Yes, there was a selloff this afternoon.  Indeed, the NIKKEI is doing scary things.  Sure, there’s lots of uncertainty in the bond markets.  And certainly, we’re knee deep in month end foolishness.  But why not have fun with it?

I know everyone’s different in their approach and I respect that.  The buy and hold investor who got involved any time in the last 5 years is probably crushing, if he picked good companies.  The swinger who is patiently waiting for cleaner conditions is probably preserving a nice chunk of earned capital, waiting for her next opportunity.

I’m trying a little bit of everyone’s soup.

So far, my first two attempts at this option game have appeared well timed, SNDK and NFLX.  I’ve taken scales in both.  Aside from the paper gains I’m sitting on, which are very real money, I have a free ride on my lottery tickets, silly contracts set to expire tommorow.  There’s something to be said about this approach.  If either one of these continue higher tomorrow, we’re talking about 30-40 percent gains.  I never considered such speculation until “The Fly” brought OptionAddict into the mix.

I traded the spooz so poorly this morning, I can’t wait to review the trades while slamming my thumb in a door jam.  I need my pointer finger for clicking.

I HAVE MY CHINA FIX: Long shares of HMIN and DANG

Let me talk about DANG a bit.  My good friend @stockcats suggested the name via fortune cookie.  One thing stood out to me, the near geometric perfection of the triangle up here.  The Chinese, they love structure, symmetry.  Their leaders will point to this chart whilst we sleep and demand it resolve higher, as a show of power and formation.

I nibbled on the little bank that could, NBG.  I can’t pass up a good joke, even if it’s on me.

See my Dee’s?  DDD looks fantastic up here.  So do AAPL SNDK CREE and NFLX.  FB doesn’t look too shabby down there, either.

I’m feeling lucky, so I’m pressing my bets all over the place.  I can assure you some of them are wrong.  Until we decidedly trade lower, I’ll keep dwelling in the speculative components of the market.  But hell I’m young, I can afford to lose it ALL.  Fuck it.

Should I fall square on my face tomorrow, this post will serve as a jagged reminder of my insolence to the cautionary winds.

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The market did the ole’ bad data, positive reaction thing, which according to my matrix is the most bullish market activity out there.

This led to a short squeeze across the board.  Which is nice.  Our first attempt out of the major balance area from ~ 1651 – 1641 is to the upside.  So far the profile is establishing a P-shape which tells me aggressive buying activity, likely shorts covering, drove price higher and now we’re balancing out.  The question on everyone’s mind now should be, will new buyers step in and initiate new longs?  Or was the action only temporary before we resume a path lower?

I can’t call it.  The market will.  Watch $ES 1659.50 as your barometer to the former, and 1652.50 for the latter.

I took some profits in my SNDK weekly options because, well, they expire tomorrow!  Awesome.  It’s kind of fun to put a timer on your trades, when you’re right.  That being said, I’m holding one runner into this attempted breakout.

I bought NBG.  This is probably dumb, but MANNNNNNNNNNNNNNNNNNNNNNN, I gave serious consideration to buying that last dip.  Danger: revenge trade.

What else, what else…ah yes, I sold a bit or RGLD exactly as planned.  You must love seeing a good plan play out for old Raul.

I sold OMEX, it looks like it might roll.

I booked ¼ of my $DDD long.  I’ll always take 5 percent home.

I lost money in the futures today, taking stupid trades.

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We just wrapped up another neutral day in the spooz.  It’s funny, these neutral days, sometimes referred to as normal days, are very rare.  Yet here I am, for the third time this month bringing one to your attention.

The trade is so telegraphed, it’s treated me well.  I didn’t take it today because I was pulled into a meeting, but damn listen up: when you get a wide range during the first hour of RTH, then there’s range extension in one direction (today lower) then dynamic price action takes us ALL THE WAY to the other side of the profile and we get range extension in the other direction, there’s a HIGH probability price will return to the mean before doing anything else.  Awesome and amazing, yes yes yes?

