iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,151 Blog Posts

The Double Decker

This one takes the chrome off a bumper (abrasive):

Friday price action was almost entirely contained within the range from Thursday.  The buyers managed to pierce the prior day highs with an unorthodox short squeeze into the close.  The very fact buyers were able to pull off such an aggressive feat suggests the sellers were fatigued going into the close last week after watching a stretched and gapped tape continue to defy gravity.  As impressive as the move was, the auction on Friday did manage to set value lower, moving value almost four handles lower to 1473.50.

I’ve highlighted my bias zone intraday in a lovely shade of blue.  This level is the confluence of the Thursday VPOC and Friday value area high.  It was also the scene of a swift V-shaped reaction this morning during the globex session.  It’s signaled its importance several times.  How the market treats this price level this week will be telling of the overall tenor of market participants.

Sellers will look to push us back below the Friday value area low which could lead to a swift back-and-fill of the gap left behind by Thursday’s gap higher.  The primary target for sellers is the VPOC from Wednesday with its high placement within the value area.  I expect to see buyers reacting at those levels.  Bulls have been eager this year to sweep up perceived bargains this year.  I remain constructive on my longs down to this level.  Below I will reconsider my intermediate-term stance.

Comments »

What Is Your Edge?

“Good tools stay sharp, hold an edge.” –Bob Flowerdew, The No Work Garden

After a very long day of toiling with my people, working on another lucrative project for the house of Raul3, I sat down to my Minority Report touchscreen laptop and immediately directed it to iBankCoin, naturally.  I love reviewing the new Best of iBankCoin weekly series.  Seeing my name listed beside people who for years I’ve held in the highest regard gives me a satisfaction beyond earning coin.  I read this site in silence for two years terrified to comment and look like a piker or worse yet receive banishment.

There is so much talent within these halls and when I see my top two posts providing very specific and actionable trades I feel like I’ve done my job.  But what is my job as a blogging trader?  I know my job as a trader.  As a trader my job is to buy and sell stocks, ETFs, futures, or options when I have an edge backed by probabilities.  It’s important for me to trade high win-rate situations because it keeps me confident.  A low win rate setup can be profitable if the winner outsizes the losses to a large enough degree, but I don’t know if I’ll be around for the winner.  And worse yet, the setup’s edge may have broken and it will be expensive for this to become clear.  I like high win rates and I’ve digressed.  What I need to understand is where my edge lies in blogging as a trader.

As I do with any situation, I first attempt to apply logic and dig into the data.  What gets read the most?  When do the most interactions (comments/retweets/etc.) occur?  I can say without a doubt my morning review of the S&P 500 market profile is a flop.  You guys are either too tired, too confused, or bored beyond words after reading those posts because you say NOTHING.   But I won’t give those up; they’re part of my trading edge.

What does work?

Talking about America –  TALKIN BOUT MERCA, shyit.  Talking about America positively or negatively gets people talking.  People love talking about America.  It’s like gossip hour at jezebel.com (puke) here at iBC.

Citing specific stocks in the blog title – Your time is precious, so is mine.  When you want actionable ideas you like to judge a headline by its title.  I can respect that.

That’s about all that works for me.  So I hone my skills in The PPT, putting Fly’s robot brain to work for me to dig up very specific stocks ready to make very specific amounts of money.  And I write about them.  Check out my two entries in this week’s Best of iBank Coin post.  They’re very specific.

Therefore my only edge in this blog game is being right on my trades.  I can’t seem to charm you with literary wit or commentary couth.  So I’ll continue to be right early and often.  Don’t hesitate to read along and tell your friends.

I’ll reiterate: I deal in high probability trades.  These are the tools my good friend Mr. Flowerdew referred to.

Comments »

New Do(ugh)nut Trend

I’ve sat idle today, watching my portfolio oscillate through 50 shades of green.  It’s currently settling into a modest forest green as MLNX wet blankets the advancement in chicken and donut stocks.  I’m stalking a few names into the close, but I’m not certain if I’ll pull the trigger.

