iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,121 Blog Posts

Drifting Above Naked Prints

The equity futures experienced a slight drift lower overnight, as the globex timeframe continues to show a slight edge to the sellers this week.  Sellers put in a lower high overnight on the NASDAQ composite at 3678.50 which is the VPOC from yesterday’s short squeeze profile.

This lends a bit of support to the idea that the buyer strength we experienced yesterday may have been a temporary force, and sellers may assert themselves again today.  The short squeeze profile, or P-shape profile is much more pungent and actionable when printed during an uptrend.  It usually occurs at or near the end of a thrust higher before the marketplace resumes its downward trend.  Today, we are trending higher, thus it reduces the significance of the print slightly.

The prices below have seen thorough auction, but I still think price tests lower to verify if buyers still have the same level of conviction below.  Today is the third day I will highlight the naked VPOC we printed on 02/13 at 3651.  These tend to get cleared up (tested) eventually, even if we are to continue higher.  I also continue to highlight the VERY low volume node at 3635.25.   If this level is breached, we may see rapid acceleration downward, liquidation-type trading.

I have highlighted these levels, and a few other observations on the following market profile chart:

NQ__MarketProfile_021192014

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This Has Gone on Long Enough

Today was not necessary, but it is exactly what the stock market does.  When sentiment gets out of whack, either way, the market place corrects the imbalance very naturally.  When it’s all said and done, the sane walk away with a few pesos in their pockets, scratching their head at the mysterious and random acts of violence the market exhibits.

We crazy folk make a month’s pay in 2 hours.

I was mostly selling today, salvaging some the February premium I laid out.  Other bits still fly their pride flag, like FSLR and SCTY, monsters marching together in solidarity.

I finally scaled down to a TSLA earning’s runner.  I think it can keep squeezing ahead of earnings, given the float, but I am not being too greedy.  I booked my 52% gain and left a small piece to keep earnings interesting.

GRPN reporting Thursday afternoon presents a rather unique situation, does it not?  Given the weakness in the name, opex, and the potential for a lovely little lottery trade.  Anyone who is more versed in options that is willing to chime in on this idea please do so, I am all [green] ears.

I bought FIO amidst much fanfare and strength.  It farted and everyone laughed, and now it only smells and everyone walked away.  I am stuck with stinky, hoping for an encore.

I closed my GS calls, it felt like a shake out.

I closed my February Z calls and salvaged a bit of premium.  I still have March calls but this ugly chart may take more than a week to resolve.

I am back to about 10% cash here at the end of the day, after being a tad longer into the weekend.

Top pick into March is CREE.

Elroi is still stuck in the lab.  I can’t wait to see if all this CPU usage will be reflected in my electric bill.  Regardless, when he comes back, it will be with one of those little green hats with a helicopter blade on top used to chop up other algo onslaughts.

http://youtu.be/yuR1rVVf358

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The LED Trade Is About To Get Legs

Speaking from an entirely unbiased position, I can tell you with unbridled certainty that the LED trade is about to be a huge mover for the remainder of Q1.

If you have read along over the years, you know I am bullish lighting grade LEDs on a macro level.  I see the opportunity to invest in a green technology as well aligned with the agenda of our current administration and a technology that is finally where it needs to be to allow enterprising folks to bring it to market.  Corporations have lots of cash on the balance sheets, and stock buybacks are only as effective as your last, and going green is cool—especially when it reduces operating costs in a meaningful way.

There has been lots of weakness in these stocks for months.  I have ridden out the entire consolidation from a position of power, a position accomplished by getting large in 2012.

My holdings in RVLT, CREE, LEDS, and OESX have eclipsed all prior exposure levels right here right now.  And I am in no hurry to sell.  It is time to sit back and let the trade work, slowly.