Anyhow this type of session often precludes turning points in the market.  Hopefully, the turn is to the higher because I tossed on a bunch of risk into the bell.

I sold my AWK investment today.  It felt odd, I’ve held it for a very long time.  I feel without it, if you know what I mean.  But I’ve made so much in the name, it has come so far, and Yields Are Under Attack.  I booked it.  Remember, I swear no allegiance.

This put a ton of cash on the books and all the sudden I was almost 50 percent cash.  Down here!?  It was too much to bear <sic>.

I went shopping.

I bought DDD this morning, and then I bought more in the afternoon.  I don’t like this stock very much yet.  It has all the makings of a bull trap, if you ask me.  Why am I long then?  If it opens higher it will rip heads off.

I added to my RGLD long.  Sometimes, when you feel like taking profits, that’s the best time to buy more.

I bought RVLT.  It spiked hard.  RaginCajun highlighted it very quickly, I just clicked the button.  The stock is on my “always stalking” list.  I trimmed a bit of bread off to place on my table into the closing bell.

I added to my SNDK weekly options, $57.50 strike.  This stock, like DDD, is tricky in that it didn’t quite signal.  I would have liked to see yesterday’s high taken out.  Hand grenades and horseshoes I suppose.

I’ll either feel very smart, or very busy tomorrow morning—trading my way out of the paper bag I built.  Something about making money in these markets makes me want more. Patience.

I cut cash down to 25 percent.

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I cut DECK early, booking a small loss, it appears I sold near the LOD.  Water under the bridge, the stock is chopping about.

I took 8 trades in the $ES_F, 6 winners and a solid green day.  I’m calling it a day in the futures unless we see a major development.  I like the idea of stringing two winning days together and I don’t want to blow it.  Two trades were taken outside the plan, one was a scratch and one was buying the VAL I highlighted this morning which was my second best win of the day.

We’re in a major balance zone.  I’m looking at big names like GS and F which had contra strength early on, and just took a big fade.  I want to see how participants react/receive this fade.

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As I put the finishing touches on my previous post, I received a rather unexpected departure notice from my best minion, let’s call him Number 2. 

I really hate seeing Number 2 go because the kid has panache.  He won me over several months back when he proposed a simple overhaul to a major process.  I liked his plan and brought it up the food chain.  After explaining everything to management they were standoffish citing their failed attempts at a similar process improvement a few years back.  Just that moment, Number 2 shut them down saying, “It will work.  If it doesn’t work, you can fire me.”

They were silenced, we were given approval and he made it happen.

He also knew never to bother me from 8:30-11am.  Any interruption during these hours would earn him a face full of boiling hot coffee and a demand for a refill.  Number 2 always took it in stride.

He didn’t die or anything, he just quit.  Best part, he doesn’t have another shitty corporate job lined up.  He just knows he’s not being utilized to his fullest potential and that he’s not paid enough.

I applaud the ambition of this young man, who will never read this.  40 oz bottles of malt liquor will be poured out this evening to Gangsta’s Paradise. Farewell Number 2, I know you will.

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There’s some follow through so far on this move lower and the bears seem to be having a little fun.  Perhaps we’re setting up for the Sell in June, Pop the Cocaine Balloon trade.  Perhaps this is just another buying opportunity.  You know my style, I wait for the big hands to stabilize things then I hop on.

I brought those $ES_F single prints to your attention earlier.  They were in fact slippery and we ripped right down them.

If the Paul Bunyan hands don’t show up soon, I may cut a couple of my laggards.

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I have lots of charts setting up how I like.  After seeing about 10 of them, I settled upon NXTS, which is a random broadcasting company with a stock flying in the stratosphere.  It doesn’t have much of a short float to speak of, but man the chart looks ace.

Anyhow, it’s getting faded into the bell.

