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

Stay Calm-Nothing Happened Yet

The markets are weakening into the bell and could get weaker, but we are still in balance.  A test lower to gauge buyers’ appetite would not surprise me and may be effective in shoring up the 09/11 gap a bit better.  Look at the volume profile below, we have an upper tail, but no lower tail, you dig?

Be patient:

ES_F_nothinghappened

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Stock Pickers Market and Deviating from The Trading Plan

For most of my tenure as a trader stocks have been treated like a singular asset class and thus tightly correlated to other macro instruments like bonds, the US dollar, gold, and oil.  The binary nature drove me to studying futures because if all stocks were hell-bent on moving as one, I might as well trade them all simultaneously with an ass load of leverage.

I love the futures markets.  They are pure order flow with no dependence on a company and their decisions.  But seeing good companies and more importantly good charts succeed even while the market chops around is exciting.

It makes me want to concentrate more funds into stock trading.

I got caught on the wrong side (the long side) of the quick drop this morning.  Even though I preach plan adherence, I deviated and had to take a ton of heat on my trade.  The poor entry, paired with a non-market related event which shall not be mentioned but which has officially created a rule, caused me to shake out of my long—I shit you not—one tick off the morning swing low (about 11am).  No less than five minutes later, what I had expected—a bit of a bounce to cut my loss into—occurred.

This was a huge setback to my futures trading, huge.  I am so sick of setbacks incurred from plan deviation.  They are huge drains on emotional capital.

I went and had some tacos with a friend.  We talked about hunting mushrooms and it was quite the stimulating conversation and helped clear my mind to assess everything.  Trading structure will be restored for tomorrow’s action and it is good to make these mistakes while trading small, believe me.

Focusing so much energy on work and trading futures allows me to think much more slowly about stocks.  The more I learn from the excellent traders and stock pickers here at iBankCoin the better this approach feels.  My book is up 2.5% today while the Big Board chops the UNCH.

RVLT is a big part of the green portfolio, but it is getting plenty of help from IMMR, MHR, YGE, BALT, and FB.  My account is straight crack rock and ripping.

I see a huge consolidation occurring, as if we are waiting for news flow to get this party started.  Bull or bear, a party is near—I can hear the bass rumbles in the distance.  Until this decision is clearly made, I will hold the line, 90% long.

My slow money is in AIXG, LO, RVLT, MJNA, FB, O, F, and CREE

My fast money is in AMBA, IMMR, MHR, YGE, BALT, RBCN, and CLF

I still hold a sharp edge in the futures market and my win/loss ratio shows it.  The p/l however does not yet because of setbacks.  This isn’t over until I win which is simply a matter of time, not if.  This week however, my stock gains are casting a bright glow on my futures losses.

Pro Tip:  Like any business, be sure you are sufficiently capitalized.  Better yet, have other revenue streams so this learning process doesn’t come with the added stress of keeping a roof over your head.

http://youtu.be/cJT1xvDOMB0

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FLASH: $RVLT Rolls Out One Hell of a Presentation

Revolution Lighting rolled out disclosed their presentation slides for the Craig-Hallum’s 4th Alpha Select Conference.  It is a bit wordy, but otherwise a solid presentation.

Check it out:

http://www.sec.gov/Archives/edgar/data/917523/000119312513379178/d603647dex991.htm

“LEDs, FTW”

FD: I am long in decent size and underwater.  I want more shares but my chart brain is making it a tricky endeavor.  Stupid chart brain…

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Coiling and Balancing

The /ES is working on coming into balance, and that process has continued overnight.  Overnight there were seven handles of range but it took place within yesterdays range.  Price was unable to take out prior day highs (or lows) as it auctioned through the night.  Instead we saw a quiet auction taking place within the confines of our lower distribution.

Early on we may see sellers working back into the market to close any overnight gap back down to 1686.25.  This level also marks the value area low set by both distributions yesterday.  If bulls want to effectively impede the sell flow, they can start by holding value and setting a higher low.

Overall my expectation is for continued choppiness which means we are in a trading environment conducive to intraday Bossram Alpha signals.  The key is patience and letting the market come to your target entry points—think Braveheart holding the line alongside his army.

I have highlighted a few scenarios and price levels of interest on the following market profile charts:

ES_MarketProfile_09262013

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Lunchtime Throwback

I put out a 12:30pm post summarizing and hypothesizing what the market was most likely to do.  Even though it was fly over the handlebars and smash your face wrong, it was incredibly useful.

