The inaugural Raul3 Santos Weekly Strategy Session has been published.  Enjoy.

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Many traders were greeted with the old back door Chinese handshake afterhours when SCOK released a surprise earnings announcement.  I am caught long of the stock and am far too busy to become caught up in the trivial nature of afterhours trade.

I have more important matters to attend to, like hearing Option Addicts latest stock pitch.  The man has a knack for finding the big ones, and you can too. However, there’s another piece to trading that it seems many of you are behind the curve on.  I’m talking about a big and hairy elephant named context.  What if I told you I intend to offer a simple recipe, week in and out, for understanding broad market context?  If you appreciate direct calls on market bias, then you will love my iteration of the Weekly Strategy Session.  Won’t you stop by this weekend and have a look?

It felt like we were flung into this week head first and came out the other end better because of it.  If you are caught in this loser SCOK and find yourself frustrated with the surprise, let it serve as a reminder of what exactly we are dealing with when trading sub $5 Chinese stocks.  There is huge risk involved here, just like a triple levered ETF.  If you are unsure how to size a position in such a name, don’t hesitate to drop me a line.

Aside from this, the week was all about success.  There is excitement in the air and I can feel it.  Through it I will remain emotionally like a boulder and logically like river water.

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If you think they are simply going to allow you access to the fruits of laboring in the mines just by showing up for the win, then you have it all wrong my friend.  This is hard work, where men are forged in the furnaces of speculation.  While you sit comfortably at your desk wringing the sweat off your hat know this—you are nothing.  This is light work, why are you sweating so much?

Most of you fear a real day’s work.  I see it all the time.  It is nearly impossible to assemble a cement crew from my peers.  The only ones willing to work 16 hours in the summer heat are OG foreigners.  Even then there’s a 60% fail rate during initiation day.  They walk off, not even requesting pay for a days work.  If they do ask for money, I flip them a waded-up hundred from my pocket and tell them to, “Fuck off and leave the men to their work.”  Most of the time they hitch a ride to the job site which makes for an awkward pause before they walk off into the horizon.

I tell this all to you for one simple reason.  You need to wrap your head around trading and nothing more.  Your pasty hands can perform just as effectively as mine, but is your mind sharp?  It’s never too late to pick up a fine piece of literature or explore a philosophy.  I encourage both.

This SCOK position might lop off my unit and hand it to me.  That’s fine because I am the lizard king and will regrow another one trading god-only-knows what instrument.  This is risk and we rigorously plan for it, you should too.

The coal trade, all the energy trades, will be winners.  Elon will be a winner, I will be a winner, will you?

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Booked the GOGO trade, it was a standout before everything starting standing out NASDAQ style.  Swapped into some WDAY and JDST.

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Today is the day we have long awaited.  What we are seeing today began yesterday and with any luck it will continue into year end.  Yes, the indices surmounted great technical damage to return to annual highs in a matter of weeks.  Yes, oil prices cratered sending trillions of pennies into the virtual wallets of the US consumer.  Yes, the US dollar returned to supremacy.

But just this week, and really over the last two days, have we seen genuine pockets of strength in the market.  Suddenly, there is a bid for your favorite tech idea or brand.  Suddenly the best looking charts and paying you for sitting through their consolidations.  The stock picker is alive and well and calls 12631 home.

We are at the apex of greatness.  There is a buzz in the air, and people know there is serious coin to bank in the year-end dash.

Pile into longs?  No, but as I said, there will be opportunities.  Find you best setup, your favorite company, and wrap some risk into a trade.  Your wealth depends on you keeping a cool head.

A word of caution—do not start shooting anything that moves.  You do not need to shake every baby and kiss every hand.  You need only as many positions as you can comfortably track and manage according to your style.  The last thing you want is an error due to a broad wave of selling.  Your levels should be in place and they should be sacred to you.  Do not waffle.

The moves occurring today are the sprouts of what will soon grow into great sequoias.  Others will vanish in the next brush fire.  Knowing when to harvest and when to prune are skills just as important as where and when to plant.

There has been a bid under bid earning gap downs like TWTR, FEYE, GNRC, and GOGO.  They were gobbled up.  Does this look like participants are cowering in utilities and cash?  Follow the money flows.

