Yet the sellers can’t gain traction.  Every attempt at sending price lower to fill the gap below stalls out.  The sell orders are pressuring the bid this afternoon in the S&P minis but not achieving any progress.  All of this pressure building up has to go somewhere.

Meanwhile, with the help of The PPT I found some shorts in ENPH and squeezed’em pretty well today.  I scaled some profits, but left ½ the position on in case the pain trade continues.  The weekly chart suggests it could.

I hopped on board Zillow today after the impressive Pending Home Sales Index, which crushed expectations.  I hate when a house goes pending, BTW.  When I was about 9 months into my hunt and houses would go pending in less than 3 days listed, I would chastise my real estate agent and damn the illiquidity of homes.  This chart looks mint and I want it to keep looking mint so I can size it up.  For now, I’m ½ size.

These F shares are working out, up around 4 percent since my entry.  So far, we’re looking at a v-shape bounce in a big consumer discretionary.  The same goes for TPX.  This is like the housing trifecta: Z, F, TPX.  You find the house, you buy the car, you buy the bed.

We’ve been trend up all week, which SHOMP-wise makes sense, but for all other intents and purposes seems odd.  Now the questions becomes, do we run into the 4^th of July?  If we do, I want to be in patriotic names, like F.

I’m still in FB, did you know that?  I’ve ridden through the trough, and now things are looking really good.  This also fits the suburban lifestyle, shack up and talk politics with your delusional relatives.  Note: I don’t do FB.

Anyhow, I’m 35 percent cash and long the following names.  I’ve bolded my favorites and they’re listed by size, largest to smallest:

AAPL (fml), F, FB, SODA, YGE, Z, IMMR, CREE, TPX, ENPH, and ZION

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The tape we’re navigating continues to be tough on me, hesitating to grant me generous sums of money.  I came into the day a little over 60 percent long, as where I was more like 80 percent long on the way down, so I’m not recapturing my losses.

Plus I own some overpriced AAPL.  I’m afraid this stock lost its momentum a few weeks ago and is now destined to drift lower until a catalyst presents itself.  And here I am, -6% on the name.  I suspect we’re seeing profit taking by the huge funds who have called AAPL home for many years.  After a lousy quarter, who wants this name on their books?

My only action today in the portfolio was taking a ½ scale on my ZION shares.  Regional banks continued their strength today and we reached my initial destination.

I’m sick of solar stocks and I own YGE and ENPH.  I thought about selling both no less than three times today but I wanted to give them a chance to regain their mojo.  Perhaps they would think about how cool it used to be when they would run hard.  I don’t know.  Put yourself in a business owners shoes for a moment.  Would you rather build gigantic solar panels on your roof to generate a fraction of the energy you need, or cut your lighting expense by 75 percent?  Lighting which in most business settings accounts for 25 percent of the electric usage.  If I’ve said it once, I’ve said it a thousand times, “The easiest was for a business owner to place themselves in the graces of Premier Obama is to upgrade their lighting to CREE bulbs.”  CREE should have been accumulated on the dip…that’s your hindsight trading tip of the week.

I wanted to add to SODA all day and then I didn’t.  It just never convinced me.

Today was one of those sessions in the futures where I grind out all day long to compensate for two mistakes I made.  Then, sitting on a beige-green day, fairly confident the HOD was in, I got cocky and went long again and gave back my daily gains.  I made 1500 in profitable trades and 1650 in losing trades.  The lessons keep coming.

I’m off to tend to other business then swim no less than a mile.

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Perhaps it’s the way I chastised bondholders earlier today during my hunger rage, but I’ve had debt on mind all evening.  With good timing and prudence, debt can be a company’s best tool, allowing them to outpace their competition when times are good.  Of course it cuts both ways and poor treasury management can make a bad situation worse fast.

Rates have to rise eventually.  You know it, I know it.  Havens like municipal debt are experiencing a rout.  Pick your California waterfall: CXA, PWZ, CMF…brutal.  The unprecedented actions by Detroit’s financial manager effectively cutting bondholders at the knees, it’s shocking.

Brutal action, potential for rates to rise, you get the point.

But we know there’s a Fed bid in the equities market.  We know stocks have an upside bias until the whole shit house goes up in flames, and some of us (me) want to have names we can go long in this environment.

Enter The PPT.

Like Fly said earlier, trading without The PPT sucks.  He said so much more eloquently.  I’m not financial statement illiterate, but I like to spend my time digging into statistics and reviewing my trades and such.  So I come to The PPT with a simple query, find me companies with a beautiful debt situation, fat profit margins, and enough cash on hand to operate.  My thinking is companies not only will have to fork up higher interest rates on new debt, they’re going to have a harder time obtaining it.  Resources that should be focused growing their business through innovation will be siphoned into the debt game.

