Boston College Basketball Team Infected by Chipotle E. Coli

Just like J.Mack said earlier, the burrito peddlers over at Chipotle cannot get a handle on this E. Coli epidemic.  Now it seems eight basketball players over at Boston College have contracted the intestinal funk after eating Mexi-bowls with a big-old dollop of guac.  Nasty, click here to read the full news release:

“there are 8 players on the team confirmed to have E.coli.”

Shares are down $17 bucks after hours after working off a gap down all session.

Shares of wearable fitness tracking device FitBit spiked higher today after a post from the Weight Watchers website indicates a possible connection between the two companies:

Pedometers measure the steps you take, while fitness devices are more sophisticated ‘accelerometers’, which means they can measure your body’s acceleration in three different directions (up and down, side to side, and front to back). By looking at your overall activity level, and not just specific activities, fitness devices give you a more accurate picture of the energy you’re using. You can sync the fitness device Fitbit to your Weight Watchers account.

FIT shares have done little since going public this summer, and IPO investors have grown tired of being a diluted via the common-practice secondary offering.  However, any exposure to the Oprah dynasty is certain to gain the attention of Wall Street investors.

If you want to read further into the potential Weight Watchers/Fitbit alliance, click here to read the Weight Watchers post.

NASDADQ futures are coming into the week flat after a Globex session featuring normal range and volume.  Price managed to hold the upper quadrant from Friday before briefly exceeding its high print of 4723.25.  The session was balanced overall.

The economic calendar is quiet this week, with Advance Retail Sales and U. of Michigan Confidence reads being the highest impact events.  Both are featured later this week.  Today we only have Labor Market Conditions at 10am.

Last week started out with a Monday drift lower.  Tuesday-Wednesday lunch price drifted higher, took out contract high, stalled, then Wednesday afternoon we sold hard.  That carried through to a trend day down Thursday which saw a late-day bounce.  Friday managed to completely reverse the trend day by pushing up for the entire session.

Heading into today my primary expectation is for buyers to work a move to take out overnight high 4730.  From there look for some churn at the 4737 level before we proceed up through contract high 4739.50.  Sellers no show and we continue exploring higher prices but ultimately stall out below 4767.25 and two way trade ensues.

Hypo 2 sellers push down through overnight low 4702.50 and discover responsive buyers around the 4700 century mark.  Two way trade ensues with buyers targeting 4731.

Hypo 3 sellers accelerate down though 4700 setting up a move to target 4682.25.

Hypo 4 liquidation takes hold, after some churn near 4682.25 sellers push an initiative leg down to 4652.75.

Levels:

Perceptions shift fast.  Where a high resolution picture of a Chipotle Mexi-bowl would once produce savory senses, it now drums up horrific imagery of intestinal damage.  Apparently, I am not the only one.

The company reported Friday that the recent e. Coli incident is having an adverse impact on their 4th quarter operating results.  That’s not good, because as soon as this quarterly revenue chart stops its perfect ascent everyone has to call that lofty CMG valuation into question:

DATA SOURCE: Exodus MARKET INTELLIGENCE

We know momentum cuts both ways. It is simply the nature of selling that makes the downside come a bit faster. This is not really a trade opportunity anymore. It was last week.

Great news: I was being a cheapskate, fussing over dimes, and never filled on my position. On to the next.

Despite a light economic calendar this upcoming week, I am expecting some speed after Wednesday.  On Thursday most active index future traders will be rolling forward to the March 2016 contract.  After that date, and until the December contract expires (12/18) volume metrics go haywire.  You also see big block trades pushing through that are simply institutions moving their position to the new front month contract, aka ‘rolling forward’.

I take less trades during this time, if any at all.  Last roll forward I managed to get my systems dialed in early Thursday and catch some nice setups.  Perhaps this week will be the same.  Either way from Friday until next Thursday I expect to see shenanigans aka big ticks, head fake moves (which are already underway apparently), and huge-meaningless volume transactions.

Fortunately, I have some useful context to cue off of this week that is not susceptible to roll forward powers.  Exodus members, you know what I am talking about, or at least you can, if you check out this week’s Exodus Strategy Session. I just published it, go check it out.

