…I implore you to keep two names on your radar, both of which I’m long:

The chicken don, aka, MACHO TACO, Pilgrim’s Pride chicken manufacturing PPC

and

The royalist, a Gint special, Royal Gold RGLD

These are my top picks, and I do believe the gods of rally will elevate both names into the grandest feast of the year, if only for a stock picker’s benefit.  We will eat birds from golden forks, friends.  I’ve made my sacrifice to the gods, selling out of WFM, which is death spiraling.

Should the turkey gods besmirch me by taking the year off, ordering Chinese food instead like a COMMIE, I will sell said positions and use the proceeds to buy bulk quantities of soap, firewood, and ammunition (RGR).

On a personal note, I will be attending the local gun and knife show this weekend, popcorn in hand, to enjoy the crazies.

BACK TO BUSINESS, how I see it:

Trade’em well.

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The morning has been kind to my longs and I used the opportunity to take scales in a variety of names.  I have not entirely closed any positions since I would then be without my stocks.

Cash at 15% and may go much higher if I sell TBT.  A directional bet in TLT is 50/50 at this juncture.  If it stays firm, I’m closing the position out which will bring my cash north of 25%.

I did initiate a long in VHC early on.  It’s a very small, riverboat position. The chart picture is tantalizing, albeit irrelevant to the actual fate of price.

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Our populace really loves polarizing events and happenings.  Be it football rivalries, films like Footloose, elections, or chilled NYC residents inundated first by waters and now by trite “26.2” tourists.  These events put the spotlight on how fucking stupid an extreme opinion is.  You stand for nothing, except the desire to bring attention to your otherwise anonymous life by joining an argument.

I’ve run marathons, they’re spirited, sure.  In Detroit, we run over to Canada for a brief reprieve, then it’s back to running past piles of burning tires and shit.  I kid, slightly.

As for NYC and its diverting of “precious public resources” to having a marathon, I don’t go extreme and you shouldn’t either.  Wouldn’t it be frustrating to cancel and rework travel itineraries?  Marathoners also spend months in a training regimen that “peaks” on race day.  It would get their spandex in a bunch to waste such efforts.

If there was a tree shoved up my Brooklyn home’s ass, it would be modestly entertaining to toss firecrackers at the runners while huddling over a barrel of burning garbage.  If I was a resident, I’d certainly make lemonade from the situation; perhaps setting up a small card table and offering the runners a refreshing drink, that’s actually a shot of cinnamon.  Poof CINNAMONED FOOL!  Or maybe some locally sourced (from the subway tunnel) water.  Get creative and really have fun with it.

And although you won’t because life’s one big internet popularity contest, calm the fuck down.  Most of us are just sort of meandering down the opinion road, like water, living our lives.

STOCKS…TOP PICK: WFM — they’re coming for you.

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I’ve been positioned short long term treasuries for many weeks via TBT, riding through a reverse split and three gyrations of waning momentum to the downside.  The correction beginning in the late summer had two very promising rotations downward, but since then has failed to make new lows.  Worse yet, when we take our view out to a weekly chart, it looks like we may have experienced a false breakdown.  Oftentimes the most violent moves occur after a highly visible chart pattern fails to fruit.

There have been calls for a generational trade in shorting the risk averse bonds.  A short bias has even been touted as the trade of the decade.  Many of the methods for obtaining bearish positioning on bonds contain elements of decay.  This decay has been eating away at the bears for quite some time.  Looking at the zoomed out weekly chart, you can see the correction has been mostly time-based.  This is die slow action for any decaying bearish position:

Be prepared for the possibility of new highs in the bonds.

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The downtrodden chicken manufacturing machine, Pilgrim Pride, in the face of “fucked up expensive corn and shit” has decided to turn a profit. Chicken Arise!

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I want to very quickly share with you why I decided earlier today to sell half of my DDD position. After riding through the downdraft in the name, the pump occurring over the last few days offered reprieve and put the position back in positive territory. DDD is a company I want to hold intermediate-long term, but I would like to get my cost basis lower. By selling half today, I locked in around 2.5% gains on the position, and now feel in a position of strength to buy any pullbacks in the name. The stock could continue to run higher without pulling back in any significant way. However, ignoring my charts and what they are telling me would be a greater frustration than riding the name higher with a half position ONLY.

I’ve highlighted two divergences occurring on the DDD chart. The first is a momentum divergence, with my CCI not confirming price’s new swing high, and the second is a volume divergence from the previous swing high:

I interpret the price action to suggest a weak handed short getting squeezed, which has the market for DDD stock getting a bit ahead of itself in the short term. The scenario I’m envisioning is either a time or price based consolidation occurring, which will allow me to put my full sized position back on.

