Listen, the market is stretched and then we went gap up big into OPEX. That event was just as risky to the financial complex as a big down gap after weeks of trading one-direction lower. Literally billions of premium that was hard earned by market makers was at risk of being blown to bits.

This simply cannot happen.

The market can rally next week, when all of that option leverage is good and dead. Will it? Without looking I cannot say. Next week is short, I am long, and the turkey gods are on the horizon.

The Chinese eased their lending rate a bit this morning. The Chinese love LED lighting, love it. This was why I had to pull the trigger on CREE. I know PHG is the king of LED lighting, but the lighting industry is a funny place inhabited by even funnier people. CREE is a bigger Nasdaq 100 component then traders give it credit for, and has been dead money for nearly a year and a half—literally a year and a half without a sustained rally. It is a pure LED play while Phillips still sells a little of everything.

It only takes a little bit of leverage applied to the right spot to loosen a boulder of profits. They cannot all be SUNEs, but if you put 1-2 of those bad boys in your book while managing your risk on everything else then you’re cruising.

I intend to pour everything I have into this second Weekly Strategy Session. Let’s plan out the turkey week to put us in the favour of the turkey gods. ARISE!

Do not be the guy buying the market at all times highs. Sure, you have banked hefty sums of coin this week on the backs of central bankers and dead shorts. But is that any reason to go all in up here? Why put all your hard earned coins in risks way?

I am a slightly different animal. My earnings this week are ‘big dicked’ [No SCOK] and I have thus earned the right to allocate some risk.

This morning I sold off my TZA hedge [adieu, my comforting friend] and started positions across the marquee risk complex via DDD, YELP, and CREE.

These moves are certainly not for the faint of heart, and have been implemented at smaller-than-normal size due to the elevated nature of the tape. Nevertheless, I intend to position my book where I see opportunity. Let us hope I am not viewing matters through rose colored sunglasses.

http://youtu.be/bmXumtgwtak

This evening I strolled down the snow covered walks of my neighborhood and soaked it all in. The automobile artery in the distance had the glow of gridlock traffic but was just far enough for the winter blanket to silence their sound. Instead I was left to hear my own thoughts.

I used to be a member of the rush hour traffic society. A member to a devote network of Waze users colluding to outsmart the traffic jams. No matter how I obfuscated the route the duration would be no less than two hours. It was nonsense, no way for a human to live.

Now my network is hardened speculators, our task is banking coin, and the duration is of no matter because I love every brute second of it.

Let’s close this year out like a bunch of badasses.

If I can make 1-2 good trades in the Nasdaq then I get to spend the rest of my day as I please. The key is, and this is because I am still developing, shutting the machine gun down and entertaining myself elsewhere.

You will often see me giving traders a risk reminder after they experience an outsized win. That is because I have churned away enough outsized wins by getting inside my head than most people my tender age. I love referring to my age as tender. Doesn’t that make you a bit uncomfortable?

Anyhow, there was a piece of context I will trade every time it presents itself until my eyeballs burn out of my skull, it’s a slip zone. Wrap some risk, grab the wheel, execute. I am going to make a career out of these things.

I put a side bet on GOOGL YOLO whilst we ran up the zipper, to keep me entertained.  It will likely lose.

That is what I was thinking over and over again as I wondered if the Tuesday afternoon slash Wednesday morning Nasdaq seller would reemerge in the afternoon. He/she/it did not. Instead we grinded away on the index board while a few marquee momos had the insolence spanked out of them.

The market stopped me out of a few ideas today, two of which came from the Weekly Strategy Session. You see, these ideas are not merely printed to build wonder, they are traded, and will fail from time to time. I am really good at losing.

Sofa king good, in fact, it makes me dangerous in the field. It makes money, oddly enough, being a good loser. Sometimes you go to your rec soccer league expecting an even matchup and the Greek national team shows up. You can become frustrated. Or you can pick your spots to defend, accept your likely fate, and be a good sport.

It is really a matter of how you want to live your life.

I have no hot pick for you. My favorite two stopped me out. I will be scouring the iBankCoins, just like yous, looking to see whos hot for what and whether or not I can build some risk and profits into it.

Oh yes, and before I forget…wow this market has frustrated the masses. The ‘illusion of higher equity prices’ is the most hated bull market in my short tenure. Pick stocks, wrap risk, execute. Say it with me.

I have an exercise you can to perform this afternoon. If you are actively monitoring the markets when the FOMC minutes are released, then you should perform third reaction analysis.

