I had a flat tire when I woke.

The markets took a pause for the most part today and although a calm, balanced day should be high on your expectations following a trend day today was borderline absurd.  The first hour of trade is referred to as the initial balance.  The probability of taking out neither the high nor the low during a day session is less than five percent over the last five years of data.

Today we witnessed a tape so benign it was special.  I took a long at 10:30 AM, missed my profitable exit around 3pm, and scratched the trade break even at 3:10pm.  You wouldn’t believe the frustration that trade produced.  I mean, I look at a stock trade like RVLT, slowly bleeding the lifeblood from my person, like a particularly pestering mosquito.  Eventually winter comes and it freezes and dies.  But each /ES position carries a marginal value over $30,000…which is why I like my gratification instant.  My algo, Elroi was dormant today.  I expected as much since Elroi thrives in high velocity conditions.  Bossram put me on the right side of the opening bell and I extracted 1.5 handles.

I beat my head against the urinal wall then ate several hummus treats.

I had quite the laugh when I saw my boss for the first time today and, I kid you not, he was wearing a full Canadian tuxedo.  It was so majestic.  The only wardrobe piece missing was a mystical wolf tee shirt.  He also wasn’t rocking the official Canadian belt buckle.  Needless to say, it was a clear omen from the stock gods and I sold the majority of my BBRY long.  I’ve kept a 1/3 runner in case Wayne Gretzky makes a surprise move onto the board of directors.

The wires are reporting AMBA in fact beat expectations, as was written in these halls for months by our fearless leader, Senor Tropicana.  As you know, I exited the position yesterday, but I’m still bullish on the name.  The GoPro is as cool as RedBull these days.

I slapped on a pretty sizable SKF position into the bell.  It seems in slight haste in hindsight, but I had just untethered myself from the /ES and found the action excessively befuddling.  Therefore I thought it prudent first to sell one of my longs.  But I looked at all of them, the little rug rats, and I couldn’t part ways with any.  So I tossed on the SKF hedge.

I sold a little bit of YGE but I’m keeping a small piece just in case it keeps going.

I took nearly a full size position in CLF early on, it looks hot.

Time to go home.

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I really like the feel I had trading the /ES_F today.  I’ve currently pigeonholed my discretionary trading to conform to the BOSSRAM ALPHA cycle.  This prevents me rushing.  It allows me to measure where we are in the cycle after some broad redundantly calls my phone so she can hear herself talk and position (or hand sit) accordingly.

You see, plates, I juggle so many.

One of my favorite trades in the market requires full attention because it can fly in your face quickly.  I didn’t want to stop trading the chart picture simply because my day job doesn’t afford me focus so I automated it.  This was the birth of ELROI.

Elroi doesn’t trade the picture as profitably as me.  But what he lacks in profitability Elroi makes up in consistency.  Elroi bagged 3.75 handles in profit today on trades that were too racy for me.  I on the other hand, wielding Bossram, made $25 or 0.50 handles.

But it was fun to watch Elroi go to work while I waited for the market to come into the Bossram wheelhouse.  This week I reset my account to $10k: five for me, five for Elroi, and I pulled the rest out to buy cat food.

You see, trading the /ES since April has been by and large a circle jerk and a dangerous one at that.  It came down to losing focus.  I’ve…courourrrected the problem and put several policies and procedures in place to ensure the new habits stick.  My future’s trading operation is looking more like a Fortune 500 company every week.  Goodness, companies like AMZN, GOOG, and SBUX aren’t on these lists by luck.

Learn from their cultures.

Now it’s exciting and I’m happy to fire up my futures every morning.  It’s me verses Elroi.  So far he’s winning.

ON TO STOCKS:

I sold AMBA entirely today.  I told you very clearly I was taking this cheap trick for 10 percent and then taking my business elsewhere.  AMBA fucked me once, I fucked AMBA once.  Perhaps after earnings we can make love, or something.  I earned about 8 percent on the trade.  It was a 12 percent position.

I took profits in Ford(s) because I was watching the /ES_F weaken.  It’s nothing personal.  I still have a 5% position.

My top performers were END and YGE.