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Last week I wrote a piece about the price action we’ve seen in American Apparel stock recently and implored you to consider these price levels as an opportunity to enter the name.  As you know, I’m currently long the APP.  However my position is only 1/3 sized as I used the recent strength to lock in some profits.  Since then I’ve patiently waited for an opportunity to get my size back on.

]It’s important when adding to an existing position to consider the risk of the added piece, and how it pertains to your entire position.  That is why I like to have a clear, defined setup for reentry.  Last week we talked about seeing how APP traded around the $1.30 level.  What drew my attention to the level was my 33 ema, which is for all intents and purposes my center of the universe.

We often discuss price levels, but what exactly do we look for to determine the opportunity a support level presents?  For me, it’s having a clear definition of where to say, “WRONG” click.  That level was established today by the long tailed daily candle, to be ~ $1.27.  Taking a look at the chart we can see buyers rejected prices attempt to head lower by reacting to the advertised sales prices with aggressive buying.  The long tail is the footprint they left behind.  I’ve stripped my chart down to only the 33ema to emphasize what I’m watching:

Tomorrow, should the overall tenor of the markets be turnaround Tuesday-esque I will be adding to my position.  I continue to implore you to keep the name on your radar.

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I’m not finding much information this morning on the Greek banks merger situation but it appears bullish.  Taking to the charts, we can see that NBG has been playing along with the strength in the financial sector, the strong tenor of the Euro dollar, and the overall easing of tensions in Euroland.  Shares are currently halted:

It will be interesting to see where we’re at when trading continues. A continued advance in the Greek bank’s share price is a key piece of confidence for the entire equity space.

UPDATE: Reuters reporting on the the situation

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I’ve been a longtime fan of American Apparel and their simple design concepts.  Their marketing has consistently been edgy to the point of going viral and occasionally being saddled with lawsuits.  The company has spent the major part of the last two years clinging onto solvency and the stock price has reflected that, sustaining trade below $1.00.

Distressed situations require heavy due diligence for an investor and aren’t for everyone.  However led by the flamboyant Dov Cheny, the management team has continued to tread forward.  Fundamental analysis is not one of my strengths, but the sheer panache of the management team paired with strong and sexy branding keeps the stock on my radar at all times.

At the beginning of August, APP began showing signs of life.  Since then the stock has gained momentum to the upside.  It broke free from a multi-month consolidation and retuned to $1.70 where again we saw supply enter and slow price.  Check out the action on the weekly chart:

On a daily timeframe, we see the power behind the breakout.  If you recall, the retail sector as whole had a strong thrust over the last few months.  Check out XLY’s chart showing strong demand in the consumer discretionary space since the beginning of August.  APP participated, and since finding resistance, has pulled back.  What I want to see is how we trade at the $1.30 level.  Today, the stock is reacting positively to some good same store sales reporting and a healthy demand for retail stocks.

I’m long since the $1.00 roll, and considering adding more.  I’ll be very patient with my add and may miss the opportunity, but I implore you to keep the name on your radar. As always, following @twosmuth on twitter will make you the first to know when I’m buying.

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A critical component to equity inflows is the unwinding of the massive flight to safety over the last two years which has seen TLT, the ETF tracking long term treasury bonds, up well over 40% since the beginning of 2011.  TLT is a capital hog, but the daily chart has tipped in favor of downward momentum as I noted a few weeks back.

Updating my thoughts on the name, I still like the picture we’re presented in TLT and still give the edge to the downside; however it is becoming increasingly difficult to stay patient on the name.  Redman59 commented on a more neutral choppy bias, and thus far that seems to be the case.  $125.00 looks like a critical price level for bears to defend, and I could see stops being trigger above.  Downside confirmation I want to see is price below my 33 EMA on a closing basis (~$123.50).

Although my positioning in TBT won’t expire like other contractual positioning, being an ultra it does have time erosion.  Thus the stubborn bond buyers holding price in the stodgy high volume area has me taking to twitter regularly to decree “DIE TLT DIE!”  And as is always the case, cheering for positions on twitter makes you look like an overly emotional piker.

Indeed, we’ve rallied well despite the precipitous advance of TLT, but should we see the trade lose steam, well, that capital has to go somewhere and I believe it will seek refuge in the mega cap stocks.  All this would bode extremely well for a bullish fourth quarter USA#1 rally.

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