The behavior of Japanese leadership sounds very similar to the game plan used only a few years back by our bearded leader and his manipulation crew.  The same behavior that in fact has driven party boy Scott Bleier to perma-disgust after years of watching the “can’t lose” #costanza market game is being implemented by Japan.

Sure it has its differences in rhetoric, but the end goal is the same, inflate.  Since they’re stealing a page from our playbook, and since I’m only a lowly chart trader, I thought we could glean some insight into the situation by templating today’s action in the $NIKK to the $SPX QE2 announcement.  Why QE2?  Well, the action is playing out in a similar fashion.

Check out the chart comparison click to enlarge:

This isn’t actionable information.  It’s more an exercise in interpreting a market’s reaction to a similar event.  After QE2 was announced, we had a modest pullback and then it was off to the races.  Maybe we didn’t understand the can’t lose implications at first.  Or remember how people insisted the Fed’s actions to be “firing blanks” and other hillbilly talk?  Should we see the Nikkei experience a mild down draft any time over the next 3-6 weeks, and buyers remerge, the play is to get long and see if they’ll rip like we did.

However, their market has been running much hotter than our own and could continue to do so, leaving us behind.  That would tell us the cycle is occurring faster than our own, and may continue to do so.  In this scenario, we try and grab hold to what we can, and hope to bail before things get too freaky.

Either way, the charts and agendas suggest we could see a big, sustained run.

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Happy Chinese New Year ladies and gents, it has been a lovely weekend in Pure Michigan.  I’m certain Tim Allen would approve.  I hope you’re receiving me well in the Northeast, under thick blankets of snow.  That first day of sunshine after getting pummeled with snow, beautiful!  If you’re without energy, huddled over a barrel of burning trash, perhaps eating beans, and still receiving this message I’m impressed.  May I suggest procuring a generator from GNRC with your modest corporate bonus?

I don’t care to dig too far, but I’m fairly certain people from the Northeast hype up snow storms more than anyone in the world.  A news flash hit me Saturday while I passed a hotel television.  Apparently they’re naming winter storms now.  I haven’t watched a full news show in several years, and certainly don’t tune in to the weather channel.  I’m impressed many find the time to observe such television for hours, my how I’ve digressed.

It may be with good reason Nor’easters and Alberta Clippers strike terror into the hearts of these northern folk.  Your energy infrastructure is always getting beat to rags, likely because God hates your Facebook lifestyle.  If you intend to continue your immoral internet existance, you better take proactive and preventative measures to ensure your robot overlords remain powered up.

Obviously we need to benefit via stock market picks when people and governments step up their game to deal with the new era of volatile weather.  We discuss this play often, and I’m going to go back through the archives and find ways others have played or intend to play this weather phenomenon.

Note:  The crazy weather is really rather normal.  But we don’t care about that.  We want everyone to think it’s crazy and with the help of their administration find ways to overreact and buy stuff.  That way we can make money buying companies who stand to benefit the most.

Before I dig my way through the dim lit archives of iBC, let me toss my top two names in the hat:

CREE and GNCR

Anyone else who has a favorite play please chime in below.  Adieu

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It was definitely a busy week in the market as we churned through our range.  The important matter is we finally auctioned the 1500 level in an orderly fashion.  That was the action I have been looking for all week.  I had a chart all marked up and pretty, ready for the interwebs to digest when my internet went down this morning.

Instead I provided you a picture of my PC screen taken with my iPhone via Twitter.  So haggard, but I did what I could for MY PEOPLE (OOMPH!).  So haggard:

http://twitter.com/TwoSmuth/status/299882387297419265/photo/1

Other notable happenings this week: ZNGA isn’t dead yet and plans to get your children addicted to gambling.  This is all very bullish as can be seen in the huge run up today.  Seriously folks, I attribute the strength in Zynga shares today to a decent quarterly performance (nothing extraordinary), the online gambling jawboning, and the MASSIVE LNKD move.  That final bit of sentiment could be what kept a bid in most the social names today.  We also had a nice breakout in the nazzy, that buoyed things I’m sure.

