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

Grabbing For Straws

Not much data or news out today to hang my social cap on.  Today a massive amount of money went risk off and the flows took money out of this highly speculative space fast.  The only bit of news supporting the cause today is the numbers out of CRM which are pushing share up as much as 8% after hours.

I’m not going to lie.  I took a beating to the P today.  Unlike WNR, my P took a metal rake to the tip.  Quite the punishment it was, but the stinging will wane.  LNKD needs to come out the gate strong tomorrow or I’m selling, raising cash, and battening down the hatches into the weekend. The wind and seas of the markets are certainly not at my back are chopping through my port like a wrecking ball.  All of this, with cash levels upped to 45% after selling RAX this morning nicely dodging one of today’s many murderholes.

I so very much enjoy the mobile/social/tech space and the thesis remains.  The issue at hand is this noisy IPO.  What price is it coming out at?  Oh, that’s right $38.00 big news.  Let’s repeat it hourly.  Against my better judgment I bought more SVVC today.  It has a short leash.  Not necessarily a price sensitive leash, but any misbehaving and it’s getting swung into a wall.  My Pomeranian wrecking ball.

Zillow is a buy on any strength.

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Always Waiting, Always Wanting

The socials are whispering to you very quietly.  They’re saying, “We’re the way of the future.  We gives not one shittith what the haters say.”  Should the indices stop receiving a daily homo hammer the whispers will turn to SHOUTS.  SHOUTS I TELL YOU.  Ehm…as you were.  What bulls need so very badly is an afternoon delight.  Something to take home and boast about.  Something that makes them want to go buy some houses and cars and shit SIGHT UNSEEN.  This hasn’t happened for some time.  A real ripper.

In lieu of such grandiose afternoon index appreciation, we must continue to expect nothing from the social stocks.  NOTHING I TELL YOU.  For what they giveth will be just as quickly snatched away.  And you will be left holding the chocolate banana (@MOOBER kills me with this).  Yes, TRIP, LNKD, YELP, and P are defying gravity.  Mocking shorts, all kinds.  But they too will have their down days.  I implore you to take scales, lighten up on the rips.  There will be many dips for which to accumulate.  It is game on in the social space.

Meanwhile, over in SVVC GSVC land, things are several shades darker.  Fucking fundraisers and shit.  I don’t like these names but consider them a necessary evil BECAUSE I WANT TO OWN TWITTER.  Not even because I want to own Facebook anymore.  That shit can be purchased direct starting Friday. My risk management says hold SVVC unless it’s committed to pricing below $27.  I don’t want to stick around to see what such activity may bring.  GSVC I’m in bed with.

RAX I want to tighten the leash on after Chess queued it onto his stocks to short watch list.  The stock is totally offering a low risk short entry and I don’t feel like averaging down into a long liquidation.  I’ll sell it tomorrow if it’s looking too red, and will buy it cheaper.  No big deal.

ZNGA looks dicey.  That’s all I can really say right now.

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How They Close

What we have witnessed this week can be frustrating.  With the broad market behaving so erratically and without conviction, it has been a grind of tight risk management.  This tape and how you manage it speaks volumes to your progress as a trader.  Find your spots and get involved with names you see value in.  Building a good month in these conditions means scaling off longs into rips in my opinion.  I don’t short individual issues and am yet to have conviction behind an index/sector short.  However, Mr. Cain Thaler is your go to source on the energy complex, and he’s been making one hell of a comeback as of late.

I came into today not expecting to take much action.  Last night I highlighted my risk management and most of it focuses on the closing action.  The close has been consistently week and I want to see a shift in this tendency before putting on more aggressive snap-back longs.  All I’ve done today is scale off 1/3 of TRIP, which was my largest position going into the session.

It’s been impressive to see P make progress to the upside.  As of this writing the stock is still hanging tough.  I want more P, but I’m reluctant to average up until we see a pullback and its treatment.  Depending on how you entered into the basing pattern, long speculators on the base are up ~30% which is comforting, dare I say at risk for complacency?  Don’t be surprised if we see profit taking later on today/this week.

The individual socials as a group continue to eek out upside.  The derivative names (SVVC and GSVC) are weak today but not yet threatening to the bull case.

It’s how they close that I’m focused on.

More on this later.

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Talking Price on Socials

My skepticism is up, and futures are down as of this writing. Here are my notes thus far this week regarding some issues I’m tracking. My core thesis continues to be mobile web revolution social plays, but the damn indices won’t cooperate. It makes things I bit, shall I say, fun?

