’ve received from members of The PPT. It has even been speculated that I represent the “anti-PPT candidate” to which I say without question I am not. When Fly, very appropriately manifesting into Plutonium Petey, dropped The PPT BOMBSHELL on the interwebs, I knew the game had changed.
iBankCoin was my first stop every time I fired up my PC then as it is now. But I knew the bar had been raised, and I would be left behind. I was broke. I couldn’t afford the small door charge to enter the club. Plus, I figured, fuck it I’ll hang out in the back ally and piece together what I could.
Back then for many devote readers The PPT represented a reprieve from the moronic plebs and a more refined domicile. I noticed some of my favorite commentary leaving the public forums. Traders like Moober, Trading Wife, Braveflaps, Anton, Bernie Cornfield, and so many more trickled away. There were even talks that Alphadog was blogging on the inside, he was always a favorite read. But I pressed forward on my coin banking mission, knowing I’d eventually pay my dues and take the ride. Soon Chess and Rage had 12631 and even more of my favorites vanished.
Here we are today, why do I stand alone and without The PPT?
About a year into the founding of The PPT, I started gaining interest in future contracts. Auction theory was being talked about for the first time by guys like @futurestrader71 and I was impressed. Something about volume at price is so intuitive. The more I’ve ventured down this rabbit hole, the more resources I’ve diverted its way. You’ll quickly find out good data isn’t free. A decent data feed will run you around eighty bucks a month. Then there’s charting platforms who charge and you have to find one that fits your plan. In short, I’ve committed my budgeted annual trading expense allotment (Raul3 the accountant coming out) to advancing my knowledge of futures. But I’ll never stop trading stocks.
I tell you all of this, members of The PPT, optimates, as an appeal to your better judgment and to offer you a promise. You traders are more than members of an exclusive club. You represent everything this site was founded on, the traditions we hold and an ace ability to bank coin. Should my blog wage from Sir Fly provide a boost in income capable of funding a PPT membership that will be the first place the money spent. FOR KING AND COUNTRY!
Wed Dec 12, 2012 10:52am ESTComments Off on Logical Scale
You can stay with your positions and stick some coin in your purse. I still like ATML and it’s having a good day. However, my plan dictates taking some profits when price reaches a level where it’s likely to pause at the least. Don’t over think stuff like this, keep moving:
Wed Dec 12, 2012 8:19am ESTComments Off on Have Fun With It
Futures are set to gap higher again this morning, and value has gone exploring higher. Last night I was tired and expressing my disdain for the barrel of monkeys my portfolio has become. Today I love said monkeys and wish to harbor them into the day.
One of the biggest mistakes swing traders make is over thinking a trend and bailing on it too soon only to look back mouth agape at the profits they left on the table. I didn’t do that with The March of The Chickens (PPC) and it made my year. Now I intend to do the same for any degenerate position who wants to continue to run.
The market is going to have to really force me out, either by definitively breaking the 9EMA or by closing below it. Otherwise, we’re going on a gorilla raid of the shorts.
TAKING TO THE PROFILE…I’m so glad people enjoy this. As you can see, the S&P 500 has gone exploring for sellers, and price will continue higher until a stronger force of selling is met, because most short term resistance has been cleared. We want to see buyers hold their ground at yesterday’s high first and foremost, but that could be wishful thinking an excessively bullish. Next level is 1432.25 value area high, if this areas breached we have to be on the lookout for a rotation down to the point of control (highest volume traded at price yesterday) at 1430.75 then things get slippery down to 1427. It would be clear the sellers have stepped in hard if they can sustain trade below 1427 and could be your cue to raise cash if you’re very long.
Otherwise, if we continue higher have some fun, pop into RaginCajun’s bomb and squeeze screens and find something that fits you for inflicting pain on short sellers. These are simple market times, simple but never easy. Stay nimble because we have The Fed speaking today too.
Into the close of last week, charts were setting up everywhere. Before I knew it my portfolio was inhabited my monkeys, hard set on escaping the barrel they resided in. Want to see the setup? It was everywhere last week and in some cases paid handsomely. EBAY took on the characteristics today, and I bought. Behold:
What I especially like about this setup is the interplay between the two CCIs. I keep a long CCI to give my eye a picture of where the intermediate term trend is and the short one to detect pullbacks in said intermediate trend. You could do the same with the momentum indicator of your choice. Simple Right? Remember, no two trades are ever the same and the key is always risk management.
Back to my current situation, a barrel of degenerate positions like ATML, ADTN, FB, and TSLA, I want rid myself of these names. Names traders are playing hot potato with ahead of the market’s cliff reaction. They’ve been trading up so I’ll keep playing along, taking scales at logical targets (places where people clearly draw lines like old swing highs and such) knowing I will dump them all on weakness. I want higher cash levels and, should it end the week STRONG, more shares of your favorite Senator’s investment house, Goldman Sachs (GS). Current cash level is 22%.
As of 8am, ES Futures are priced to gap above last week’s high at 1423. The question now is whether bulls will step in and make a big thrust higher, or if we’ll see another tepid afternoon of mixed trade. One item of note from the profile that I’ve continued to emphasize in this tight price range is the ability of the auction to take value higher every day since the slap the p fade that occurred on the first trading day of December.
Essentially, anyone who bought the hype going into December is now whole, and beyond that has watched value creep higher each successive day. Value looks ready to go exploring higher. There are too many buyers at these levels. At least that is my interpretation of the current value shift.
When I refer to value “shifting” I’m referring to volume at price. The price that trades at the highest volume is the most accepted price traded in any given day. The value area represents ~ 70% of the trading volume. Note its march higher:
Watch for bears to capture 1418 then yesterday’s low which closely corresponds last Friday’s volume point of control at 1414. Caution if either level is recaptured. Otherwise, blue skis for Santa’s sleigh.
Aside: I’m building my next multi-quarter thesis. I’ll give you a hint: it involves yesterday’s purchase of MLNX.
Mon Dec 10, 2012 9:20am ESTComments Off on My Portfolio Became a Pile of Degeneracy Last Week – You Love a Good Degenerate
Late last week, I started seeing several charts setting up in a manner I prefer, and with the docile behavior of the S&P I began buying up shares in names like ZIP,F, ATML, FB, and DDD. These stocks were added to my other wiry positions: VHC, PPC, and TSLA. Having a portfolio of these types of names can be more fun than a barrel of monkeys. But anyone who’s ever kept a pet monkey will attest to the fact that at some point the monkey will challenge you. You’ll come home, and that cuddly pet will have grown into a fucking gorilla, perched on your china cabinet with a fucked up look in its eyes.
Last week’s buys took my cash levels down to 25% and I intend to rebuild that cash level at the slightest sign of weakness. Top of my list to sell include: DDD, TSLA, FB, and ZIP. If their behavior demonstrates weakness they will be cut.
Should the ground the market stands on (profile) begin to look shaky, I want to be back to my core holdings (GS and AWK) with a much smaller portion of degeneracy. However, should said degenerate stocks continue to hold their respective nine day exponential moving averages I’ll ride.
Looking back at the profile from last Friday, we can see the early NFP numbers had us opening above all respective value areas for the week. Again the sellers stepped in and smacked the penis lower, recapturing much of Thursday’s value area before we found buyers and spent the rest of the day methodically auctioning higher; a slow grind if you will. The resulting auction succeeded in pushing value higher for a third day, but failed to place value above the important 1415.50 level (142.15 SPY).
We’re set to open right on this key level again this morning. Bulls want to see 1414 hold, otherwise 1412.75 value area low.
Upside targets include Friday’s high, 1420, then last Monday’s above 1422.