Zynga was my trade of the week, and I must solemnly tip my hat to iBankCoin legend and southern gentleman RaginCajun for trading side-by-side with me on this name.

I had to dump ANR today.  The stock has exceptional February seasonality statistics in The PPT, a high short float, and is part of an industry that was flagged by my seasonality trend work at the beginning of this month.  It can be frustrating to put a ton of research into a name, definitively have an edge, and still wind up on the losing end.  But believe me, it happens more than traders like to admit.  Knowing your risk going into the trade makes the decision to cut your well thought out trade when it doesn’t work simple.

Other times you just pull up a chart, it looks ace, you buy it, and it’s a ten-bagger.  So take the good with the bad.

I had a great week of trading here in the hallowed halls of iBankCoin.  My days as a tabber may be numbered, but I’m going to make sure and enjoy every minute I’m here.  You only live once and this is the best 15 minutes of fame Raul3 could ask for.

Have a great weekend.  I’ll be checking in with any internet foolishness or insights I have over the weekend.

http://youtu.be/GR8jOJZERhs

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Traders are getting all bent out of shape by celebrity day trader Rachel Fox.  She’s a young girl who is really popular to begin with, then she took to trading stocks on her cellphone.  Hell, she’s crushing it this year, up over 60%.  I love these types of situations.  Traders, myself included, approach the market with a humble mindset.  Often this approach is refined through a couple of decimating losses.  Losses that make you puke in a garbage can then sit on the floor shaking.

Then Rachel Fox hits the scene, Hello Kitty iPhone in tote, and starts crushing.  Is she getting lucky?  Maybe a little bit.  But for traders who have spent years earning their place in this market, it’s frustrating.  I couldn’t care less if she gets famous in the trading scene.  Eventually she’s going to get whacked pretty well.  It’s inevitable.

What separates the fantastic Fox from many other aspiring traders is she’s already loaded.  And she’s super young.  She has tons of time to earn more money from her professional career.  This means trading does not feed her face, pay her rent, etc.  She’s probably approaching trading with the right mind state because she’s not emotionally attached to the financial outcome.  I’m pulling for this girl.  This type of participation is what will feed us traders for years to come.  New money baby!

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As we enter another day of trading this market, we find ourselves hanging around near the highs but not pressing higher, it can be rather unnerving to have a large directional portfolio.  Yet we continue to see a resilient market unwilling to give back much ground.  S&P futures were higher overnight, peaking out at 1511, the high water mark set on Monday.

We’re off the highs a bit as we approach the 8:30 hour, and I want to point out a few odd characteristics about yesterday’s profile.  I’ve separated Tuesday and Wednesday’s profiles to the right to highlight the odd mirrored auctions that occurred:

Odd, yes? Also, you can see we booked an inside day with both the range compressing and the value compressing into the prior day’s respective range and value. This signals balance. It also tells up the market is building potential energy, and the next move could have some major velocity. We still have the poorly auctioned range surrounding the 1500 century mark. Should we blast higher, I will stop keeping this observation in mind. But until we leave this area with authority, which starts with sustaining trade above the orange box I highlighted above, I have to keep my aggression in check and keep some cash on hand.

Cash level currently 20% with a 5% TZA hedge (clown college)

Here’s a throwback surf jam for Kai and people like him:

http://youtu.be/1gdG7TZUqY0

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I kind of like this guy’s disposition:

YOU MUST CLICK THE LINK.  They won’t let it embed.

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Today there have been bears all over Twitter, talking about laying the smack down at 1505 on the /ES.  Here we are, lingering at the 1505 level into the one o’clock hour, and I’m looking for the bears.  So far they’re force has been weak, and I’m expecting higher prices.

I got a bit ahead of the market this morning and went ahead and made TPX a full size position.  I like that chart, it’s a tight little pullback to support and it’s in a volume void of galactic scale as my comrade ElizaMae pointed out a few weeks prior. 

The highs today have thus far been poorly auctioned, but here we are retesting them as I type.  I’m looking for signs of sellers, but so far they’re not being very earnest.  All roar no claw.