Anyhow I may have to cut a few names out. The following are my thoughts regarding my current social holdings and is based on my perception of speculator behavior in price aka voodoo:

TRIP: price action suggests time to slowly grind the souls of bears, like a Scottish serf landlord visiting daily the mock the exhausted farmer —  think it holds > $40 and still like it as low as mid $36’s —  I see $43.50 as a significant. The bears want to defend this price, if the don’t I expect new highs

LNKD: On the fritz. Today’s indecision is fair, given the implications for the bulls (FB IPO) and bears (valuation, hysteria, index weakness) — If the stock spends too much time below 105.50, espescially toward tomorrow’s close, I’m out. — Targeting a scale/profit taking between $119 – $122.50

Z: Morning strength quickly faded, looks poised for more pain — $40.15 is the neckline of a head and shoulder pattern dating back to the 05/03 earnings pop, would look for a mesured move lower in the name to complete itself at gap fill ~ $36.50 — Failed move lower needs to capture 42.50 shoulder top in short order for max squeeze — Cutting on a closing basis below $39.00

SVVC: target scale before $33 — cutting if < ~ 27.00 on closing basis — buy thrust this afternoon to close as doji was aggressive, want to see buyers show up in similar fashion again between $28.75 – $29.75

YELP: Really needs to hold above the 5/14 lows(~ $19.85). Bear still have the edge in price rotation — 21.50 I see as significant, sellers want to hold this line as they’ve done today and last week. — We could expect a battle for $23 if we break $21.50 — I start expecting lower prices should price spend too much time below $20.33

AMZN: Lacking direction, but digesting the earnings and maintaining higer valuation — appears rangebound between $221 and $229.50 — keep eye on sentiment and behavior bewtween $224.30 – $226.00 — Cutting on a closing basis, too much time in low $217’s

RAX: $49.30 is key support for bulls. It’s the price we gapped away from last February and site of primary breakout. I’m a seller below — watch for overhead supply concerns near $55.60, consider scaling

UPS: Want to see buyers defending the low $75.00, otherwise $71 becomes realisitc downside target — Looks awful for the bull case, with lots of overhead suppy concerns especially high $77.00’s

P: A bit stretched, but aggressive move higher from a base starting mid-April — Like being long unless bulls lose $8.75 — 05/17 Update: risk range low now low $9’s.

GSVC: Has gone nowhere since late January, range bound between low 16’s and low $19’s — trade accordingly. Give the bulls the edge above low $17’s

So that’s my price thoughts.  I appreciate any feedback, unless it’s expressed dislike for the brevity above.  This I don’t appreciate.

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Swing For the Fences

Listen up.  If we are indeed range bound in the indices this summer the opportunity to swing your bat will be on social stocks.  I will hammer this message again and again, because you need to understand the importance of these stocks ripping higher.  They are America.  They are our latest innovation.  Remember everyone talking about our shift away from manufacturing and into service?  Well this is the shift’s first major biproduct.  A slew of social companies held together by the FB LNKD Twitter ecosystem.

It’s so major we have live coverage trumping the perils of Europe and the other backward hell holes of the world.  All eyes on our bell of the ball, dressed to impress.  Of course the action in the social space is relatively stronger than the rest of the market.  Where else can one speculate on new innovation occurring rapidly?  These companies are working.  Companies like TRIP, Z, YELP, LNKD, and ZNGA.

Do you think the migration away from computers isn’t a tectonic shift with massive implications?  If yes I no longer value your thoughts.  Be gone.  “$P a broken business model.” That sits like a Christmas fruitcake in my stomach mid-May.  Makes me sick you would spit such vile speak.  70% of their traffic is mobile.  I say no more.

Watch these indices.  They may not give us much more downside.  Is FB ripping for a month straight baked into price?  The company and its ancillaries are Wallstreet’s chance to cordially invite cash flows back into the game.  They’ll pitch the story until they’re pink in their fat crumb spewing faces.  Is FB defying gravity all summer cooked into the price of GSVC and SVVC?  No.  Remember both hold Twitter, a site superior FB.

Should we trade lower, and believe me it could happen: buy the blood.  But please, have a plan.  Have some risk management Mr. Hero.  My chips say long, I retain about 30% cash to employ on weakness, and may raise cash into the weekend.  All of this sentiment and more could change literally on a dime, so you know.  It’s choppy out there sure, but we could be range low.

PS:  FIO is now shitting the bed.  Don’t extrapolate this out to the entire space, that chart was getting way ahead of itself to the upside.


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Fashionably Late

Sometimes I get phone calls from friends like, “Brah it’s 11:30 when are you getting your ass over here?” to which I reply, “Ga’head, I’m caught up, eating lamb shanks and sipping my favorite cab.”  I know I can sashay over to the club late night, have a few cocks and get my social fill (no homo).  I approach going out in such a manner for three reasons; I bore easily, I don’t enjoy nightclub drinking marathons, and the action is most interesting late night.  Perhaps I miss some early fun, but my vision is clear.