Full Disclosure: I hold a basket of LED stocks.  This is a concentrated, high risk position.  I may lose money.  If you buy any of these stocks because of this post, you may lose money.

http://youtu.be/tKi9Z-f6qX4

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Sellers Presenting Themselves

The NASDAQ futures went for a bit of a ride, trading 18.5 handles worth of range while we celebrate Presidents Day.  The futures were working lower this morning until eventually reaching some oversold conditions.  At this point a bit of responsive buying entered and sparked a squeeze.  This action resulted in us first breaking down from the uppermost profile distribution to now retesting that uppermost distributions value area low.

The question now becomes, do the sellers continue to assert their control of the short (overnight/day) timeframe by rejecting a move back into upper value, or do we see the intermediate term long waking up and making things a little less clear for the auction?

The long term timeframe is still nestled in the controlling hand of buyers.  Intermediate term, we continue seeing value migrate up with little in the way of a pullback.  The rally is becoming a bit aged, but one would be taking a difficult trade to attempt fading it before seeing sellers retain their early control.

NQ__MarketProfile_021182014

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Building Value Via The Auction Process

After last Thursday’s strong trend, the market spent time coming to terms with the new index pricing by auctioning.  This process began Thursday afternoon and by Friday afternoon the consensus was to explore a bit higher for value.  Thus the intermediate term timeframe continued to press on for the buyer.

The long term timeframe is back into the steady hands of the bull camp.  This can be seen on a daily or weekly chart of the NASDAQ composite.  Overnight, prices have rotated a bit higher, in a drift of sorts.

The logical trade early on then, would be to press into that overnight inventory of longs, and see if lower prices can motivate selling/liquidation.  I have highlighted the relevant price levels that developed in a rather large and organized distribution atop our trend.  I will be keying off these levels, should they be tested, to gauge buyer confidence and response.  These levels and more can be seen below on the following market profile chart:

NQ__MarketProfile_021172014

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You Are Not Doing It Right

I love when people misuse a technology to the point of frustration until they criticize it as being broken or even stupid.  The results can be significantly more amusing when the technology is mechanical, like hands free faucet, because you get a very tangible experience of human failure.  I long ago swallowed the pill and accepted that we are servants to our technology unless we reach the status of robot overlord.  Once robot overlord status is achieved, one becomes something much more powerful—a small cog in the process, the invisible ghost who directs the technology with symphonic harmony.  This should result in my success in breaking the traditional 30 year work mold and liberating my time to explore other life interests.

Anyhow, I was frustrated with my computer processing power all week and trading naked and without robots.  The reason was a new bit of trading logic which I bolted together and unleashed on 2.5 years of data for backtesting/optimization purposes.  After 94 hours of peaked i7 quad-core processing I was delivered the output, which looked like this:

000000000000000000 00000000 0000000000000000000000000 0 0 0 000000000000000000 0 00000 0000000000000 0      0000000000000000000       0000000000000 0 0 00000000000000 0 000000000

I did it wrong.

And in that moment, rather this entire last week, I learned a lesson about coding logic and testing and life in general.  Before you strap on a jet pack and attempt to cross the Grand Canyon, go hop the drainage ditch in your back yard.  You can work the kinks out much quicker and safer.

I worked out the kinks and tested the logic on 20 days of data to make sure it was working correctly.  Now I am back in the lab, peaking out the processors.  This time, with a bit more thought and proper use of the technology, I can test out 2.5 years of data in 56 minutes.  LOL

Failing is learning, but if you want to shorten the learning curve, spend a few minutes talking with someone who has expended their life years already failing in the same field.

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Boris Get The Rifle

I had a pretty basic week in most aspects, earning a small stipend from the market for taking aggressive blows one after the next.  It has been an aggressive playing field, I can assure you.

Elroi has been in the shop all week.  I started an optimization study on Monday evening, not fully realizing it would take over 90 hours to complete.  Once it was two hours into the work, I figured I had gone too far like when you get to the end of your driveway without your cellphone and to, “let the computers work”.  Needless to say, I have been trading without my helper robots all week and I am not too pleased with the results.  You have no idea the edge you form, until you have traded alongside some algos forged from your own eye-blood, sweat, and tears.