There’s lots of session left but the bears will need to show follow through sooner than later otherwise the buy orders will start flowing back in.  I’m expecting a hand tip by 2:30pm.

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Yesterday was close to forming the rare PBR setup on the S&P future contract.  The characteristics are a P-shaped short squeeze profile followed by a b-shaped long liquidation profile.  Both profiles on their own signal the movement in price to be a temporary phenomenal fueled by shorts covering their positions or longs liquidating, respectively.

When you see the two profiles sequentially, it signals a dangerous environment much like a cock fight.  The moves are violent but until a cock digs their talons into the other fighter the play is to fade back to midpoint.

You can see the naked VPOC was finally closed up yesterday, that point has been on my mind several sessions as it lingered below.  We saw a decent reaction by the buyers down at 1490.25 making it a VERY significant reference point going forward.  Should we not see buyers remerge at these levels on a retest it could signal the environment has changed and reducing equity exposure prudent.

Elizamae asked me a few days back on my thoughts regarding the lack of auction in the four point range surrounding the 1500 century mark. I’ll reiterate that it resembles a bird fight, put that imagery in your brain. Violent flapping and chest puffing are the norm. Think Twitter. If we see a health auction of these levels today, the next move is our tell. Otherwise, the cock fight continues. Until proven otherwise, however, the prevailing trend has the edge.

http://youtu.be/nze096dqID0

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Today was the quintessential example of why I scale out of stocks at logical price levels.  Check out the intraday action in TSL:

Pull up a daily chart of TSL and put your eyes on $5.75.  That’s a logical scale point.  If you want to be a chart chump like me you best learn to spot these levels and trade accordingly.  Now I still hold a 2/3 position but I’ve already booked over a 10% gain. 

I don’t love having a full size position on.  Until I get my first scale I’m looking at a potential for a big loss.  However, I know my probabilities and when to push my edge.  Now that I’ve booked a gain, I can put a stop in place and allow the market to decide whether I will get some cream or just the necessary bread and butter to be a consistently profitable trader.

Today Trina printed a huge upside shadow suggesting the presence of an aggressive–reactive seller.  It’s probably a conservative (hehehe, I kid).  I like to examine how a stock trades after such an escapade as it gives me tons of information.  Was today enough to work off the HUGE overhead supply from last year or will newly initiated buyers start hitting the exit too?

I couldn’t care less.  My job here is done.

I have to post the edited version of this song, because the video is essential:

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Coming into the day 100% long I expected to get a worse beating than this.  The broad markets are down today and it’s taking most of my portfolio with it.  Before it had a chance to sink me to a -2% day, the stock gods blessed me with a manic 8% run in TSL, my former largest position mind you.  Former, mind you, because I scaled 1/3 off at $5.75.  I told you hoping any home gamers would do likewise.  I sold Goldman too, all of it, because if any sector is due for correction it’s the financials which have been on rip for three months.  All this action raised my book to 15% cash going into the gap fill lower.  We talked all about that too.

Expect my tenor when addressing you to change modestly going forward.  My days of being premier in these halls are numbered.  And that’s fine.  I will add this feather to my cap and continue on my merry way (no homo).  As a trader you must always stay humble to the markets.  They are much larger than any one of us.  They are the collective action of trillions of dollars sloshing around, much like the tides of the oceans.  I will continue to be water, but I hate all of you.  Well, most of you.

The levels we currently are experiencing were highlighted this morning.  So far, no real damage has been done to the bull case.  We’re in a big range and we’re near the bracket low.  This could be an excellent buying opportunity.  I would like to see the NVPOC I mentioned earlier get tested.  That’s an interesting price level that could display a high degree of sentiment.

We have ZNGA reporting tomorrow and that’s sure to disappoint many social degenerates.  I plan to hold some long exposure through their earnings because MJNA is ripping and the CEO of this company promotes the use of MJNA declaring 4/20 a work holiday.  Good for you.

Bottom line: this sell off is contained until it isn’t, readers want to throw mashed potatoes at each other rather than banking coin, and marijuana is my basis for speculating ZNGA rips post earnings.

As of this writing my book is down 1.2%

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