About this time yesterday I had written off 2015.  I booked some longs and went to the gym with a -100 NASDAQ bar imprinted on my brain.  Every time I did my max rep I would see the red candle, in all of its horrific glory.  After lifting heavy objects for two hours, my concerns eased.

All seemed well after hours, like the whole day session was a delusion of sorts.  The volatility, it seemed, had vanished.  Then we had a super normal morning; there was literally nothing abnormal about it.  The NFP 3rd reaction analysis yeilded a strong buy and hot damn we climbed the liquidation pole with great tenacity.  All those NASDAQs that vanished in a flash were replaced just as rapidly.  Money managers smashed the risk on button with the flesh of their palm in unison.

This is why I have segued a good chunk of my funds into The Fly’s GARP.  Its passive, and this lack of action means I do not screw up (everything) when I throw out my positions into a 100 point hole.

I have my reasons.  The selling was not just some knee-jerk reaction.  The failed auction in the NASDAQ very much happened and very well can disrupt the rest of the trading year.  But you know what?  Selling yesterday afternoon was wrong, wrong, wrong.

I am trying to find my way into Paypal shares.  The online merchant allows users to transact in bitcoin, which intrigues me.

Bitcoin is worth about $350 right now, and anyone with this super currency has plenty of ways to convert it into goods and services.  These video game bux are a very real form of payment.

The stock had a nice push from the $35 handle today. If we get a check back to this region I am going to be there, bidding the long.  Risk to the double low at $33.85.

Aside from outright bitcoin ownership, I think this is one the best ways to expose some investment risk to the bitcoin empire.

NADAQ futures are priced to gap up heading into Friday.  The overnight session featured a normal range on slightly elevated volume.  Price pushed up into the Thursday liquidation but stalled below the midpoint of yesterday’s big range.  At 8:30am Non-farm payroll data came out stronger than expected while the unemployment rate remained unchanged at 5%.

The only other economic event scheduled today is the Baker Hughes rig count at 1pm.

Yesterday we printed a double distribution trend day down.  This day type has the second highest amount of directional conviction.  The selling accelerated heading into the lunch hour and pressed deep into the 11/18 range before buyers stepped in.  The day ended on a bounce.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4611.25.  Sellers continue to take out overnight low 4609.75.  Look for responsive buyers at the 4600 century mark and two way trade to ensue below 4625.

Hypo 2 sellers push hard, down throgh 4600 and target 4586.75.  Look for buyers here who are overrun as sellers target the open gap down at 4570.25.

Hypo 3 buyers sustain trade above 4615 setting up a move to take out overnight high 4635.75.  Look for responsive sellers to defend their liquidation at 4643.

Hypo 4 a pole climb.  Buyers push up through 4643, sustain trade above it, and set up a pole climb up to 4676.75.

Levels:

If we head south this month, Chipotle is my horse for the ride.  They have the disgusting E. Coli funk all over their restaurants.

Seasonality-wise, now is when I am most likely to rely on fast causal foods.  It is like putting up Christmas decorations to beat back the depression, it satisfies my impulses.  This year, I would rather eat my shoe than a hot bowl of Mexi-American E. Coli.  My stomach has enough issues, what with the relatives and their homemade cakes.

I guess what I am saying is, as a company, this is not the time to screw up.  This is when you execute like a boss and reap the blessings.  If not I have no sympathy for you.  Maybe next year, Chipotle.

Normally I short the whole biotech industry when my bias skews bear.  And I probably will again–but I am also going to be stalking shorts in CMG.

This is pretty much exactly how you did not want to see today play out if you are a bull.  The NASDAQ went to contract high, puttered out and stalled, and is now nose diving lower.  This is what I was cautioning of yesterday.

I have seen swing-sized failed auctions set up days weeks of downward/violent chop-type price action.

Might as well call it a year, bulls, and come back in January.

UPDATE: The PHLX Semiconductor index, after weeks of strength, is printing an ugly outside day after making new swing high:

If you like this kind of analysis, follow me on Twitter:

I'm not fading this one, it's all you guys. I'll wait until someone pushes the risk on button again. This is as nasty as it gets

— Raul (@IndexModel) December 2, 2015