RVLT continues to ‘suck goat’ instead of retrofitting Manhattan with LEDs.  Get to work you zoophiles.

I bumped my cash up above 25 percent and was up 1.75 percent on the day.  I needed it.  One thing is certain.  When RVLT stops going down…I’m forecasting champagne showers.

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I shuffled the deck up a bit today, closing out MHR after a fantastic run and scaling off some bread in USO, AMBA, and YELP.  Then I bought some TRLA even though deep down I wanted to chase Zillow.  I think the concept behind both companies is ostensibly the same although a realtor who has worked with both firms may possess differentiating information.

I used both when home hunting and found their services to be indispensable, even with the help of a realtor.  I could find listings and say, “Hey, guy, why didn’t this gem populate my daily emails?”  I liked keeping him on his toes but mostly I wanted to find the right house which was painful in my price range.

I lightened up on the whole oil shebang because of how many false breakouts I’ve seen across the markets these past few months.  The crude oil breakout looks so picture perfect, I don’t like it.  Then everybody started getting soft about playing missile vollyball and everything started to unwind.  Note: my profit taking occurred before the unwind.

Let me take a brief tangent at this moment and discuss bragging and the swag that goes along with it.  First off, I’m a very humble person in real life.  I don’t drive flashy cars or wear over-the-top fashion because I don’t like the attention it brings.  Last time I dressed too nice, my gym locker was broken into and picked clean.  I never dressed nice again.

When losing trades roll through, sometimes four of five at a time, I analyze them, painstakingly, live to the people of the internet.  As honest as this all seems, I do it for myself and to learn from my ways.  I read posts in the days leading up to the losses and peer into my mentality.  It’s a useful tool, a journal, for finding behavioral patterns.

So if I’m going to self-deprecate all over the internet and loath losers because I hate them oh so much, excuse you, I’m going to take a victory laps too.  You should try it.  It is fun.

Now let me ‘splaine’ something to you.  I nailed the oil trade and I will continue to do so.  This weekend I’ll be eating a meal fit for a king because, if there’s one area in life I never cheap out on, it’s eating.  Then I’m going to bring no less than two fast women along in my subcompact auto to sample the finest offerings our local scene provides.  Trust me, we all gone eat honey.  When they ask what we’re celebrating I’ll simply point upward and say, “Mother Russia” in a thick accent and then slam my fist onto the nearest table to summon the serving wench.  Then it’s ‘eyeball Paul’ time.

“Babe, I had to nail the oil trade to finance the drubbing I’m taking in this RVLT investment.”

Investing, my friends, is hard when your first investment vehicle is a three dollar stock that was a penny stock in January.  But I can tell you this, if their management team executes by collecting ALL THE LOW HANGING FRUIT spread across our country, a bumper crop if you will, they will make hundreds of millions of dollars.  The hardest part of this investment isn’t going to be holding through a drawdown, it’s going to be sitting on my hands when it goes green.  That’s where the money is made.

Or the whole shit house goes up in flames.  Hey, it happens.

If you’re young, time is on your hands.  We have many more years to earn any lost money back.  Why not invest into a high spec stock?  What else will you do with your money?  Lease the same BMW as your douche bag friends?

Finally, I didn’t even fire up my futures platform until 3pm today.  ELROI was dormant today and BOSSRAM took one winning trade in beta testing.  I have 600+ unread emails, five overbearing fruit trees, and one broken database to tend to aka why I abhor vacations.  I likely won’t be trading futures live until next Tuesday.

I missed you guys and I’m glad to be back in the saddle.

Until tomorrow or perhaps this evening,

Raul

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Now this is what I call selling!  Sometimes you trap too many bears in a room and they collaborate and unleash their fury on you.  They attack fast and with downward swipes at your face and genitalia.  I spent the morning with a brave crowd of traders, beating them back where we could, but there forces proved too great for the most part, succeeding at pressing us into our fox holes.

Then I threw in the towel and started shorting.  When you can’t beat them my friend, it is best to join them even if only for a while.

