When the stock market starts acting up you really get to see the character of a person.  It can be really lousy to lose 3% of your entire risk capital in seven hours.  A big drawdown can cause actions, often reactions, where your decisions are framed around your own finances and your own state-of-mind.  It is important to break this habit of thinking about yourself or any shortcoming you may have.  When you catch yourself too caught up in your own person, just STOP everything.  Take a walk.  Talk to some birds.  Help a friend with a tough situation—anything to change gears and normalize your thought patterns.

Most of you are intelligent otherwise you would not be reading iBankCoin.  When presented with facts or bits of logic like price levels or candle stick charts you can make sound decisions.  But when these exact same circumstances are presented in the heat of battle it can be difficult.  I only speak from personal experience.

I read an interesting tweet yesterday while the market was playing whack-a-mole with my portfolio.  According to @facthive, sarcasm is very effective in reducing stress and coping with tough situations.  With a name like @facthive, it must be true right?

And with that thought, I will promptly step down from my soap box and discuss the market.

Listen, people of the internet, yesterday was a day sent from the bowels of hell with the explicit intent of striking terror into your rapidly beating hearts.  If you were late to the long party, trumped up on some hot money stocks (TSLA, BALT, RVLT, take your pick) you were summoned to the town square for the tar and feather treatment.  Raul of yesteryears would have solemnly capitulated into that move without second thought.  It broke everything I was watching.  Shit was broke.

But the precious, our beloved hybrid PPT score, came out and gave us the subtle wink.  I have built some algos of my own which fire off 2-3 trades per day (bastard elRoi) in the futures.  I learned one thing early on—trust your signals when things feel their worst.  I knew, based upon the laws of large numbers, that bulls have entered an environment with a statistical advantage, short term.

Did I expect this bi-polar turnaround?  No sir, and I don’t particularly like it.

Yesterday looked like hell, today looked like a Friday, and all of the sudden the weekly chart in Citi (my SOTY) looks picture perfect.  Financials should be a hot topic next week and could be an important element in the next leg higher.

I have gotten overly verbose and our time is precious.  Let me sum things up rapidly:

LIGHT EMITTING DIODES are the WAVE OF THE FUTURE—hop on.  Retrofitting is where the gold is: OESX and RVLT

Tesla makes the hottest automobile on the planet and is run by Tony Stark.  It is going to $200 before $100.  My trading hand on this name is a force to be reckoned with.  Elon whispers things to me.

AMBA looks hot, so does USD.  Go figure.

If you BOT TWTR right when it opened (like Raul) it is already down 10% like a piece of flaming garbage. The market is wrong right away on this one.

I traded the /NQ with 95% plan compliance, earned an honest man’s wage, but did not capitalize on Thursday’s action because I was taken out of my zone.

Miley Cyrus is no worse than any other pop star, until she isn’t.  Enjoy the icons manufactured by suits in boardrooms.

The turkey is still coming, whether marketers have their way or not.  And with it comes the chicken.  Do not question my voodoo powers.

Be water this weekend

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I went into the market and initiated additional risk today.  I bought a full size SCTY long and paired it with a smaller sized SFM long.  The SCTY long is a component of watching the TAN ETF and another chapter in my Elon Musk admiration saga.  I have always been a harsh critic of solar technology but if Elon gives it the Midas touch it will power cities effortlessly sooner rather than tremendously later.

The balance continues on the Nasdaq and S&P although significant amount of pressure is being applied to the sellers all day.  Price continues to linger on the highs without much in the way of a rotation lower.

While all of this is occurring my very hot, top-notch momo stocks are SILENT.  Like, scary move silent.

Adding high profile SCTY to a basket with ONVO, RVLT, lots of GOGO, and a few other menaces (LEDS WTF?) was like smoking a Newport (extra LO) whilst laying on a crate of dynamite to stargaze.

The combustible matter below my person will either propel me to the stars or leave no remains except a dusty crater in the night.

Tomorrow…I hope

I’m sick of waiting for my outcome.