Interesting trend of late in the foodie world is the donut connoisseur.  For them the doughnut (spelled in traditional long-form) is like a blank canvas.  It’s a vehicle for introducing tasty sensations from around the world to your palate.  Around here they crowd into bakeries Sunday morning clamoring over the newest delicatessens.  Then (and this part just drives me nuts) they eat the doughnuts with a fork and knife.  They fork and knife the whole thing like it’s a steak.  You can see them through the bakery windows, sitting at small round tables, sharing doughnut photos on Instagram then cutting the doughnut into fork sized pieces.  They eat maybe one and a half doughnuts.

It’s my opinion that all of this bodes well for DNKN as they ignore said trend and stick to banging out mass amounts of donuts and coffee for the working man.  The working man is serious and consumes no less than nine donuts whist guzzling down a canteen of coffee.  This is the crack that keeps our job sites humming.  They work hard until eleven in the morning.  Then they crash and feel guilt.  This feeling can only be cured with more donuts, more coffee.  DNKN keeps winning, forever and ever, amen.

Comments »

The Highlands

We saw an interesting session yesterday.  After gapping out of a multiday range and opening higher we immediately saw selling on the open.   The sellers drove price lower for the first half hour of trade and we had ourselves a weak morning gap being faded.  The buyers seemed to watch the morning activity play out and after letting the sellers bring price in they went back to work bidding up price.  They stayed active throughout the rest of the session.  It would only be ten handles higher when sellers were able to react and overpower the upward momentum.  We closed the session higher than the open and above the day’s midpoint.  Bulls won.

At this point the sellers have much work to do before regaining any semblance of control.  Given the progress higher, there is much room below for buyers to put in a higher low and remain in control.

For today’s session, I’m sticking with the bull and will be hesitant to cut names unless we lose yesterday’s value area low at 1474.  Keep in mind only my weakest would be cut below here.  Any new long trades would be trades only and mostly of the short squeeze variety.  I don’t intend to initiate any intermediate-term swings at these levels.

Top two picks going into today: PPC & DNKN (chicken & donuts)

Comments »

Big Index Gain: Stocks Stay the Same

More often than I would like to admit, I make a solid call on the direction but my stocks hardly participate.  Today was one of these days.  My stocks are up modestly.  The portfolio is green which is always good.  But considering I’m 75% long I would expect a bit more juice.  Every time this happens I’m reminded I need to finalize my alogs.  They’ve been on the backburner for months, simmering, thinking, waiting to wage war on the world’s futures markets.

For now we must continue to bank our coin trading these stocks.  With the markets levitating higher like this, I’ve been quick to take profits on extended names and toss the money at fresh ideas.  The rotation is great and keeps the portfolio humming along like a well oiled Ponzi scheme but eventually I want to settle into a few companies as investments, not just trading vehicles.  I like the Japan thesis Fly built.  It was odd when my good friend who does big business in Japan but never invests asked me if I knew anything about EWJ and if it held good companies.  He wants to get it.  Apparently they’re loving Abe over there.

Whether or not this is a peak I’m not certain but we are getting to a level where I like to lighten up.  The trough is where I like to do my business.  We had a nice trough the second week of 2013 and we did work here at the Raul3 blog.

I may lighten up my long exposure tomorrow.

Comments »

#MOARMODE

The gap higher this morning is yet to be faded and many stocks are playing along in the rising tide.  Given these conditions, I’m very hesitant to fight this tape by any means of hedging, raising cash, or shorting.

My style is to never fight the tape.  Quality volume or profile shape aside, if price is moving higher that is the final arbiter.  Price pays, nothing else.  I would not consider fading today or cutting small losses unless we see trade move back into yesterday’s value.  On the S&P you would look for trade below 1468 as your sign.

Until then, enjoy the levitation and consider buying some strength, Texas hedge style.

Comments »

We Can Work This Out

http://youtu.be/deghL8o0qHM

The buyers continue to show conviction, and with the powerful numbers out of Goldman, and Jamie Dimon taking a pay cut to save face for having degenerate traders in his ranks I can understand their conviction.  The financials are getting their act together.  And the semiconductors are seeing buyers rotation.

