There was not much you needed to actively do toady except avoid any urges to take action.  If you came into today long, your primary objective was to sit put while the Nasdaq slowly trended higher.  This is the holiday drift, a contextual environment unlike most with its calm demeanor and consistent appreciation.

If you managed to sit out the carnage earlier this year and instead wait for The PPT to give an all clear signal, then you could easily be up 15% on the year.  I was able to regain some losses, but still sit -19% on the year.

There is more than half a year left, and if I can diligently execute on only the solid opportunities in the marketplace then I can regain green by the end of the year.

I took a scale on the YELP calls I bought yesterday.  There was not much power on the late-day new high and we were trading up into my favorite moving average, the daily 33 exponential.  I will always take a scale at this spaghetti string.

Enjoy your holiday weekend and stop by the Raul blog if you want to study auction theory pertaining to opening swings.  This stuff has become super useful in guiding my morning trading and this week was no exception.  Stop by to see some of the opportunities I traded.

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The Nasdaq is trading a touch higher after a relatively quiet and balanced overnight session.  As we roll into the holiday weekend the economic docket is quiet, with only new home sales at 10 am and some markets closed for trade at 2pm.

Given the weekend context and the strong progress of the week, we may see some profit taking where sellers are more prevalent then they have been during the rest of the week.  Yesterday the buyers continued to show control on the short term where value migrated higher without any overlay of the prior day.  The action dried up a bit and as a result we printed an oddly shaped profile with almost two distributions.  We may see this area of low volume more thoroughly auctioned today:

The intermediate term is really attempting buyer control here, and I will say they are in control of the current swing, but it is just barely confined to the intermediate term balance.  We exceeded the prior high of the intermediate term balance yesterday by two points.  However another leg and sustained prices above yesterday’s high would be needed to establish a strong foothold of the intermediate term time frame by buyers.  I have noted a few other key upside levels as well as our two point range extension below:

Don’t lose sight of the big picture.  These are important prices we are trading:

Volume may be light today, so have well established price ranges and try not to get whacked by the day traders.

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These markets are faster and more deceptive than ever.  For every good idea I have, there are three bad.  Unless I can capitalize on the good by diligent execution, the bad will quickly outnumber me.  I do not care how well you play Halo or Call of Duty from your favorite spot on the map, when you are outnumbered even a gaggle of pwns can take you down.  Straight pwnage brah.  This is who you are trading against:

I have three call positions:

CREE, TSLA, and ANGI

That’s enough call options in my life.

I have three common stock trades:

AIXG, SCTY, and QQQ

That’s enough swing trades in my life

The rest of my book is bracket committed (invested) into TWTR, LO, and GRNH because I am a quality guy.

I added a new tool to my futures trading repertoire this week and it has been a tremendous help.  Loyal iBankCoin comrade and fellow Pelican DVK1970 introduced me to it, and it really feels like the piece I was missing to achieve consistent profitability.

Trading is going well, the stats are solid and I am avoiding the traps I normally fall into.  We shall see what the summer brings, but I look forward to picking this game back up and going live again.  If you are feeling too old for the market, step back for a moment.  I spent most of the early afternoon building out new infrastructure for my grape vines.  It was very relaxing and creating something tangible was rewarding to my soul.  Also, increase your exercise and cut out the booze for a while.  These are a few actions working for me.

Now I am off to till the soil and sow the land.

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I am having a mixed but mostly green day in the old trading portfolio.  The action is nothing like the flaming swords of earlier this year but much more palatable as I focus on some new strategies elsewhere.

My only move this morning was buying June calls in CREE.  I was chopped out of this name last week and decided to get back in and sit put.  My DDD is working as is the QQQ trade.  I am at a critical place with my AIXG trade which is down a quick 10%.  I can either add or cut or do nothing.  So far, I continue to look for buyers before acting.

We had a fast morning and we are grinding along, summer style.  Time favors the buyers on the intermediate term as it suggest these higher prices are gaining acceptance.  There was a battle down at the 3600 handle century mark.  Which side we of 3600 close these trading days will be my risk proxy this week.  Century marks matter and a flush below this level would swing the door open to blow through the bottom of consolidation.

I am keeping pace with this afternoon market, which is slow and steady.

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My swing trading is so very out of whack.  I have shrunk my position sizes for a bit, and gone back to some of my favorite trades.  In the meantime, I am satisfying my intraday desires in the futures.

I took but only a few actions today, buying some QQQ along with the illustrious Senor Tropicana and taking down a ½ position in DDD.  I traded DDD well up unto the point I made a callous decision to stop out my trade a few weeks back.  My own mind shook me out of the stock.  Therefore when rumors of a buyout swirled around this morning I simply bought back in.  I like this base forming and will be using it to define my risk.

I power stalked the QQQ Powershares and earned a cost basis on a 2/3 size long at $86.89.  For those keeping score is way below the midpoint of the day, nestled in the bottom quartile of the day.  This pleases me.  The later afternoon rally pressed value on the index higher which suggests we may see some higher prices into early next week.

I am interested in my old favorite CREE next week as the 30 minute is coiled tight and short interest is high enough to merit my attention.  Aside from that, I will do very little, instead readying my systems for some next level futures trading.

Check in this weekend for a complete look at some very effective Nasdaq opening swings and the opportunities to trade them.

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I have become pretty frustrated over the last few days, fighting the tape I suppose, by attempting long trades in the wildly unpopular high growth sectors.  One after another I am stopped out, and that is even more the case because I am playing tighter stops than I normally use.

It is time I shorten my timeframe and play some high quality intraday action.  Not the low quality stuff, not the boredom trades (guaranteed death), but only the finest setups back tested over 10 years of intraday data and refined and traded 1000s of times until the actions become nearly mechanical.