I hope to have these new mods strapped on over the weekend.

I have a big book of call options set to expire next Friday.  Most of this premium will likely evaporate, but with a bit of mojo I just may salvage a few pesos:

ANGI 17.50

FSLR 55 & 60

ACAD 26

AAPL 560

GRPN 12

LULU 52.50

GS 165

Z 85 ( I have some March 90 too)

SCTY 77.50

OWW 7.50

To be quite frank, to hell with any evaporated premium at this point, they have already bled out and I have already fought viscously to re-earn the risk capital in other venues, like this EXK trade I am smashing.

Of course, none of this really matters, because all I want right now is to get on with my Valentine Day escapades.  If you are holed up in the arctic north with no sweet woma[e]n to spend time with tonight, occupy that time productively by reading through my market profile archives.

Have a good one.

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THEY ARE OUT TO GET ME

I am feeling the sweat of 1000 eyeballs today while holding onto my harness as the Zill-o-coaster plunges lower.  Just yesterday, I was on top of the world with this trade.  I sold before earnings.  I bought the blood after earnings.  The chart looked ACE HOOD.   I generated a Spencer Rascoff meme, complimenting myself.  It seemed I would surely crush the shorts into month-end.

Nah, Trulia happened.  Unreal, these jokers, are the catalyst for a gut wrenching selloff.  Perhaps I should have just cut my small loss and moved on.  Then maybe I wouldn’t feel like there is someone reading my posts who decided today was the day to correct me.  However I did just the opposite, and bought MOAR Zillow, MOAR!

Since then the stock has triggered a circuit breaker.  The markets are rallying to all-time highs and I am engaged in a bitter fight with a concentrated pack of pissed off bears.  Sometimes, you have to pick your battles wisely.  This may not be the best place for me to make my stand.  Instead I should be dabbling in the nefarious world of OTC penny pot stocks, perhaps.  Oh, wait, I am doing that too.

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Who Do You Think You Are?

Zillow_CEO_

They’re trying to muscle the Zillow shares around and scare people out ahead of a sold quarter.  I wanted to buy more yesterday but held off, expecting this type of noise.  Today I was not so patient.  I bought more Zillow blood.

More Later.

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The Day After A Trend Day – Valentine’s Day

The equity futures markets were balanced overnight, however rather opportunistic given the large range and impressive volumes.  The actual auction that took place overnight was very organized and saw good participation from both the buyers and sellers who both seem to be willing to participate at these levels.  This suggests we are coming into balance.

However, there was no definitive point of value reached, as the resulting volume profile suggests a slight imbalance exists via the lack of a smooth, bell-shaped curvature.  Instead the profile shows a slight imbalance to the upside.  I have highlighted this imbalance as well as a few key price points and scenarios on the following market profile chart:

NQ__MarketProfile_02142014

Yesterday was interesting and the morning vision work paid off in spades.  Inside 12631, I was taking through the profile development.  Within the first half hour of trade my entire upside scenario had been captured by a strong opening drive. This was OTF (other time frame) action, or the long term timeframe asserting itself on the marketplace.  OTF shows no regard for support and resistance levels seen on the daily and even intermediate term profiles, instead opting to plow money into the marketplace.  It did not take long to recognize the trend day activity and grab on and ride it until the wheels come off.

The NASDAQ seemed to play catch up yesterday, however, while the S&P put in a milder trend, almost static enough to challenge the trend day structure.  I will be watching the S&P today, to see if it can show strength.  Thus far in the AM, it has been diverging from the NASDAQ.  I have highlighted this divergence on the following market profile chart of the ES future:

ES_MarketProfile_02142014

 

Also, have a Happy Valentine’s day.  Be extra gay and sappy with your special someone.  But don’t forget about the industrial production numbers at 9:15am and consumer sentiment at 9:55am.  Carry on.

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