The characteristics of yesterday’s profile suggest shorts were put into a squeeze.  You can see the “P” shaped profile suggesting the rally higher yesterday was drive by old business like shorts buying to cover their position.  This also suggests that the rally struggled to encourage new participants to enter into the market.  Should that theme carry into today, we could expect the market to auction lower, filling in the lower half of yesterday’s profile.

The other scenario is a break higher.  As over extended as we are this is still a real possibility.  No need to get fancy trying to spot the rally, just look for price to take out yesterday’s value area high and how we behave as we approach the high of the day at 1469.

Comments »

EVERYTHING GOES HIGHER

What we are experiencing in the markets this year is extraordinary.  No amount of bad news can slow this market.  We’re about to make fresh highs.

Dump your weak and buy some STRENGTH.  Buy stocks that make people work harder (until at least noon) like DNKN.  You really don’t want to overthink a big move higher.  Simply find stocks you can define your risk in (using prior interesting levels or voodoo) and buy.  Then sit back and let the rising tide lift your boat.

There’s confidence in the banks.  That’s the cornerstone of capitalism.  It’s something we haven’t had for a few years.  Oh how well time can heal.

I highlighted the pump line this morning.  As I’ve done since the blogger network days, I put my money where my mouth (pen? keyboard?) is and took the bets.  Should we lose the pump line, many bets will come off and I will return to a more defensive position.

Actually even if we close strong I may dump some weak.  Why on earth are any of my stocks trading down?  Ridiculous!

Comments »

Major Action to Monitor Today

It’s all eyes on our banking overlords this morning as JP Morgan and Goldman Sachs report all the esoteric ways they fleeced us of coin last quarter.  They both crushed but the futures haven’t reacted.  I don’t know valuations or earnings metrics, but the technical picture on both names are running hot.  They’re running hot but they’re still pointing higher.  Go figure.  I suppose we will get the proverbial hand tip from both companies today.

An automated business is fantastic.  That is until something goes wrong and an inordinate amount of time must be spent “retooling” a situation.  Such was the case yesterday evening and as I result I’ve come into the morning having not done my evening research into trades for today.

When time is of the sweetest essence, I prepare most of my picks by poaching them from the generous folks here at iBankCoin.  You should too.

I like SD from RC’s 4 Wednesday Trade Ideas post.  It would pair well with my SU like a robust Bordeaux paired with ostrich.

I also like GPI from Redman59 over in the blogger network.

There was some talk yesterday in 12631 about ANR, I like it on strength.

UPDATE: DNKN looks good too

Digging further into apparel and retail given the strong consumer data yesterday (albeit normal given seasonality h/t Scott Bleier) I like that chart of PVH.  It’s near 52 week highs but is wanting higher.

Other thoughts:

I think people may still be afraid of FB today and perhaps the rest of the week.  Eventually, I’m going to add back to the name.  That is of course if an orderly pullback presents itself.

I’m hoping to not be sidelined on the banks too long but I have the feeling I won’t be jumping right back into GS until the earnings reaction plays out.

Comments »

Tight Bias Lines

It seems like the market was trying for lower yesterday but the pesky buyers were not having it.  The market gapped lower and a fresh batch of buyers stepped in and auctioned price higher all day.  Morning buyers had it easy.  They spent the morning targeting a gap fill and the afternoon featured a little dip after the FaceBook noise where eager side liners could grab the wave.  They were rewarded too as the index pushed to new highs before eventually settling near the value area high from Monday.

The profiles are overlapping, building potential energy.

That behavior into the close does signal resistance however.  Looking closely at the auction above 1466 yesterday we can glean insight.  Late day chasers, perhaps swing traders positioning for an overnight play were punished for their lack of discipline. Or it was a little short squeeze.  Either way, it created excess above and we closed within yesterday’s range.  That is why yesterday’s closing print at 1465.50 is our key resistance next time we go for a new pump.

The globex session has mostly glided lower, but Goldman just crushed estimates.  As of 8am 1460 has been support.  This level also is in confluence with the single TPO prints yesterday.  If this level can’t hold the market will begin exploring lower.

Comments »