You dig though 10-K’s and what have you, I set up a screen.  Here are the bullet points of my screen:

MTD Return > 0% – I want stocks that took this selloff in stride, trading in a microcosm

Positive Total Cash per Share

Debt/Equity Score > 4 – I could fiddle with the other debt knobs, but I trust The PPT scoring system to do that for me

Hybrid Change (Daily) > 0% – In hybrid I trust, I want stocks that will move sooner than later, always

Profit Margin Score > 4 – Fat margins

ROE > 25 percent – I don’t know, “The Fly” always likes ROE

There are a few other qualifiers, the screen can be seen here by PPT members.

The list produces 11 matches today:

 

Then I grab the charts and see if I can wrap risk into any of them.

I like AOL vs 34

PSE sports awesome July stats, gapped huge on May earnings, and looks like it was a gift at 32.75

PCLN is coiled up tight with risk down to around 790 and tons of cash on hand

CBOE has a picture perfect trend higher, but feels like a chase (the best always do)

QCOR is a biotech, which I don’t dabble in much, but that chart looks great vs 42

These are just my back envelope notes.  I’m open to any refinement of the screen, comments, or questions.  Note also, given the hybrid screen I placed, the list may produce new results on a daily basis.  However, I feel like the most recent action bared the brunt force of bond panic, making the listed stocks’ hybrid strength of notable importance.

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While stocks are diligently working to syphon money away from my person, I am doing likewise to the futures market.  The game of cat and mouse going on around the world with Robert “Carmen Sandiego” Snowden playing catch me if you can with the US government is much like the run and gun jabs I’m taking.  How do you eat an elephant?  One bite at a time.

But for real, my equities are getting completely poleaxed in this environment.  All the dirty money I made trading momentum pumps is gone.  All redemption of coin depends on this market finding footing, which it started to do for a while, but they’re giving it up into the bell.

I sold RVBD for a loss and bought ENPH.  That’s all I’ve done.  ENPH did a pretty good job springing a bear trap on Friday, IMO.  Any upside velocity in the overall market could produce a squeeze here.

I’m still on #teamBTFD, now I need to get lucky and stop getting risk bombed on every swing.

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The S&P is trying really hard to form a tradable range here.  Talking ETF SPY, the brackets would be 158.50 – 165.50 give or take.  The mouth pieces are trying their best to help, coming out of their smoky offices and jawboning in the middle of a quad witching.  PPT wants a range low too.  Everything is pointing to a range low—except SHIBOR rates and suspender-wearing bond traders.

In the spirit of our gaptastic, have fun sleeping, stock market, we need some ridiculous headline out of Asia over the weekend that wastes no time, gaps us above the midpoint of our range, catches everyone out of position, and forces your hand to buy at a higher risk.

It would be fitting given the recent nature of this choppy courrrection.

I could see us coming into the office Monday to a huge gap lower too, that’s the environment we’re in.  That’s the environment Chess objectively describes to members on Sunday night when gentlemen take to their studies and make preparations for the week.

So I’m keeping position sizes smaller, cash higher than I would like to, and limiting the number of positions I hold.

I took a SODA long this morning.  It’s looking really good.  It’s only half size.  If it goes lower, I’ll double down.  If it gets to $74 I’ll scale ¼ off and let the market pay me.

I’m a proud bag holder of $423 dollar AAPL shares.  I bought them in the middle of the FED announcement yesterday.  I was completely swept up in the hype.  $420 is an important price level for AAPL because the degenerates who trade it think Phish plays good music.  Maybe they should stick to Chief Keef.

I’ve decided to stick with TPX through this indecision.  I hold a ½ position here also.  I want to make it 2x I love these beds, especially as the adjustable bed market continues to boom.

Holy Mt. ZION is trading well as are many other regional banks.  Holding.

It’s finally summer hallelujah.  We shouldn’t even be holed up on our computers but there are moves to be made.  Get your pasty ass outside and don’t forget the sunscreen.

 

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Whether you trade weekly, daily, tic, range, or minute charts you MUST recognize a lack of trend and behave accordingly.  To trade momentum there must be momentum.  I know V.King would enjoy that sentence.  Once you recognize conditions where momentum is gone, you must adjust to fading extremes or sideline yourself.  That’s it.

I like to use EMAs to give a trend some visual clarity.  When EMAs of different speeds (i.e. the 9 and 33 period) converge and then flatten out, that’s a strong indication the market is on pause.  Such was the case all morning.  Today it was easy for me to avoid because we were working inside a tight market profile and we had the Fed in the afternoon which I knew would give the market a pause.  More times than I would like to admit, I haven’t been so astute.  And every time I fail to recognize these conditions the alogs pick me to pieces.

I’ve been a doubter of any such trendless action most of June, but as the month drags on it’s becoming a distinct possibility that we’re entering a flat consolidation phase.  My 9 and 33 are flattening out and going sideways.  It would make sense too given that my momentum plays are all fizzling out.  Take a look:

 

I’ve spent the last few weeks churning my portfolio with small wins and medium losses.  All-in-all I’ve given back hard fought gains.  Anyone who tells you the gains came easy is wrong and unwashed.

Today I cut most of my China junket.  I sold off BIDU, YY, and MY.  I sold WETF along with the Fly and I took some profits in CREE, keeping the position about ½ size.