My portfolio is getting tossed around like a rag doll and I really just want to survive until the weekend so I can gather my thoughts.  NOTE: When your core goal is survival, you’re no longer in a position to cease opportunities; you’re out of the race so cool your jets.

CREE is getting decimated and every rally in the name has been on opportunity to sell more, intraday.  Silver is appreciating non-stop and JakeGint is back on the scene (awesome, btw).  I don’t even know what Barack said but it sure didn’t help anything.

Everyone gets raging pissed at algorithms when the market liquidates, but do any of these people have pet robots?  I do and it made money today, TAKING LONGS.

So damn, get educated, not all robots are out to kill you.

I’m going to talk to some birds before perhaps making a decision or two into the bell.

 

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Cumulative delta is often mentioned when discussing the trading of futures likely because the information is more available in the futures than it is on stocks.  For any given timeframe on a chart (ie 2500 contract, 3 tick, 5 minute) the cumulative delta for each bar is calculated as follows:

Trades executed at offer – trade executed at bid = cumulative delta

Thus a positive delta means more trades are being executed at the offering price, where a negative reading would mean the opposite.

The data lets us peer into the order flow and see which party is more active or aggressive when entering (or covering) their trades—perhaps using market orders or “hitting the bid” when selling or “taking the offer” when buying.

Zooming way back on the cumulative delta and applying a moving average filter to it, we can see that the /ES_F (the future contract traded on the S&P 500) has been steady accumulated since around 8:30am on July 25th:

The ramp in cumulative delta started at about 1670. Price action since 1670 has been working through an anxious return of confidence phase where we wall of worry higher before getting an actual move.  It’s another reason why I’ve been buying dips all week.   Seeing that level taken out would put two weeks’ worth of accumulation under water.  Bulls don’t want to see that.

That’s my big idea for the weekend.  I’d love to hear your take on it.  Have a good one,

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The Yen walked down the stairs lockstep with the SPY rise, like mirrors of one another—starting around lunchtime, which pleases me.

Anytime I trade counter-trend, taking a high quality and back tested setup, and I extract money from the market, I feel like I’m getting away with a sophisticated robbery.  I did it to EXK last week and over the last few weeks I’ve done the same long the Japanese Yen.  Now I’m out and a heavy hand is walking the currency lower.  This gives today’s move a carry feel and suggest we need to keep the carry not in the forefront but more so the back burner of our mind as we progress.

Solar stocks are getting the back ally beat down like they were flashing too much swag in the hood, which they were.  However, YGE is Bruce Lee, water, and deflected the aggressive bear bludgeons with finesse. They put out positive guidance before the bell that had everyone a bit taken aback  because they suggested shipments growth was “significantly better” than expected.  So they’re not jawboning about their FUCKING LEADS, like FSLR, they’re talking shipped product.  They’re shipping that Hanna Montana like Rick Ross, from the Phantom.

RVLT is cooling off a bit post earnings and I’m sitting here wondering if I’m about to get AMBA’d aka ambushed by sellers.  So I’m holding back the additional capital I intend to commit to this name.  But rest assured, I intend to own many more shares of RVLT before the year is through.  CREE on the other hand continues to rise, wall of worrying the old men on the sideline.  In other LED news, RBCN spiked lower after reporting unimpressive revenues but the dip was bought.

My only action today was to take a small position in USU.  I’m playing hot potato with a nuke in this name, but I figure I hate solar so much I might as well diversify my energy holdings.

Here’s my book of energy-type stocks, largest to smallest:

YGE, USU, KWK, BPZ

Goldman caught a nasty fade into the bell, I’m not sure how I feel about it, obviously I would have preferred some follow through since it’s my largest holding.  We’re practically back to my cost basis and all I have to show for it is the lint in my pocket as no scales were taken.

For in the futures I took one scalp, to the short side, in the middle of that big afternoon move higher.  I earned a modest $62.50.

My swing book made almost a percent today.  At one point it was up nearly 2 percent.  Cash level is 25 percent.

http://youtu.be/Gf4QSFK1dRE

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I use the weekends to review all my trades.  I’m sure many of you do the same.  There’s beauty to data, it uncovers patterns and habits.  Trading on a discretionary basis, no matter the instrument, is a mental process.  This is the case more so if you’re a retail trader isolated from the trading community.  That’s why it is vital to understand yourself as much as you do the markets.

