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Post Super Bowl Commercial Roundup

The world’s best marketing is on display Super Bowl Sunday.  It’s hard for advertisers to get our ADD attention.  Yet once a year marketers are promised a massive audience who are actually excited to see commercials.

Going into tonight, my position bet was with Best Buy.  I thought they would deliver a solid advertising presence.  I found their commercial to be a non-event mostly because I was outside running a charcoal grill in the sub-arctic during its run.  No one mentioned it otherwise.

Samsung crushed the commercial scene.  They ran a funny Super Bowl ad campaign hard on the internet leading up to today and then a late game variation on the idea.  Then they splashed LeBron James in FTW.  Nice use of Saul Goodman too.

Chrysler delivered two solid ads, sticking with the serious tenor that the media machine receives well.  They played the military and the God card.  They want you to cry, they want you talk, then they want you to buy a pickup truck.

Through all the drama and Beyoncé emerged one very clear winner.  They didn’t have to spend a dollar on advertising, although they have plenty of cash on hand.  All they needed was a few thousand inefficient metal halide bulbs to overwhelm the electrical grid.  If only they had lit the stadium with the lights of the future, the LED lights of Cree, we would have had an uninterrupted Super Bowl.

Cree is already a beast this year, up nearly 30% in one short month.  The recent advancements in lighting grade LED technology are a boon for company as adoption rates accelerate.  Infrastructure rhetoric is sure to be on the tongues of our current administration.  How much of this is currently being baked into the stock price of Cree is unclear, but converting more of a city’s infrastructure away from outdated lighting is an insurance policy against fragile electrical grids.

Cree wins.  The babies from space had me for a minute, then it was Kia.

Bonus points to the Iron Man trailer, showing Air Force One blowing into pieces only seconds after the shocking power outage which my jaded mind instantly thought could be a terrorist attack.  Strange times we live in.

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Simple Working

Getting fancy with exotic stock picks has so far not been the best strategy for participating in today’s big move.  Your favorite senator’s bank, Goldman Sachs, and Notorious AIG are ripping in today’s tape.  A simple tech play like Google is crushing.  The non-farm and housing data out this morning was received well by the market and we’re seeing gap-and-go action from the S&P.  The NASDAQ is having a strong day too.

Meanwhile my specialty plays like solar and retail are trudging around, looking like they’re wearing their dad’s trousers.  Overall the morning session has been a progressive one for the bulls with strength in many key areas and a healthy start to February.

The profile today is long and thin suggesting buyers are initiating new trades at these levels.  The VPOC currently resides at 1506 which is a huge jump from yesterday’s at 1494.25.  The ball is in the buyers court going into the afternoon session.

If we see selling enter the tape, look for a fight at Wednesday’s value area high starting at 1504.  If buyers don’t present themselves at these levels we could rotate down through the value area and back below 1500.

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The February Seasonality Distribution

Seasonality data is still new to me, but given the volume of the data available it’s interesting to analyze the distribution to understand what is normal.  If we can define February performance that is normal we can hone in on stocks and industries whose behavior isn’t normal in the wonderful quest to extract money from our markets.

When you put all of the average monthly returns available in The PPT seasonality into a frequency histogram you see a normal distribution which forms the familiar bell-shaped curve.  Most readers of this site made their way through the school system by being massaged into the lower 1/3 of the bell curve.  Good for you.  I know a few of us were up in the 99th percentile, let us continue.

Once I have the data set I can make some observations which can direct my eye to potential opportunities.  My first observation is the slight upward bias of the distribution.  The highest frequency occurs above the zero line.  This could be attributed to the upward bias of the market during the month of February.  Next I use my eyes to single out where roughly 70% if the data is, much like the value area on a daily volume profile auction.  I’ve noted the range of normal February returns in orange on the following chart:

Much like the value areas from my profile charts, the opportunity lies at the edges of value.  This is where we can focus our attention and do business.  The extremes of the tails are interesting, but they could be erratic, event-driven performance.  If an industry’s stocks moderately outperform a massive dataset, there is a proclivity for repeat performance.

Thus I filtered the data down to stocks that reside in the fat tail of the upper distribution, with performance in the range of six-to-ten percent.  The data returns 187 (buck, buck, buck) stocks.  Finally I see which industry has the most stocks from this sample.  The winner is Industrial Metals & Minerals then gold:

Given Fly’s take on the data and mine [sic] I would say it’s going to be a shiny February.  It’s nice to see Senator Gint rejoining the ranks today.  You should read his post today and run through his entire archive and consider yourself lucky to have that knowledge free at your disposal.

http://youtu.be/oxpcZrQQM-4

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MONTH END: TIME TO RIGHT YOUR WRONGS

As a trader, your job is not to impose your ideas on the market.  Your job is to research ideas and see if the market agrees.  Losses are part of the process. – FuturesTrader71

Often times we make assumptions in the market using the data at our disposal.  I personally feel that probabilities are the best tool available to a trader or investor.  I’ve built many probabilities into my trading style, and am fortunate to get a glimpse into The PPT which is a treasure chest of probabilities I can add to my stock picking.