My book is not overly concentrated in social media or tech like the past.  But it is my favorite.  Tech/social media tech longs include TWTR, CREE, GOGO, FEYE, TSLA, and YELP.  Retail plays are LULU and GPRO.  Winter play is GNRC.  A few other slow plays are in the book but why bore you?  Let’s talk about my SCOK, shall we?

It is not huge, but it is sufficient for the moves it is capable of.  The chart is a beauty of consolidation.  This is my junk, my republican, and my coal play all wrapped into one.

Hard working men and women are plotting to extract consistent coin from this market.  It is the only proper way to move forward.

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For the most part, I choose a healthy lifestyle.  But sometimes I cut loose and run with the devil on the dark side.  We guzzle excess amounts of libations while smoking and courting fast women.  We forego sleep and instead dance in the fires of hell and throw dice.

Once you hit the three day hump of being ‘on one’ your only hope at continuing is more.  Bloody Mary breakfasts, two martini liquid lunches, steak and cigar dinners, and road sodas for any and all treks.  It is the destructive path that often shortcuts one to the hobo lifestyle of witty cardboard signs demanding hooch and marijuana. However, much like any power move, when saved for the proper moment it can be effective for achieving a higher level of success and enjoyment.

However it would be vile to torture the vessel I call home longer than reasonable.  Thus when the music is over you must face the music—you have damaged your body and must repent to your liver, lungs, and brain.

First and foremost, and this should be ongoing during any bender, large doses of water, especially prior to any (if any) sleep cycles.  Upon returning to sobriety your water consumption should remain elevated to the point of requiring hourly urination.  Suspend said drinking 1.5-2 hours before sleep.  You should protect your sleep cycle as it is now sacred.  Plan to be in bed at least a half hour earlier than normal and allot time to decompress via mediation, love making, or reading fiction.  Upon waking your first task is to drink a glass of water.  Breakfast should be nutrient dense and consumed within 45 minutes of waking up.

If possible, split your lunch into two meals and keep them small.  Aim to add a fermented product to each meal.  Some options are kimchi, sauerkraut, and kombucha tea.  Limit dairy consumption to organic fat free milk, plain Greek yogurt, or kefir.  Caution—many kefir products are loaded with sugars which will slow down the healing process.  You should be sparing with deli cuts as well.  The sodium will leave you feeling bloated.

Significantly limit the amount of land-based animal protein you consume.  Opt for fish or bird meat whenever possible.  Vegetarians should be sure to up their legume and nut consumption.  Introduce dark leafy greens into at least two meals per day.  These can be vehicles for adding healthy fats like flax oil, grape seed oil, or fish oil.  You may also add acids to the leafs like lemon juice or vinegar.  Coffee consumption should also be consistent and before noon to prevent insomnia.  Coffee should drank black and accompanied with a glass of fresh squeezed grapefruit juice.

One shot of unfiltered apple cider vinegar to settle any upset stomachs and aid pH regulation.

As soon as the body feels ready introduce strenuous exercise, every other day or at least three times per week.  This will stimulate cell turnover and water consumption.

For goodness sake, do not smoke anything.  If you must use cannabis then either vaporize or via edibles.  Be sure to keep sugar free lozenges to stave off any dry mouth conditions which may lead to tooth decay.  Ideally you avoid this activity entirely.

It makes sense to keep a BCAA supplement handy, especially for any late night hunger fits.  Eating 1.5-2 hour prior to a sleep cycle should be avoided to prevent insomnia.

If you follow these steps you will be fit as a fiddle in one weeks time.  You might even want to continue on this path.

I offer these steps as I am in day two of all of them, and more.  In an interview, Paul Tutor Jones once said his mentor forced him to be in the best shape of his life before he could begin trading.  Who am I to think differently?  It makes sense to emulate those who have excelled in your desired profession.  Think of it as an investment in yourself and penance for your gluttonous sins.

You might want to consult a medical professional before undergoing this routine.  After all I am not a doctor, dammit, I am a trader.

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Since I was talking book yesterday on the headline, I will keep talking this position, added some at $17.80.  I also sold out of BLOX and bot CREE and GPRO.