Now imagine owning some of these social stocks whose prices have gone to shit over the last quarter.  Imagine holding through that mess.  Puke.  These proverbial bag holders are so underwater they may not be thinking clear.  They may have the beer goggles on, eyeballing Mark Zuck and getting all Travolta gay in their heads.  All I’m trying to emphasize here is DON’T FORGET TO SCALE SOME PROFITS INTO THIS WEEKS HYPE.  If you’re Johnny-come-lately like the well timed traders residing in the godly halls of iBankCoin (GHiBC) and you’ve been reading my twits and shits, you likely have more clear vision.  You may tip your hat to Mr. Zuck, complement his hoodie, and enjoy the bottle service he’s sent your way.

Is this move in socials a one week hysteria?  NO.  But you can be skinned in more ways than one.  The move stocks like Z YELP TRIP LNKD and P will make over the next few years will be impressive, some stocks better than others.  But I promise you there will be bumps along the way.  Keep being smooth, take what the market gives you.  Build a day, build a month, build a quarter.  And if you want my advice on being smooth, follow me ova @twosmuth.

Finally, ZNGA is currently the largest cash flow stream for Facebook.  Are their games as cool as Wolfenstein 3D?  If you’re 30 and live in your parent’s basement, no.  To your mom and 12 year old girls, they’re leaps ahead in awesomeness.  Look for this stock to make a higher low.

Speaking of smooth:

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Well Behaved Misfits

The social stocks continue to behave well in light of macro fires and index/currency choppiness.  It was enjoyable to see P finally getting its bounce off oversold levels today, even though I was bummed to see Sr. VP @RaginCajun cash out.  He trades well and I applaud his victory.  I however want to see this company through a few quarters.  Contrary to the haters, the company is not a dead model and has sheet tonnes of mobile users, which I like to see.

It would be prudent to scale off some shares as we near what I perceive to be a massive overhead supply around $10.00, but abandoning the name entirely seems uncivil.  There are only my humble opinions of course, and mean no disrespect to RC.  I will consider taking such action tomorrow barring some new driven dump in the name before we open.  If we see such action, my only choice will be to pick an area TO BUY MOOORE!

On to other issues, shall we?  AMZN and APPL are going to fucking price war in the tablet market.  I see this as very positive for Amazon.  Price behaved well today, bouncing as could be expected after the post earnings profit takers had their selling fill.  TRIP traded suprizingly well considering PCLN is finalliy becoming “anti-momentum” as I hear declared on StockTwits.  Chess also highlighted the interesting megaphone morphing into a diamond chart pattern which I find to be a most interesting formation indeed.  He finds this setup and I find his vision to be quite astute.  I will be getting a bit itchy on the trigger with TRIP and unless it starts doing the “robotic auto engage climbing the wall of worry” look over the next few sessions. I may lighten up a bit.  I won’t completely sell out, I don’t think, because crazy shit like the $50.00 roll can happen without any notice.

It’s nice to see these stocks trading as individual companies on their own merits and price action.  In my opinion, this is a healthy sector of the market to participate in free from excessive correlation to indices and such.

Trade ‘em well friends,

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Perverted Sociopaths

After eating a claw full of almonds for breakfast, like a bird, I felt skittish and paranoid, like a bird.  Then talking to all the other birds on twitter, I felt like a fucking eagle owl from the high skies was watching us gaggle around planning to pick us off one by one.  Not to eat us, but for sport.  Territorial bird bastards…

I’ve backed off several of my conviction buys over the last two days.  I still love the names TRIP, LNKD, ZNGA, YELP, VHC, ADS, RAX, Z, P, and AMZN.  They’re good names.  And sexy!  Several of these names are extended though, and near the top range of where I expect them to trade over the next five to ten trading days.

My thesis is one of long term.  But as we enter the low volume choppiness of summer markets, I want to be nimble.  My cash position is north of 45% and I added some funds into AWK aka cash.  My current holdings in the web/social space by weight, are as follows:

TRIP, LNKD, P, AMZN, RAX, GSVC.  I still own UPS also and plan to be grandpa on the porch patient with adding exposure to the name.  However, I foresee opportunity to buy the name lower.

I took the 5% gainer I had from yesterday morning’s VHC purchase as a gift horse, and didn’t look twice, sold that shit.  Zillow is the first company I want to buy back into.  It was just behaving a bit Travolta today, and I don’t feel like having the pleasure of a reverse massage handie next week.

I’m quite enjoying the resilience of TRIP to the downdraft in PCLN.  I expected to see some pin action scaring speculators out of the name.  The relative strength keeps me confident the stock will trade higher.

I will begin sizing back into the names I watch on constructive looking pullbacks.  As always, you will be the first to know by keeping @twosmuth on your stream.

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Emboldened Bulls Instagram Their Lunch

Perhaps the big speculators had too much red meat for lunch, but they came to their turrets aggressive this afternoon.