94% long
Excellent symmetry in this video:

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First off, I suppose it was a matter of time before RVLT would lurch its dull dagger into my gut once CREE hit the bricks.  Today the Grim Reaper paid me a visit and took a swipe at my groin region.  This is classic, no-news-but-the-past-setting-in sell flow.  I have made my money on this stock, and I have made money on this ugly chart, oddly enough, because I have conviction in the industry as a whole.

As promising as the market for LED lighting is my temptation is increasing to bootstrap the entire idea and do it myself because I am afraid these companies may have a different vision than I do.  This is a digression I am completely unequipped to pen on Friday at 4:40pm.

The important matter which had me making the hard decision of cutting longs was the massive absorption of orders I saw taking place throughout most of the day.  Absorption on a larger scale than I have seen in quite a while.  And it occurred in a curious place—just above a consolidation formation.  Tons of buy flow pressed on the market, and the seller only relented slightly into the bell.  I captured the following screenshot with cumulative volume delta on the lower pane and price on the upper:

It looks like a massive and patient seller which, once you see that type of absorbtion the next thing we look for is aggressive bid hitting with price dropping swiftly.  By selling WDAY and ADHD I am attempting to get out in front of that occurrence.

And to be quite honest, I should have “done sold” ADHD days ago at about these same prices.  That trade got away from me and I had to sit through way too much risk to get a more reasonable exit point.  It could have kept tanking taking Raul aka Pesce Piccolo down the toilet with it.

WDAY could still win, I really can’t say with any certainty it won’t but I was respecting the whale currents I see.  I almost cut WLT too but I will give it a little more of a chance.  If that spinning top candle confirms lower, I am out.

CREE is going to be the soxhlet for a while because momentum has left the building.  Let everyone forget about this name then consider accumulating.  Good news is Chuck Swoboda made his monthly DC payment to keep the LED revolution’s gears greased.  Here he can be seen presenting the ceremonial briefcase of cash (the real money gets wired) to our Commander in Chief:

I still have some Ford stock and I like where this company is headed but I never imagined it trading so poorly.  It needs to come to life soon or I may take my interests elsewhere.

I bought more GOGO today and I did so too soon and with plenty of vigor.  Sometimes when you have a ton of conviction in a name you just want more.  But this action has been benign for quite some time and it may offer some real horrorshow brutality for longs next week.  I can just feel it.

PPC is my largest position now, hehehe.  Earnings next week and I like where price sits currently.  I suppose I’m feeling lucky with this one as I sit minus ten percent.  May the chicken gods award my complacency with chicken rain.

USO needs to appreciate from here or it is toast.

LO can do no wrong.

ONVO made me and plenty other fine folks on iBankCoin good money this week.  That was a lot of fun.

I perked cash up to 15% after one day of being 95% long.  Have a great weekend.

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We are treading water up in the market highlands and when the air is thin thoughts tend to mend together into a blur from lack of oxygen.

I made only one adjustment to my portfolio today, reducing my exposure in CREE to a more manageable ¾ size into earnings tomorrow.  I intend to carry ¾ through earnings and use up to a 1.5 position size to trade my way out of any corrections.  If they gap higher, I will simply buy more shares at a greater price.  However I won’t go full size into earnings because as much research as I have done on the opportunity in lighting, my edge is stronger as a technician.  After the sale, I have about 20% of my equity portfolio concentrated into the LED industry via CREE, RVLT, and LEDS.

I want AIXG again, but I may take a pass because it trades in a ghetto way.

PPC has me 10 percent in the hole on a full sized position after two quick trading sessions.  Sometimes all the fancy timing and indicators get smashed with the gravity hammer that is unknown risk.  How was anyone to know a salmonella outbreak would occur the next day?  The stock has undergone heavy selling pressure over the last two days and it is likely to continue tomorrow.  We are coming into an area I believe to be support.  Should it not behave as support, and buyers do not react to the prices as if they are a discount (a reaction like when you touch a hot plate) I will cut my 10% loss.  Being a 10% position, this trade potentially lopped 1% off my book.  It sucks, but I live to fight another day.

PPC still has to work through earnings on Halloween before it gets into its seasonal sweet spot so it appears I was at least one day early on this long.

My other menace stock is ADHD.  The little bastard stock lacks discipline and needs to be made stronger by correction and medication.  HEAVY MEDICATION.  That will teach this stock to misbehave…talking rubbish about ghosts and imaginary friends when it should be memorizing Bible passages.  No, I have not been watching too many scary movies.