I am going back to my trusty old setup, the one that took me from piker to competent, the thrust-pullback-thrust.  Very potent, very simple, I will be exercising it on the broad Nasdaq because individual stocks keep cutting me up.  Over the course of the summer I will plan and rebuild some core intermediate term longs, but for now I need to regain my confidence in trading.  Trading, the single endeavor I enjoy more than almost anything in the world.

First thing first, an OCD clean and reassessment of my desk.  Second, some simulation for the duration of this month, and finally a plan of operating hours, intention, and how I will share my results with the fine people of the interweb.

It’s about to go down.  Insanity is doing the same thing and expecting different results.  I am right on the brink, as always.  Godspeed out there folks.

http://youtu.be/4wrfQMAyjeI

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I cannot say with any solid reasoning why I continue to attempt swing trades in the current environment.  I like swing trades because by their very nature they take time to play out allowing me to go about my day and perform other professional duties.  For some reason, my swing is off.  I feel like Rannulph Junuh over here, each time I step up to the tee.

There comes a time in your life where you have to take a hard look at your weaknesses and build blockades to protect yourself.  I need to stop buying momentum stocks based on my longer timeframe ideas because the longer timeframe is in balance.  That means churn and noise will stop me out of most of my positions, which is exactly what is happening.  Today I stopped out of Facebook, Google, Webio, and First Solar.  They took out my stops and the Nasdaq slid into a price zone I have no desire to lean against.  Here were are, the week nearly wrapped up and I am again on the wrong end of the p&l.

It is time to strategize elsewhere.  I am taking my business to the futures starting next month.  Until then, I will be in simulation and managing what swing positions and “investments” I have left.

Current book, which will undoubtedly sit idle if the market trades up and knife lower if the market trades flat-to-downward:

Cash 70%

TWTR 10%

LO 10%

AIXG 5%

CREE June $47.50 calls

GRNH small side bet

Dead May calls in ANGI and RGLD

I can manage the CREE position fairly easily as the 30 minute consolidates to a point.  If recent lows give way, I am out.  TWTR will likely knife lower and I will add to it.  LO is starting to worry me, especially after yesterday’s little flash crash.  I may cut it too.  AIXG needs to hold fourteen and a quarter or boot.

I am clearing my mind to start swinging at the futures.  I have fortified the action, knowledge, and devotion needed to take my futures trading back to live.  A bit more testing of all the moving parts in a simulated environment and then I will set forth on my quest to find my authentic methodology.

If I did not love this process so much, then I would pack up my bags and go back to busting concrete. It is time for the market to start paying me back.  Slowly, then all at once…just how I like it.

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I may have bought back in too early, but yesterday I felt too late and this morning I was busy canvassing the city.  When I returned to my trading dock I was impressed with how the Nasdaq was holding on to the upper extreme of price.  If you recall this morning’s discussion however, you know the big red candle could be lurking just around the corner.

Today sets up tomorrow being a big red candle, thus it would have been more prudent to wait and see tomorrow’s action before initiating some risk into the tape.  Yet I did not, instead I pressed some chips into Google, Webio, and First Solar.

Should tomorrow open weak, I have a plan.  Today’s profile was sort of saggy, suggesting there may be some downside action below.  However, I am not taking a hot spoon of hope and letting another knife drive through my torso, but instead picking a line in the sand.  That line, which is always grey, resides at 3595.  This level is multipronged important to the bull case and if it holds I will drop the hammer, again, for better or worse.  Here are some illustrations highlighting the importance of this level:

Now is not time to be a coward.  There is a perfect right shoulder forming, do you know what that means?  It means NOTHING! …until it does, but for now it is just a layer of expectation for the chart chomping class.  Know your risk.

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There may be a gigantic head and shoulder pattern forming on the Nasdaq composite, but in the meantime there is nothing wrong with being a champion on the long side.  We need to keep an objective perspective here.  Yes, there has been damage done to the my favorite hot money momentum stocks.  Indeed, I was on the receiving end of a correction one loser at a time.  But as Mr. Cain Thailer so eloquently stated, now is not the time to be cowering in the corner.  No, now is the time for the market to start paying interest on the money it took.

I have no reason to contemplate taking a short sale, yet here I was considering exactly this choice.  I watched a few of my favorite issues today, notably WB, and simply sat on my hands as lovely buy flow propelled them higher.  My largest position last week, three D, looks ready to pull the D’s out, if you know what I mean.  I am without my shares.  Should I cry about covering my DDD?  Or should I have been a buyer today with conviction?  The setup is still live.

Although I am relegated to my smallest long exposure of the year into what is shaping up to be a strong week, I can quickly steer my small boat into the riptide and ride out into glory.  I am picking my battles, very slowly.  A commenter suggested I may be overtrading.  I couldn’t agree more.  Therefore, I am taking a chill pill and watching this lovely intermediate term balance play out.

So far, buyers are holding the line.  Should they defend the next (if it even comes) wave of selling, longs could get very interesting fast.

Today felt like 2013.

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I have not taken any trades to start the week, instead opting to wait for a more clear intent from either the buyers or the sellers.  My positions are up today, led by Twitter which is being led around the on a leash through the news pump.  Upgrades and such, they type of news that benefits few but occurs on the regular.

Today would be a tough day to trade intraday unless your only move was to buy the open and hold on.  The gap-and-go scenario played out well this morning and up to this point we have printed a subtle trend day.  The biggest challenge for me is resisting the urge to short.  I feel like, as a down and out bull, I will rush too quickly into a short and then lose exponential confidence and precious capital when the market goes on a rip.

I am eyeballing NFLX for weakness but otherwise sitting put.  I am up a little over 1% on the day.

We are hanging out on top of my intermediate term balance.  No sign of sellers yet.

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