I knew the morning would be challenging to navigate after disappointing earnings yesterday from RAX.  The company is a quintessential component of the social universe.  Just as electricity is generated hundreds of miles away and delivered to us in a nearly invisible fashion, so will server storage space.  The technology must become more invisible and less intrusive into our lives in order to progress into the realm of utility.  Consider RAX centers in the same manner.  RAX trades higher.  Today was an overreaction and will be looked back upon as a bargain buying opportunity.  This isn’t some novelty fucking coffee pot people.  Stop overreacting and selling the stock to shit you small brained parquet!

The morning indeed was challenging as bears pressed their muddy paws on my neck in names like PCLN and NFLX.  I really had no business being in either and found decent areas to bail out.  I then realized after reading five scary stories about the Facebook IPO that my mind was angry, slanted.  I scanned craigslist for any reverse massage listings but instead opted for a swim.  Feeling refreshed and emboldened, shit looked on sale.  A buying spree ensued as speculators apparently came to their senses and realized, “Wow, these social stocks operate in a bullish microcosm.  They do honey badger like shit.”

The energy that built throughout this afternoon was not immaterial.  The bears are on their heels going into the close.  And I get to sleep much better tonight.  Instead of waking up and pacing the mahogany lined halls of my abode all, “WTF RAX made shitte tonnes of money.  These aftermarket doucebags are dick suckers.” I will count sheep.  AND ALSO, being short LNKD…that is the kind of position that causes heart palpitations.  This ugly ass reversal candle will be seen inside the eyelids of shorts on every blink.

I got my AMZN position finally.  The stock is still grotesquely levitated after earnings, but I like my chances here.  I took a RAX teaser long home with me into the close.

Zillow, ironically enough, is punching shorts in the face and saying, “Fuck your house, now it’s a short sale.  Cheapest house on the block.”

Pandora continues to be a “broken business model” but is trading up finally.  I see more upside.

In summary, it’s nearly summertime so BEWARE and play your best setups.  Don’t be surprised if you get chopped out of some names.  However, the social/internet space continues to be a pocket of strength and the space is separating winners from losers in a rather draconian manner as we make our way through earnings.  It’s how the stocks close that is important.  Press the winners, this shit isn’t over.

Trade ‘em well gents! Ride with me too ladies (h/t sooz), just know this is how we roll:

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Talking Price on Social Stocks

These notes are part of my risk management and my assessment of price action.  This analysis is huge in my opinion and significant even if you are trading a larger thesis.  My main thesis continues to focus on companies whose product integrates well with Facebook and Twitter and promotes the new social fabric.  If you find this type of information boring or useless I understand, but it fits my trading situation.  However, I will trim and prune the positions using the following parameters:

LNKD broke out of a month long consolidation on killer earnings.  Today’s selloff certainly seems overdone.  I expect to see buyers continue their campaign in the name tomorrow.  The past resistance near $110.00 could certainly behave as support now and I’m eager to buy any strength down here.  However, I dread a reentry into the previous range and consider ~$107.50 where I lose interest and sell the name, short term.

TRIP was a buy into the close today and is of interest to me on any strength tomorrow.  The stock could receive some pin action from the PCLN earnings due out later this week.  I consider $38.33 significant and expect the area to behave as support.

P is catatonic and attempting to bore all speculators to death.  Beware.  The stock was oversold, but is yet to see any significant snap back action and is instead frustratingly flat.  Many traders want to see it trade into the $10.00 region and I consider ~$10.14 where I will take my first scale should we see upward price movement.  I’m willing to stay long the name as cheap as $7.54.  Beyond that price it could become an even bigger bargain, but I will watch from the sidelines.

YELP is range bound with s slightly bearish bias.  It’s bracketed between $23.50 to the upside and $20.50 below.  Watch the markets behavior at these goalposts for insight into future direction.  I love the product and name.  But I would consider getting lighter in the name around $24 if the upward momentum continues to wane and would certainly take profits at a second visit to ~$30.

NFLX needs a higher low badly.  Not quite as oversold as it was back on 05/02 and still demonstrating bearish tendencies.  I’m not trying to get cute on this one and will cut it below $71.15.

Z looks great.  Not adding at the levels but watching for continued strength.  Price may hang out between 41 and 37 for a bit but exhibiting excellent strength.

PCLN started looking bearish after a strong morning.  I’ll cut below $733.

ZNGA oversold, churning.  Seems to be attracting buyers anytime it breaches $8.  Could go either way.

GSVC needs to hold $18.25 otherwise we could see it trade down to high $16’s again.

UPS looks bearish with a series of lower high lower lows.  Be very patient building into this name.  Not interested in any more purchases unless strength seen below $76.75

I know these thoughts are fragmented, but they will keep me on track this week.  Happy trading gents!

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