I won’t get too deep into a cheap psychology lesson here because I’m no expert on these matters.  I’m just a humble trader on the rise.  I’ve noticed a pattern in my trades.  After getting stopped out on a well planned trade I’ll take an unplanned trade.  These unplanned trades have a 31% win rate mostly because there’s no confidence behind the position.  I need to stop.  A few twitter traders recommended The Power of Habit: Why We Do What We Do in Life and Business.  It contains some interesting case studies and one of the book’s cornerstones in The Habit Loop map.

Losing trades are part of the business, and I’ve accepted and even embraced my losses.  But I need to eliminate the unplanned losses as they’re cutting into my bottom line.  I built the following habit loop to give structure to a new method I’m adding to my trading repertoire this week.  I call it The STOP Method©.  (just kidding with the ©, you can use it).

Let me know if you love it.  Let me know if you hate it.  I want you to let me know if you’re a boss and don’t need any of these gimmicky tricks to become great.  I put a link to the book below if you’re interested.

 

 

LINK TO THE POWER OF HABIT: WHY WE DO WHAT WE DO IN LIFE AND BUSINESS

 

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Shorting the market this year has been a sport reserved for the elites because, to be frank, the tape is up.  That means although there’s a bear market out there, it’s lined with a more traps than an Indiana Jones expedition.

RaginCajun was courteous enough to highlight a PPT screen he is using to find intraday momentum pockets and I’m quick to get all manic about the potential on this one.

I’ve been watching all day as the list thinned out on the way down this morning, then, at the support I highlighted this morning where the market turned the corner, the list started building.

It was all over the nuclear move, and right now it has @tpain and me hunting shorts in GMCR.

Over the last hour I’ve watched one after another squeeze higher and you can see in the tape that it’s the tears of short sellers combusting and fueling the movement.  The transient nature of these moves is fantastic for the run-and-gun lifestyle I live.

Thus, I’ll be committing more resources to this list and playing these moves.

But first, I must find my way out of a few big losers on my books…..developing…

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If you’re trading the right setups there should be a margin of error, but squeezing those extra profits out of your winners is what shows up in your monthly and yearly statistics.

That’s why I’ve always loved how this Al Pacino scene from Any Given Sunday applies to trading. Big day tomorrow, for tonight, enjoy:

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As the rally pushes on, showing small signs of exhaustion but by no means cueing the fat lady, stocks…well most of them…are simply not providing the returns necessary to support the superfluous lifestyle we desire.

How is one to afford three-tiered infinity pools when their variable income is only a few hundos?

And I get it, it’s a tough tape, a stock picker’s market if you will, but none of this matters.  I want my cake.

Let it be known that I crushed the EXK trade so far and the BPZ awesomeness.  And I needed to because my two jumbos ENPH and TPX and a pair of smitten homos at a pride festival: useless to society.  On the day, I was up just a tad below 1%.

Futures are considered a different beast by some, but I think you just have to sharpen your lens and get a good timeframe that works for you.  For some it’s the 2500 contract volume bar, for others it’s renko bars or minute bars.  I use a range bar, currently the 6-tic.  But if you find a chart and like the way it trades over a few 100 days of data, go for it.  It’s no different than trading a stock.

My futures game is getting tight as in I know it’s getting close to reaching the next level of profitability.  I need to make sure the next time we see a real intraday opportunity in the market I can stick to my plan and not go cowboy on the tape.

Anytime the tape is levitating and I’m not making money, I start jamming into lots of names.  Instead, I’m doing the opposite, trimming some long exposure where I have wins and cutting out a few names.  I sold GRPN for example…at break even.

I’m sick of talking about myself, what’s working for you?  Are you playing the biotech lotto?  Are you utilizing an option strategy during earnings?

Are you crushing some earning’s action?

I know someone is coming all over this tape, I’d love to hear about it. (no homo)

I’m off to peddle graveyard roses for grocery money…

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