I’ll be honest, for there’s no value for me in being deceitful on a web log, it felt like an obligatory purchase.  I haven’t felt propelled to buy much all day.  Perhaps it’s the Memorial Day, perhaps it’s the price zone we’re in.  I’m not entirely sure.  Maybe today would have been best spent foraging through the woods for mushrooms?

I like ANGI and I’m glad to have more in on that name.

I also bought INVN, same look chart wise, but actually a company I’m into.  It’s the combination of interest in a company and an enticing chart that gets me excited.

It’s a modest green day, surprisingly enough, which makes me feel like we’re still in a market of stocks, and not just a perfectly correlated mess.  For now I’ll take it.

http://youtu.be/iMR45VOKj58

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I like situations like JRCC. The setup appeared on no news, but I could see buy flow coming in.  Then you get a major development, one favoring your position and you get instant gratification.

But should you sell?  I always do, but not the whole thing.  The event completely throws the stock price out of balance.  Their slate was wiped clean of a looming going concern.  I don’t even know if they had a going concern statement in their financial statements, but they were teetering on the brink, no doubt.  So now what’s the company worth?  I couldn’t tell you, nor could I care less.  I know fundamental guys, debt gurus, hedgers, and directional gamblers all have to come to market a duke it out to determine value.  And that means we’re going to see vertical development, both ways.

Once I’ve cushioned the position with nice booked gains, I can sit back and see who prevails in the fight.  I can cheer for my side, but I swear no allegiance.  I’ll just as soon cut if the sellers prove a more formidable force.  For now things are looking good.

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We’re seeing reversal action in some of the pockets of strength, including solar.  But it’s not lights out yet.  We’re still above the major bias line highlighted this morning.

I’m still considering the $ES_F range from 1654.75 – 1657.25 as the bias zone.  We can turn out a few lights if price is accepted below here.  Until then, swing away.

http://youtu.be/yfv9z23lu9E

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I have positioned myself in these markets exactly how I didn’t want to—long this HDGE cheese and bologna sandwich with a side of stocks and cash.  What a shame it is.

This is how the week has played out for the Raul:

I’m trading this ES_F in the mornings.  I enjoy the process and planning.  My win rate is 70 percent meaning I’m right WAY more than wrong.  This is a critical component to consistent profitability.  However, I’ve deviated from my plan a few times this week and it has resulted in me losing money.  I’ve lost over 600 dollars, a gift to the market gods.  I kid you not, EVERY time I deviate from my plan I lose money.  Every time.  Next week, my goal is simply to not deviate from the plan.  If I stick to my plan 100 percent next week, I’m going downtown and getting a steak the size of a toilet seat.  Until then, no red meat.  I’ve been too aggressive.

I’m red on stocks too.  Unreal right?  Stock market went up five days straight!  My CREE is up 6 percent.  I’m still red.  I had a losing trade in ANGI.  Other notable weakness in my book includes FB and SAM.  BBRY is new and still looks decent, same with new long YELP bought this afternoon.

I have this damn HDGE.  It hasn’t bothered me all week, until today.  I bought this position as insurance for my book.  Much like real life, the insurance just costs me money and I receive zero benefit beyond homo peace of mind.  I’ve accepted that.  I even expected that.  But my patience wears thin.  My cost basis is $18.30 and it’s unlikely we see that level any time soon.  HOWEVER, it’s so very oversold here.  “Markets—rational—irrational—solvency”  bla bla bla.  I know…I’m not adding to this name, I’m simply managing my way out of it.  I’ll close on the next bounce.

As bad as this all sounds, my book is hardly down.  As a matter of fact, I’m 12 percent YTD.  Last year about this time I had already given back all my double digit gains on the year.  Perhaps memories of that savage dick punch are what have me positioned oh so homo.

All-in-all I still consider this week a success.  Sometimes you just have to pay the troll toll to get out of a market hole.  I’ll be burning thickets of sage to cleanse my home of demons and digging into The PPT for clarity.  Best part: we get to come back Monday and do it all again.

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