This exercise is useful for three reasons. First, the reaction to the reaction’s reaction tends to be the short term tell for the market. I have no data to back up this analysis. One day I will back test this theory with a team of interns, smoking monkeys, or robots operated by smoking interns.

Second, it forces you to slow down your thoughts as the market moves fast. That is, if the market moves fast. Third many of you, piker as it is, love inserting your p&l into your analysis. Put it away, and make an earnest attempt to identify the first, second, and third reactions to the data.

Feel free to share your observations below, it won’t upset me in the least.

Tomorrow we hear what our central banking overlords were discussing only two days before Japan dropped their stimulus bomb. Viewing said commentary in hindsight ought to be rather stimulating.

Making fresh highs is not conducive to day trading. There simply is not enough intraday rotation to make a meaningful nut. This is why you need to diversify you trader skill set. When the action is fast and you sit on the sidelines waiting for the dust to settle, you jab out scalps on the futures. When the day trade market is dead you swing trade stocks.

We are building wealth. It takes patience, logic, and a quiver full of arrows.

Just as we closed I opted into a TZA hedge.   I wanted to raise more cash into tomorrow but every time I queue up one of my positions I cannot justify selling them here. They all show promise of MOAR. My only other choice was a hedge. The Russell was chosen for its inherent weak qualities relative to the other indices.

Like any good hedge, it would be most pleasant if it simply lost money and forced me to stop out. This would assuredly be served with a side of big dicked gains elsewhere [extra SCOK]. Prepare yourself for the next level. For each milestone is a ridge to rest your weary legs and enjoy the view before envisioning your next climb.

When you put all of your actions into the proverbial hat and take the net, are you a giver or a taker? People often ask vocal traders who are successful, “Why do you do it? Why do you come to the internets and toil on-and-on with the plebeian class?” You hear mixed answers, but there is one main reason—we are selfish.

We are selfish in protecting our peace of mind. I can have a shit day, week, month, but if you can avoid one pitfall through a discussion with me then I feel satisfied—satisfied that this simple endeavor, trading, was not able to trap you with one of its simple snares. It also encourages the gods to favour us.

The harder I work, the luckier I get. And you must be assured an element of luck went into the top pick from my first ever Weekly Strategy Session. Look at this excerpt:

Here’s a closer look at the chart posted. Note how price has stalled today right near this logical scale out level:

But as I said before, we can plan until our faces turn blue, execution is what makes money. A few us of #nailedit inside 12631. You can too. It wasn’t some crystal ball trick, it was knowing where risk was, seeing price action with a supportive volume profile, and putting on a proper position size into the market. Plan, execute, repeat.

I am working a low risk entry on another WSS pick as we speak. But I am very busy and must return to my work. Keep sleeping on your boy because I walk barefoot alongside the plebs.  These are my people.

Today was designed to frighten late longs. It was an arctic gust to the face knocking them down to their tush. Now their pasty face has blisters and flashbacks of prior corrections are swirling to the frontal lobe.

Relax. This was sort of expected.

Will it go faster? That should be your primary concern. The Nasdaq did something today that raised a contextual flag. It printed a double low at intermediate term balance low. The last three days of overlapping balance were all fine and dandy until this occurrence at 4191.50. Now you may find such granular observations to be trivial but I assure you in my approach they are anything but.

They mean the difference between triggering longs or hand sitting.

This needs to be resolved, and it might happen just as soon as tonight. Starting with tonight’s sit in the futures, I am calling for an overnight drift lower towards the low of today. I laid out four bets as part of my Weekly Strategy Session-contextual bets on the direction of each major equity index. This context piece on the Nasdaq puts my bullish call on this instrument at risk.

Moving on, I sold and raised some cash all morning, and when I could no longer resist, though it might have been prudent to resist, I started a position in SUNE. It is trading right at my risk threshold and management is relatively easy for me at this juncture. If it opens lower tomorrow, I will be very busy elsewhere, laser focused on the Nasdaq. I don’t watch stocks on the open, they are too random for my liking. Then, at some point, I will sashay over to the SUNE ticker and see how it has fared through the noisy open. If it has decidedly turned lower, I will cut it, poof, go away silly acronym, you no longer please me.

Plan, execute, manage.

I have been on the sell side this morning, covering my YELP December calls for a loss, taking a small scale on TSLA and exiting WDAY. The goal coming into the week was to elevate cash slightly into an OPEX and FOMC kind of week.

Overall the Nasdaq is balanced, with 3 days over overlapping value. The bigger picture supports longs and I am patiently seeking entry into some new positions as the week matures.

I am still holding my SCOK, in case you were wondering.