CLNT is set up right to be the next winner in the Chinese lottery.  Shorts, I have one simple question, are you feeling lucky punks?  Well, are you!?

Everything else is just wiggling around, waiting for proper order flow to dictate direction.  The RVLT daily chart has the exact picture I hunt for daily, but I suppose I am partial to the name.  I still have a very large position after all.

I traded the /NQ like a jackass today.  I overtraded and clocked a 22% win rate.  I over traded after writing less is more in my morning analysis—that’s what gets my goat.  Futures trading is all about bringing you A-game and following your plan to the T.  There can be no deviation.

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Hello Friends,

I have been busting my trading butt this week and the result is my best week ever.  I could not pull tricks like this without the hard work I put in and all the discussions I have with everyone.

The iBankCoin team is strong.  Make us your cornerstone and you will become a strong trader capable of defining your own edge and bringing it to the market every day.

I am 90% long some wiry stocks, some of the most violent movers in town.  And I am cutting out early because things are about to get plum weird in la casa de Raul.  This is gluttonous complacency.  ONVO was/is my largest position.

I added to my chicken for the chicken is soon to ARISE!

For some excerpts of the hedonism and debauchery tune in this weekend via instagram at my handle @twosmuth

http://youtu.be/LoQYw49saqc

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After I sold MHR and VIPS it felt good to book the ten digit gains, and it made sense with my trading plan, but I suspected my mind had gotten in the way almost immediately.  But being overly concerned with booking gains would just jumble my mind further, so I jumped back into the waters looking for my next meal…essentially.

USO, perfect, full size

Bullet point reasoning:

• “I’m an oil man”
• USO moves slow like sludge
• All my mind wanted was crack stocks
• Was sitting on multi-month support, chillin’
• An esteemed 12631 member and I discussed and agreed it had a good look

Two of those reasons pertain to how juiced up I was coming off of yesterday.  iBC Chief Market Strategist “The Fly”, the brains of this whole outfit, eased up and I felt overconfident.  Then I missed an entry I really wanted on ONVO.  Then I made an earnest attempt to punch a hole in a solid wood security door after storming away from my desk.

Yeah…it was like, cool out hot head.

So I stopped trading.  I stopped watching the market mostly, too.  There’s over 30% cash in my books and no doubt that I can’t trade my way through a deeper pullback.

Completely aside, the burning Tesla Youtube video has the stink of fabrication.  I have no intention of proving it.  But if all news is fake then so is this spoof video.  Well done.

All news is fake.

Good night

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Blocking out the news flow is difficult but the blissful ignorance that comes from it is worth the effort.  Remember if something is important, my well curated twitter stream will tell me.  Better yet, the professionals inhabiting the many rooms of iBankCoin will tell me.  Anything local will be filtered to me via family, colleagues, and friends.  This frees my mind to focus on order flow and sustaining and growing my revenues.

Some days however, often after eating too heavy of a lunch, my attention span degrades by the minute.  For that reason I mostly do not trade futures in the afternoon.  Instead I usually read, stare out the window, or look at Tina Fey nip slip pics.  Nip slips always get my a.d.d. all worked up.

Anyhow, today I closed green by 1.25% even though I was up a rock star 3% intraday.  I scaled off a bit of YGE.  I could afford to do so because I timed my entry perfectly. The market provided me 7% gains, you see, by the time we reached swing high.  I will book that bread any day of the week.  I now have a lower cost basis and as close to a risk free trade as you can get in the markets.

How about that AMBA?  I couldn’t be happier about tossing my Zillow shares in the dumpster to fund my AMBA purchase.  The old me would still be in Zillow. The dead fish action would result in me drawing faces on lemons with a sharpie and then tossing said lemons into my Blendtec emotionlessly.  The house would smell lovely as I died on the inside.

Zillow speaks to the selective nature of our market.  ChessNwine has been keeping this thought at the forefront of our trading mindset in his Weekly Strategy Sessions.  As a matter of fact, he brought my attention back to AMBA too.  I mean, it never left my watch list, and I am a total GoPro fanboy, but the reminder was a nudge on the shoulder if you will.