When it did not happen, but instead we saw the market rejecting the Monday/Tuesday value, there was a subtle shift in the market place.  These are important.  The sooner they are recognized the better you can manage risk and adjust your intraday stance.

Hindsight being 20-20, I can clearly differentiate the moment when the shift occurred and split the profile for a better look, it happened between 12:30 to 1:30pm.  The market fell out of value, failed to re-enter leaving a low volume node at 1692.25, and made a sharp move lower.  A rejection! Take a look:

ES_MarketProfile_09252013_lunchthrowback

That changes expectation and as you can see above, we rotated back down through the value rapidly, found buyers just above the lows, then mustered a small bounce and eventually closed near the LOD.

We nearly printed a normal day—popularly seen near inflection points.  This is only a subtle piece of context to observe, and by no means a definitive swing low call.  We will revisit this profile in the morning.

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A Friendly Reminder That Everything You See Is Fake

Blocking out the news flow is difficult but the blissful ignorance that comes from it is worth the effort.  Remember if something is important, my well curated twitter stream will tell me.  Better yet, the professionals inhabiting the many rooms of iBankCoin will tell me.  Anything local will be filtered to me via family, colleagues, and friends.  This frees my mind to focus on order flow and sustaining and growing my revenues.

Some days however, often after eating too heavy of a lunch, my attention span degrades by the minute.  For that reason I mostly do not trade futures in the afternoon.  Instead I usually read, stare out the window, or look at Tina Fey nip slip pics.  Nip slips always get my a.d.d. all worked up.

Anyhow, today I closed green by 1.25% even though I was up a rock star 3% intraday.  I scaled off a bit of YGE.  I could afford to do so because I timed my entry perfectly. The market provided me 7% gains, you see, by the time we reached swing high.  I will book that bread any day of the week.  I now have a lower cost basis and as close to a risk free trade as you can get in the markets.

How about that AMBA?  I couldn’t be happier about tossing my Zillow shares in the dumpster to fund my AMBA purchase.  The old me would still be in Zillow. The dead fish action would result in me drawing faces on lemons with a sharpie and then tossing said lemons into my Blendtec emotionlessly.  The house would smell lovely as I died on the inside.

Zillow speaks to the selective nature of our market.  ChessNwine has been keeping this thought at the forefront of our trading mindset in his Weekly Strategy Sessions.  As a matter of fact, he brought my attention back to AMBA too.  I mean, it never left my watch list, and I am a total GoPro fanboy, but the reminder was a nudge on the shoulder if you will.

This AMBA trade has taken conviction.  I am glad to see mine coming back online.

Earlier I said this is all an appetizer, so you may be asking yourself, “What’s for dinner?”  Well my friends, LEDs are for dinner…and sloppy joes.  2013 is the year of the LED, they simply took the 3rd quarter off.  I have been financing these sleepy laggards with high level SHOMPPERY and 12631 magnificence, but it is high time they come online.  My top picks into the fourth quarter are CREE, RVLT, OESX, LYTS, RBCN, VECO, GTAT, and AIXG.

I like CREE the best as a company, RVLT the best as a young man’s speculative investment, and AIXG for their Germanic tribal nature.   I am long the trinity and will buy more of both after I spank a few more trades for stand up doubles.

I joined Le Doctour in BALT today.  I really just like the chart picture, you know me.  He does all the macro stuff.

Everyone is complaining about the way /ES traded today, but I had one of my better days.  When you have an idea of the context we are in, bobbing along the bottom with no conviction, you know to get the laser sight out and get damn good entries to allow you to get out before the things stalls and reverses.  We are learning over here and making a little bit of money while we do so.  From the high win rate comes larger position sizing and eventually scaling.  Then we make the big bucks.

Ah yes, I nearly forgot the point of this post—Everything you see is fake.  The dog and pony show in Washington over Obamacare and debt ceilings is all fake, jack ass es.  Do you really think any of this really matters, really?  I does not.  The terror threat elevation right at about 3:50pm?  Yes, fake.  Syria, real and sad, but so is every third world where cavemen kill each other for the best poppy fields.  Making noise about them is fake.  I have nightmares about a war on our land all the time because of these pundits and the terror threat bullshit. Even some nip slips are fake. I know, horrible times we live in..

Fear mongering from the glass half empty crowd is dangerous.  Avoid the losers who can’t drop it.