Taking a loss does not mean you’re wrong if the process is right.

Taking to the profile we’re seeing some weakness carrying into the AM globex session.  The S&P futures have hit their head three times on 1496 and at 8:25 the level has been rejected in a rather stern manner by the sellers. Should we see trade continue to rotate lower today, I’m looking for buyers to step in at the naked VPOC from 01/24 at 1490.50.  I will be looking for buyers to stabilize price here.  Should they not show up to the party, I must consider cutting weak names from my portfolio to raise cash.

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We Will Always Push the Extreme

With most of our countries attention focused on the upcoming Super Bowl, some people may have overlooked the nasty crash that occurred today at the Winter X Games.  The bone chilling crash didn’t weigh on me until hours after I heard the news.  It is one of those events that I suppose becomes more common with age where someone younger than you is on their deathbed.

I grew up hooked on the X Games.  I would much rather watch someone catch massive air and perform acrobatic feats over watching football or basketball.  Records were smashed every year as the hardware and ramps caught up to the courageous athletes.  Do you remember those gnarly street luge races where men wearing anti-g suits hurdled down mountains?  They would melt the wheels after two races.  To an adventurous daredevil like me it seemed I found my people.

I still partake in the occasional extreme activity, but never have I considered anything near the insanity of where these professionals have taken their respective sports.  The media wants to know if the games have gone too far.  How I could puke, instantly.  Perhaps we take for granted the massive risk these guys have taken for the last 17 years.  Try doing even their smallest stunt and you’ll be amazed you didn’t die.  They take huge chances, we watch closely because we know the risk.  It’s a lot like watching traders, or quarterbacks.  Any performance will be pushed to the highest level.

You have to expect to see carnage.  We’re fragile bags of fluid.  Please don’t sully the X Games.

In other extreme sports news, the biggest wave ever was ridden this week.  Check out one of the early images from the massive ride.  This is human nature:

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The Most Exciting Industry And How To Game It

HIT PLAY to unleash this jam as you read on good people of the internet:

Perhaps I’m being romantic whist envisioning the future and the architectural wonders it holds, but I seem to have caught the LED bug. I like everything I read about them. I like their features and hues.
The industry has the characteristics of a space race. The companies participating aren’t clinging onto old technology, spending millions on litigious hostility to defend their edge. Instead they forge forward casting aside old products at a modern rate and boaster higher performance. Their press releases boast about MORE lumens per watt, longer life, and the race for lowest cost per lumen. They’re creating solutions for businesses as amorphous entities. It’s quite exciting really.

With my mind halfway down the LED rabbit hole as I fired up The PPT this weekend, it was hard to direct my attention elsewhere.  Last week I bought shares of CREE post earnings as they’re clearly the leader in lighting grade LED.  They’re Chuck Yeager and everyone else is a Soviet henchman.  I expect big things from this name both in terms of revenue growth and human architectural advancement.

In an attempt to clear my head of all the excitement I have for LEDs I started running screens.  I see a few good setups but was nearly frustrated to see GTAT keep popping up.  GT Advanced is a sort of a shell of a company that set out to chase the renewable energy dream.  They grow rocks, essentially.  Their crowning achievement in the LED business is growing sapphire.  They will either sell you the sapphire or the machine to grow it yourself.  Seems odd to sell your tools in such a way but perhaps that’s how an outsider sees things.  Cree seems to have done away with sapphire in many of their 2nd and 3rd generation bulbs and that can only spell trouble for a lonely little rock grower in New Hampshire.

But of course after seeing GTAT pop up all over The PPT I had to pull up the charts.  I must say this play is a blaring short squeeze opportunity.  Starting first with the weekly chart you can see short sellers enjoyed to nice pullbacks where they sunk their teeth in and drove price lower.  The behavior in 2012 in many ways tells me this company was toast, and likely heading to zero if Obama lost.  The company is behind the curve but having a symbiotic administration in place gives them old fashioned government hope.  That hope may or may not be behind the force that has thus far thwarted the bears onslaught.  Regardless, the “third dip from the well” from a momentum standpoint is the lowest probability.  That also means it’s the highest probability to bet against.  SEE THE WEEKLY NOW:

Then we get to the daily chart.  It’s touting a highly visible inverse head-and-shoulder.  Is it too visible or just visible enough to get skittish bears to cover?  Fly’s out with comments tonight that it’s a kill the shorts type of environment.  I smell short blood in this name.  Stockcharts.com says the VWAP (volume weighted average price) is at $3.30.  Oh how lovely some good threes.  CUE OFF OF IT:

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Bulls at Every Dip

One of the recurring characteristics in the S&P future contract is buyers showing up at the value area low of the prior session.  They defended the key level again today, stopping sellers at the VPOC from yesterday just above the value area low.  We are certainly experiencing aggressive appreciation in many equities.  While I continue to note levels that could signify a change in sentiment, the bulls are continuing their march into the weekend once again.