This AMBA trade has taken conviction.  I am glad to see mine coming back online.

Earlier I said this is all an appetizer, so you may be asking yourself, “What’s for dinner?”  Well my friends, LEDs are for dinner…and sloppy joes.  2013 is the year of the LED, they simply took the 3^rd quarter off.  I have been financing these sleepy laggards with high level SHOMPPERY and 12631 magnificence, but it is high time they come online.  My top picks into the fourth quarter are CREE, RVLT, OESX, LYTS, RBCN, VECO, GTAT, and AIXG.

I like CREE the best as a company, RVLT the best as a young man’s speculative investment, and AIXG for their Germanic tribal nature.   I am long the trinity and will buy more of both after I spank a few more trades for stand up doubles.

I joined Le Doctour in BALT today.  I really just like the chart picture, you know me.  He does all the macro stuff.

Everyone is complaining about the way /ES traded today, but I had one of my better days.  When you have an idea of the context we are in, bobbing along the bottom with no conviction, you know to get the laser sight out and get damn good entries to allow you to get out before the things stalls and reverses.  We are learning over here and making a little bit of money while we do so.  From the high win rate comes larger position sizing and eventually scaling.  Then we make the big bucks.

Ah yes, I nearly forgot the point of this post—Everything you see is fake.  The dog and pony show in Washington over Obamacare and debt ceilings is all fake, jack ass es.  Do you really think any of this really matters, really?  I does not.  The terror threat elevation right at about 3:50pm?  Yes, fake.  Syria, real and sad, but so is every third world where cavemen kill each other for the best poppy fields.  Making noise about them is fake.  I have nightmares about a war on our land all the time because of these pundits and the terror threat bullshit. Even some nip slips are fake. I know, horrible times we live in..

Fear mongering from the glass half empty crowd is dangerous.  Avoid the losers who can’t drop it.

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Pull up daily and 30 minute charts of EGLE, GMCR, ACTV, and END and you will see beautiful charts, tightly coiled and ready to make explosive moves.  I want you to note I bought none of them.

I did however buy CREE and MHR taking my long exposure up to 75 percent.  I have another 10 percent in SKF, leaving me 15 percent cash to navigate tomorrows FED day.  That’s essentially why I did not buy anything else today.  I like the stocks I mentioned in paragraph one.  Any one of those could produce a big gainer.

Interestingly enough, after today’s CREE buy and pooling in RBCN, 40 percent of my book is committed to LED technology.  RBCN has some action off the new iPhone home button too, but their sapphire is an important material in LED production.  This is my very concentrated bet.  Parts of it aren’t doing too well.  Take RVLT for instance—the chart looks hellish, yep…technical term.  And I’m -30% on the name.  Don’t care.  I mean, I care very much, but the stock is a long term speculative hold.  AIXG cannot and will not break out of its consolidation range.  My cost basis is the only thing keeping me in this play because if it wasn’t near the bottom of this range I would have a harder time stomaching these waves.

I took one trade in the /6E today.  After /6e pushed lower, it pulled back to a place I could enter.  The trade went in my favor, all the way to my target, but did not fill.  This happens often, and it used to cause a great deal of anguish and regret.  I would be like, “I put my target out too far, now I will be getting the fuck.”  Now I don’t sweat the action, but instead manage that which I can control at this point.  The /6E very well could have put in another thrust lower, and it still may, but it didn’t.  Instead it put my position below water and then just held it there.  Around noon I took a step back, had a stretch, and asked the following questions:

What has the /6E done?

What is the /6E trying to do?

How good of a job is the /6E doing on the try?

It’s helpful.  I pulled my chart out a bit, noticed the /6e has gone very quiet, something I noted this morning.  The market open introduced a strong thrust lower, but not to fresh swing lows.  We’re making lower highs, but also higher lows: it’s coiling!  That’s what it has done.

To my eye, the Euro is trying to do two things: the bulls are trying to work out of a range bound trade that lasted an entire year.  They are not doing a great job so far.  The bears are trying to reject range highs.  They’re doing a decent job, but have been smacked about quite a bit these last 8-10 trading days.  As a result, the /6E is marking time until an unknown factor causes order flow out of this consolidation.