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This is Only the Appetizer

I stepped back from the turrets this morning, after nailing 4 winning trades in a row in the futures and seeing my book catapult higher.  If my calculations are correct, this market is heading higher into month end.

It is with this hypothesis and the invaluable data iBankCoin generates both in written commentary and mathematical precision that I am pressing my longs a bit harder than I traditionally have.  I found iBC when I was wrapping up my undergrad.  College had failed me by teaching me nothing about trading.  Then I came here, and it’s all trading all day—making money.  You will not find this type of service elsewhere on the internet.  Believe me.  I still hunt it out just like you.  I am still very much a student.

The indices are choppy but iBankCoin stocks are strong.  I need to wrap up this blog and get back into the /ES.

What has the /ES done?

It has rejected attempts to continue trending lower and trapped shorts in the hole, then rotated higher 10 handles.

What is the /ES trying to do?  It is trying to stabilize and balance out.  We see this as the formation of Gaussian distributions.

How good of a job is it doing?

Things are looking very Gaussian, very Gaussian indeed.

What are we likely to do from here?

Press through the large balance distribution I highlighted this morning and test 1697-1697.75.

Best of trading to you all.

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Clear Sentiment Emerges from The Fog

This morning took a bit of extra chart work to get the right context built.  I want to sum my thoughts very briefly before turning your attention to the following chart diagnostics for the S&P 500 and what they suggest about the sentiment of the overall market.

First I present a bar chart with some sentiment commentary.  You may recall this chart’s similarity to the frequently referenced Option Addict sentiment chart.  To my eyes we are working through discouragement, which is a buying opportunity as long as we do not blast through the lows:

ES_Sentiment_09252013

Next I present my usual daily profile analysis, both on the 24 hour profile and the RTH profile.  I like the RTH profile more for defining areas to do business, inflection points, etc.  I use the 24 hour chart to map out a few potential scenarios on the day.  I have only listed two scenarios of setting value in a balanced manner.  If we achieve the high or low of either scenario in short order, it opens the door for a third or fourth scenario of trending.  Keep that in mind when you observe the following market profile charts:

ES_MarketProfile_09252013

Finally, when I was working the above RTH charts, I found it very interesting that the volume point of control from Monday formed a rather extreme low volume node yesterday.  It is quite the contrasting treatment of 1695.50, yes?  So I merged the two profiles together and it gave me the right picture.  We have, in fact, balanced out:

ES_MarketProfile_0925b2013

Therefore we must closely observe how the market treats the VAH and VAL of this combined profile.  It will give us a clear picture of the buyer/sellers conviction and capacity to dictate the direction of the tape.  I am considering reducing long exposure if price is accepted (traded greater than ~1hr) below 1684, otherwise I see 1684 as a buying opportunity and any trading above these levels as peddle to the metal long.

 

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Market Mechanics Are Bound To Flush Out

I truly love immersing myself in the S&P auction.  Being the most liquid financial instrument in the world, it has a beautiful rhythm, much like your favorite surf spot or Costco grocery line.  We knew the market was out of balance when it melted like an ice cream cone last Friday—an ice cream cone we only managed to get a few licks of.  The market is still very much out of balance.

The mid-morning move higher had a screwed up flow, it just kept squeezing without any significant rotation lower.  This type of action weakens the floor once the market finally does start to rotate lower.  This is what we saw late in the afternoon.  Once the sell flow came into the market, there was a brief buyable dip and then you had to cut and run because there were no buyers below.  Locals who would normally fade moves were ran over by the morning move and called it a day.

The resulting profile footprint is oblong and without a clear point of control which makes sense, because we are still out of balance.  To my exhausted afternoon eye, the bears retained the driver’s seat into the close after nearly giving it up.

My only portfolio action on the day was to increase long exposure via buying a full size YGE position.  Aside from a nasty gap, this is a low risk entry point that is easy to manage.  All other longs are still in place.

RVLT is starting to show some fight after being some kind of methadone lemming for a month.

I was caught on the short side during the mid-morning pump and took a loss.  Everything was executed as planned so I have no complaints.  I was able to scalp a long in the afternoon which softened the hue of red on the day.  I live to fight another day.

I have taken 10 trades on the /6E so far this week, 6 winners 4 losers net profit of 0.0024 ticks.

I may sell down some longs into October to avert madness while I peruse decadence outside the markets.

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