You may notice a much less manic tone in my writing.

I’m up over 50 percent cash now and lost around 1 percent today.  Current longs listed largest to smallest are as follows:

YGE, HMIN, IMMR, RVBD, CREE, SCTY, RGLD, TPX, and FB

I want to keep my speculative swing positions down.  I’m getting confused, tracking so many positions.  Plus liquidation becomes more taxing by my broker.

I’ll ride most of these through the trendless chop of the index.  But I swear little allegiance to any and will cut to make room for others.

I don’t love the idea of shorting up here, but both T and JBLU look like great swing shorts to my eye.

Bottom Line: It’s summer now.  We may still push higher but we’re showing signs of stalling momentum.  This is the third major pullback too, it has a much lower win rate then the first two.  HOWEVER, we’re on the proper side of the 33 EMA, my primary demarcation.

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As we mosey into the Fed event, my arm is slowly being eaten by a small Chinese crustacean.  I don’t hate the name yet, but why oh why?

I don’t even know what they do.

The problem here is I still like the chart.  What Uncle Ben says should have no real implications to the basic goings on of YY, but YY as an equity could see some action on the Fed.  So it’s on ICU watch, and I’m fully prepared to pull the plug if it takes a turn for the worse-er.

Same goes for fairy dust wind energy name MY.

Awesome, carry on.

UPDATE: Both of these positions stopped out post our holy Ben speaking. 

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Apropos that I would get all excited about the LED industry last night and not over the weekend putting me one day behind the move.  The kicker of it all was stalking GTAT yesterday but not pulling the trigger.  I wanted to see a capitulation move lower.  This is an example of an opportunity where getting half my position on would have worked.  And given the gaptastic nature of AIXG, I don’t want to chase it higher.  I’m shaking my fist at the entire industry.  At least I have my CREE.

All last night I thought about how much I wished I had bought BIDU and SCTY into the bell.  They both looked great on a closing basis.  So I came to market and bought them both today.  Now I don’t really want SCTY.  I can be so fickle at these choppy junctures.  No less than three times I’ve considered rolling all the SCTY funds into BIDU.

I’m getting really excited about this TPX trade, it’s working out well.  Look at that weekly chart.  Another strong weekly candle has to have you seriously considering this name for an intermediate term swing long.  Yes, I’m talking my book.

I cut RENN and HSOL, but the rest of my China basket is in place, lined up in marching formation, ready for ramming speed.  Actually HSOL looks ready for ramming speed too.

At one point I was 92 percent long.  I had to adjust that down a bit.  I cut ODP, RENN, HSOL, and DDD.  All-in-all, I have too many longs if you ask me.  I’m bombarded with great setups and my ADD has gotten the best of me.  None of these trades looks bad at this point; they just don’t look as good as my other longs.

Now I’m sitting 75 percent long, awaiting The Fed.  I’m very slightly red on the day, and my broker loves me.

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They’re showing up more and more.  Look around.  Check out the latest municipal project in a town near you.  Keep an eye on the businesses that you consider innovative and on the cutting edge, the LEDs are coming.

As you know, I’ve made my bed with CREE.  I’ll ride this stock to zero if need be.  The stock is up 85 percent year-to-date.  Don’t say I didn’t warn you, bang the drum, and play along for the duration.

We’ve played around with some other names, diddling really, trading the pumps in RVLT and LEDS.  That’s all I’ve conjured the conviciton to do because I find the companies to be shit, for lack of a better word.  But I’m getting the craving to commit more capital to an intermediate term idea.

With that in mind, I would like to turn your attention to Aixtron, ticker AIXG.  There is a lot to like here, so we’ll go through the following bullet points then we’ll look at the lovely charts:

1. They’re German
2. They have Chinese factories or “Training Facilities”
3. They have a sales office in California, where the gold is
4. They have a sales office in Israel, where the Israelites live
5. They don’t have a hovel website like other LED companies (cough, cough, LEDS)

All of that is nice, but you know what really matters most to me, the price charts.  Price is lining up on both the daily and weekly timeframes.  These foreign stocks trade awful intraday and often gap all over the place, but if you accept that, we’re looking at a nice risk entry.  This one also may be too thin for some of you bigger players.  Nevertheless, have a look:

You have to give it risk to $15, but PPT members, have a look at the proprietary statistics…we may not see much opportunity lower.  Either way, a smaller position size until the position starts to work or offers better entry for a double down may be the best way to play this name.

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I’m sticking to the China theme mainly because the charts aren’t over extended. I can get decent risk based entries in names that could produce huge returns. That’s the humble reasoning.

The subjective reasoning is the Chinese are coming. They’re coming for the US markets riding solar powered Godzilla monsters and they mean business. My list of China longs is, well, long:

YGE, HMIN, YY, RENN, HSOL, and MY (listed by position size, largest to smallest)

All together, the basket represents about 35 percent of my portfolio. May they all go total Godzilla on a town near you.

UPDATE: I’ve pinned all the charts up to detail what I see

http://youtu.be/9T8vlrPTkYA?t=41s

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