It’s doing a pretty damn good job consolidating as the EMAs I track had gone completely flat on top of the VPOC.

So then, what’s it likely to do?  It was likely to chop the consolidation range, the short trade was dead.  Instead of just clicking the buy to cover and taking a 0.00012 loss, I was lucky to catch a bit of movement in my favor and only lose 0.0006.  I didn’t want to be in a coin toss situation any more.  I covered.  My entry was good so I really have no complaints with the trade.  It just as easily could have continued rotating lower.

And now you have read though my entire lunchtime /6E perspective and my subsequent introspective.  Have a great one!

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Last week I was trying my best to call out my futures trades in the 12631 chat room because I often get the value added benefit of hearing other members’ take on the position.  However, it became increasingly stressful to provide timely updates on my positions and manage the trades.  I thought I traded last week in 100 percent accordance with my plan.  As a matter of fact, I did not.  Upon reviewing the tapes of my trading, I found a costly mistake was made during the fast markets on Friday.  It was my largest losing trade of the week.  It was managed properly, once entered, but it was not in proper cycle sequence.

I decided at that point to keep my futures trades to myself.  I do this for two reasons.  First to benefit me by giving myself a more clear mind when trading.  Second, I want to build my confidence in the trading cycle before I present it to the good people of iBankCoin.  My colleagues all provided the finest value added commentary, and I want to provide the same.

Today was a quiet session after gapping higher in the indices, but I was able to extract 3 handles of profit from the /ES using Bossram.  I extracted another 0.0012 in the /6e, so overall I had a pretty solid day in the futures.

Onto stocks, I built a pretty solid day in my swing portfolio.  CLF showed solid follow through today, but I took a scale, reducing my long to ½ size.

I finally closed out END, toward the end of the day, when the momentum ended.  This was a huge position of mine, one I wanted to parade down the warm streets of victory lane.  Instead I chewed off the bits of meat left on the bones and tossed the carcass into an alley.  I made five percent, at one point nearly nine percent, and expected to make twenty.  But with international sweetheart Vladimir Putin putting a damper on the war, my thesis is eroding.  I took money while it was still there for the taking.  I like MHR better anyhow.

I was watching the live bloggers at CNET cover the AAPL WWDC and when they mentioned Apple would be using sapphire in their latest iPhone’s fingerprint sensor. I queued up GTAT and RBCN.  I like both very much as part of my hedonistic desire to own all things LED, so the AAPL news was more an excuse then a pure catalyst to put sapphire back in my book.  I took down shares of RBCN mainly because I like the chart better.  GTAT is coming into longer term resistance here at seven as I mentioned yesterday.  RBCN has a nice pocket of volume above and a simple-to-define risk.

My final move on the day was pure stock market vagrancy: I bought a stupid amount of MJNA shares.  The ticker came to mind during a discussion with The Rhino.  He was discussing Funyuns which reminded me of Half Baked and before I knew it I went down to the corner and bought MJNA.  The chart looks interesting to say the least.  To say the most I see really heavy volume coming in.  Perhaps Doctor Phil is about to discuss the benefits of cannibals for bored housewives or something…

I’m down a smidge today, I kept my SKF on, and I’m still about 25 percent cashish.

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Well how about that morning /ES session?  Quite the contrast to yesterday and the paint drying we were subjected to.

I had a great little scalp long at the open.  Then I engaged Bossram even though I wanted to see a test of yesterday’s VAH first.  I adhered to Bossram.  It took a loss on the long side, then it engaged short, and took a loss on the short side.

The bad news is I took 2 losses in a row trading Bossram, the good news is they trades were fully plan compliant, and could have been much worse had I not adhered to the plan.

Typically, it goes on a huge win streak at this point, so the key is to continue to engage.  But probabilities are probabilities, every trade is a coin toss.

Elroi scored one short for 1.75 handles and is currently taking heat in another short.

Onto my portfolio:

I sold some scraps out of my book, remaining runners in YELP, BBRY, and YGE.  I also bought more SKF.  Whether or not that trade works out is very much still debatable.

No reason to be down on these losses or saying adios to my winners, it’s time to dig my heels in.

 

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