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I must be stepping away from the market just as soon as the bell tolls to visit the local torture purveyor so let me impart you with some closing thoughts.  Bull runs tend to feel best near their climactic peak.  There are some names making big intraday moves today, they type of intraday moves we haven’t truly seen at any point during the V-shape bounce and subsequent floating island.  These days were the norm for months during the closing months of 2013 and into the beginning of 2014.  You would place out 6-10 out-of-the-money call option positions and two or three would make breathtaking gains.  Even during the quiet periods of this year this type of action never lasted long.

This v-shape bounce is/was of the largest magnitude I have every directly experienced.  It will carry aftershocks for weeks and months much like a proper earthquake.  After all, the epicenter of the move has origins in Japan.  Think about it.

You have to be expecting a pullback soon.  The $NYMO registered its highest reading on the year a few sessions back.  As much as it has been less effective at locating tops, it is food for thought.  This is no place to press your bets all in long.

At the same time, smaller position size and some select exposure is essential to my style of trading.  If individual charts brush off sideways/lower index prices in the weeks and months to come, then there will be spectacular gains left on the table from being completely sidelined.  Build a risk profile and have some exposure to the ‘greatest bull market ever’.

My position count will remain lower than historic times and my position sizes are smaller than normal.  But the trades will be managed with the same degree of execution.  Now is not the time to loosen your play.

It is always a pleasure to run the headline on the best financial site the internet has ever seen.  This weary traveler is grateful it was a slow grinder of a session.

Until tomorrow, I bid you adieu.

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Bought a starter position in GOGO, shorts are in a concentrated momo rout on a slow day. I also started a position in YELP.

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After missing a few sessions of active trading, here is how you rebuild your contextual feel.  Keep in mind, I blew into the dead lands of Detroit on a red eye flight only a few hours back.  A proper gent might enjoy their family Sunday before dismissing them to their favorite television series while he retires to his study to assess global financial matters.  However a tight deadline forces efficiency.

Thus you strip the nonsense and focus on the essentials that produce 80% output with 10-20% input.  Foremost, clean the filth of travel from your person.  Then a lean breakfast must be produced using a modern oven aka the microwave.  Three to four whole organic free range eggs in a Pyrex scrambled and mixed with a hearty salsa to create a lean southwestern energy source.  Next an oversize bowl of spinach also heated via microwave then doused with lemon juice, ground flax seed (this should already have been ground), and a dash of ghost pepper sea salt for flavor.

Now cleaned and nurtured, you need power sources of market information.  People who were not degenerates while you were who are still in touch with the market pulse.  ChessNwine’s Weekly Strategy Session is the best primer on the internet.  Perhaps introduce a small dose of caffeine to the body while enjoying the comprehensive recap.

Next peruse a detailed economic calendar.  The last thing you want is a scheduled economic event which carries an elevated likelihood to move the markets ‘surprising’ you.  The best calendars can be filtered for importance eliminating the need to scan 30-40 events.  There are only eight major economic announcements this week and two came from China overnight.  They produced no reaction on the Nasdaq.

A rifling through the last three or four blogs from consistent tier one sources makes sense, if only to see if a title grabs you.  You may choose to slide through a well built twitter stream as well (careful, this can be a shortcut to distractions).

If you attended the First Annual iBankCoin investor conference, a treasure trove of information, then you have an intimate understanding why earnings out of Walmart are more important than most government generated economic numbers.  Jeff Macke, a comported expert on the retail space, explained how much information can be gleaned about the consumer from this report as we head into the holiday shopping season.  Take heed to the market behavior ahead of Thursday’s open.

Finally a proper look at the most objective market information available must be conducted.  Recent price action and the structure of volume observed and objectively judged through the lenses of auction theory.

Put that mouse down and step back from your trading terminal unless you have given yourself a fair chance at understanding the market climate for the weather is cold and the dagger of winter and headed for your assets.

If you subscribe to the tenants of mindfulness this is also a splendid time to take some slow meditative breaths and focus on oneness or perhaps your god, whatever helps clear the mind to awaken to what truly matters.

 

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