A close near the high of today’s session could signal increased conviction by the buyers.  As we approach three PM (show time) I want to clarify what I want to see to stay constructive on my longs.

I key off the S&P and if we near the close trading above 1494 and better yet the VPOC at 1495.50 I’m keeping all my exposure.  I may consider cutting one of my weaker names should we lose these levels, but everything else will stay in place unless we take out the low of today.  Taking out today’s low would put many new longs into question going into the weekend.  2013 is the year of certainty we don’t have time for weakness.

Aside: Listening to Icahn last night and his tangent on the reverse-Darwinian nature of CEO succession stirs up the little voice in the back of my head.  I’ve never fancied myself a corporate type, what with the schmoozing and the stupid luncheons and the hierarchy.  I spend much of my life here and for what?  A salary I make bi-monthly on my own?  I may have to take the leap hear soon folks (no suicide, yes full entrepreneurship).  Oh the humanity of losing dental and health.  I really only need the catastrophic coverage as my body age is 18.  I’ve stood at the lip of this crevasse for nearly a year, contemplating the leap.  Eight out of ten say don’t do it.  Developing…

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What Is Your Edge?

“Good tools stay sharp, hold an edge.” –Bob Flowerdew, The No Work Garden

After a very long day of toiling with my people, working on another lucrative project for the house of Raul3, I sat down to my Minority Report touchscreen laptop and immediately directed it to iBankCoin, naturally.  I love reviewing the new Best of iBankCoin weekly series.  Seeing my name listed beside people who for years I’ve held in the highest regard gives me a satisfaction beyond earning coin.  I read this site in silence for two years terrified to comment and look like a piker or worse yet receive banishment.

There is so much talent within these halls and when I see my top two posts providing very specific and actionable trades I feel like I’ve done my job.  But what is my job as a blogging trader?  I know my job as a trader.  As a trader my job is to buy and sell stocks, ETFs, futures, or options when I have an edge backed by probabilities.  It’s important for me to trade high win-rate situations because it keeps me confident.  A low win rate setup can be profitable if the winner outsizes the losses to a large enough degree, but I don’t know if I’ll be around for the winner.  And worse yet, the setup’s edge may have broken and it will be expensive for this to become clear.  I like high win rates and I’ve digressed.  What I need to understand is where my edge lies in blogging as a trader.

As I do with any situation, I first attempt to apply logic and dig into the data.  What gets read the most?  When do the most interactions (comments/retweets/etc.) occur?  I can say without a doubt my morning review of the S&P 500 market profile is a flop.  You guys are either too tired, too confused, or bored beyond words after reading those posts because you say NOTHING.   But I won’t give those up; they’re part of my trading edge.

What does work?

Talking about America –  TALKIN BOUT MERCA, shyit.  Talking about America positively or negatively gets people talking.  People love talking about America.  It’s like gossip hour at jezebel.com (puke) here at iBC.

Citing specific stocks in the blog title – Your time is precious, so is mine.  When you want actionable ideas you like to judge a headline by its title.  I can respect that.

That’s about all that works for me.  So I hone my skills in The PPT, putting Fly’s robot brain to work for me to dig up very specific stocks ready to make very specific amounts of money.  And I write about them.  Check out my two entries in this week’s Best of iBank Coin post.  They’re very specific.

Therefore my only edge in this blog game is being right on my trades.  I can’t seem to charm you with literary wit or commentary couth.  So I’ll continue to be right early and often.  Don’t hesitate to read along and tell your friends.

I’ll reiterate: I deal in high probability trades.  These are the tools my good friend Mr. Flowerdew referred to.

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New Do(ugh)nut Trend

I’ve sat idle today, watching my portfolio oscillate through 50 shades of green.  It’s currently settling into a modest forest green as MLNX wet blankets the advancement in chicken and donut stocks.  I’m stalking a few names into the close, but I’m not certain if I’ll pull the trigger.

Interesting trend of late in the foodie world is the donut connoisseur.  For them the doughnut (spelled in traditional long-form) is like a blank canvas.  It’s a vehicle for introducing tasty sensations from around the world to your palate.  Around here they crowd into bakeries Sunday morning clamoring over the newest delicatessens.  Then (and this part just drives me nuts) they eat the doughnuts with a fork and knife.  They fork and knife the whole thing like it’s a steak.  You can see them through the bakery windows, sitting at small round tables, sharing doughnut photos on Instagram then cutting the doughnut into fork sized pieces.  They eat maybe one and a half doughnuts.

It’s my opinion that all of this bodes well for DNKN as they ignore said trend and stick to banging out mass amounts of donuts and coffee for the working man.  The working man is serious and consumes no less than nine donuts whist guzzling down a canteen of coffee.  This is the crack that keeps our job sites humming.  They work hard until eleven in the morning.  Then they crash and feel guilt.  This feeling can only be cured with more donuts, more coffee.  DNKN keeps winning, forever and ever, amen.

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