You may notice I’ve slightly backed off the mouth foaming rhetoric about my bullishness in Tesla Motors.  While still my absolute favorite long-term investment, it’s now trading above intermediate term value.

Does that mean I will sell?

No.  Nah son, that’s a petty move.

But you need to understand a few basic tenents of technical analysis.  One is balance, also known as range.  Stocks spend the majority of their time in balance.  Identifying and plotting the territory is key to assessing whether your idea is ‘working’ and also when and where to take action.

If I were a more fickle Tesla investor, thank goodness I am not, then I would consider capturing some of the recent gains from sub-200 as we approach range high, see below:

The same method of trading can be applied to any instrument.  Buy range low, sell range high.  Eventually you’ll need risk parameters in place to get you out of the way when the break happens.  When the break happens, it will be explosive due to one ‘side’ of the tape being wrong.

For now, and despite political transition, an end to California’s drought, an acquisition of a solar company, and massive updates to the Autopilot feature, there has not been a shift in the perceived value of $TSLA equity.

Understand range trading, and you will be well on your way to better stock market decision making.

Tech Analysis 101

#STUDY

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Heed my caution, the circuitry powering the stock exchanges is designed to smell out stock traders like me and destroy them.

Thus, when you see my initiate my second stock trade of the year, your concern is warrented.

SEE ALSO: THE END IS NIGH: RAUL BUYS A STOCK

This go around I bought MNK.  This buy came after performing a top-down analysis last night using Exodus.  The study can be found by clicking here.

Same risk management applies: 10 day hold or -10% stop loss.  Godspeed.

 

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Several Exodus users are competent and operate the system to extract actionable stocks.  They also engage the macro timing algorithm like it is second nature.  Other members, mostly noobs, need to be shown the basics.

That is why they sent me.  I am the expert.  Please do not envision me like a savant—naturally gifted in the fields of software, stocked markets, and statistical analysis.  Running Exodus is not rocket science, though it was developed by a Space Alien Magician.  It is simple to operate. Let’s go top down and find actionable stocks right now, shall we?

Step 1: Decide The Relevant Time Frame

You need to think about how far into the past you want your data to go.  I want to see which sectors are outperforming since the start of earnings season, which was about 2-weeks ago.

BEHOLD: 2-WEEK SECTOR PERFORMANCE (save all applause until the end)

Nothing really stands out, nothing except the haymaker Basic Materials landed square on the scrotum of bearshitters.  Goodness, look at that thing.  Now comes my bias, and this is the part where I tailor the results for my needs, and why you need to become self sufficient at this simple form of analysis.  I do not want or need a Basic Materials stock in my portfolio.  So I will instead dig into the second best performer, our good friend Healthcare.

Step 2: Enter the Armory And Choose a Weapon

Armed with the sector intelligence we gathered above, we now head into The Grid.  The Grid is the biggest page inside Exodus and is loaded with tools you can use to hone in on winners.  The whole Sell in May thing has me cautious.  Therefore I am picking the Free Cash Flow model portfolio as my weapon.  It is loaded with fundamental filters by the Le Fly himself.  Great screen when you want to find companies whose operations were sound over a trailing 12-month period, in hopes their operations will continue to funnel cash into the company, thus fending off any liquidity issues should credit start to tighten.

I refuse to write out all the steps I take to soup up the Free Cash Flow screen to find actionable stocks.  If you are serious about using Exodus set up a 15-minute phone call with me by calling 800-863-7110, emailing [email protected], sending me a DM on Twitter @IndexModel, or ping me on SnapChat [VCali].  Exodus members can access the screen by clicking here.

However, for the unwashed, if you’ve stuck around with your hat out, bedraggled and smelling of cheese, waiting for PICKS, I have your picks.

BEHOLD: THE STOCKS GENERATED BY Exodus MARKET INTELLIGENCE  

From the list I like GMED the best, then MNK ::takes bow, basks in applause::

 

 

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The market is officially on day 1 of a bounce.  In 2016 markets, an upside move that lasts more than a few hours is an event to note.  Despite meticulous research over the weekend, I picked the slowest horse in the race–the Dow Jones, which is up a mere 20 basis points as we head into the close.

Last year I eliminated picking stocks to trade, opting instead to focus on futures trading and investing.  Now I am entertaining the idea of using Motif to go long all four indices when I want to take a position trade.

The best methods are the simplest.  Simplicity is durable.

The bounce is mature in bear market terms, but perhaps my lenses have been fogged by the harsh conditions and the bounce is still young and the Dow can rise to outperform the others.

You can see all my weekend research for free these next five days if you take us up on the free trials we are offering for Exodus.  Just sign up, no credit card required, then go inside and click the Strategy Session.  Here’s the trial link:

https://exodus.ibankcoin.com/free-trial

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We had some fun trading this stock last 4th quarter, it has hot seasonal stats PPT folks should check out, and the chart looks perf:

Don’t say I never gave you anything. This is as ideal a stock pick as you will find the the internet. Enjoy

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Perhaps….

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We discuss the sentiment cycle from time-to-time since Option Addict graced the idea upon us and I find value in envisioning where we are in the cycle.  It gives some perspective into how my comrades and competitors may be feeling at any given moment.

Unfortunately for RVLT longs, it appears we’re working through the rough side of the sentiment cycle.  If you love a business model, you sometimes have to ride through some crummy conditions while the business proves itself.

Therefore, I won’t candy coat what I think RVLT could do in the intermediate term, instead I’ve mapped out exactly how I envision it aka brutal, but eventually victorious.  Trade accordingly:

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Berlin is one of the most brilliant cities in the world.  The civil engineers were given the appropriated budgets and they produced magnificent methods of transportation.  Their parking garages are stunning pictures of modern design, their rails run on time, and their freeways, well everyone around the world envies the smooth autobahn.

And when you’ve engineered structural greatness you want lighting that’s equally breathtaking.  Lighting is the icing on the cake, it’s the makeup artist, and when using LEDs it’s an elegant leap into the future of visual stimuli.  Oh yeah, it uses 80 percent less energy than traditional HID lighting.  That too.

So when I see a strong Euro dollar, and a country like Germany that’s concerned with energy production and conservation I want a piece of the action.  What better way to get your piece of Germany than their premier LED company?  It’s traded here in the USA via AIXG.

Now it’s an ADR and trades lousy intraday, and yes, I’ve been in it forever and I’m hyping up my own book, but the move hasn’t happened yet, and I would be doing you a disservice to not bring this idea to your attention [again].

Here’s an updated chart and as I see it, it’s finally worked out of a consolidation formation, it’s resting on the 9ema, and ready to do work.

Full Disclosure:  I own many shares of AIXG.  If you buy AIXG because of this post, a panzer tank will come give you a lawn job, and you may lose money.

 

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I trade my worst when I feel chaotic.  I feel chaotic when I’m taking unplanned trades because I’m not trading with any structure.  I long ago accepted and embraced that much like an ocean, I cannot impose my will upon the market.  The market is the final arbiter.

There have been situations where unexpected news resulted in my losing money, like OCZ.  In that situation I felt an anxiety perhaps, more like a tension in my shoulders, and when I cut the loss I immediately felt a sense of relief.  Relief is a sensation, and sensations are one of the cornerstones of habits and habit formation.

Perhaps cutting CREE right here at this juncture would provide the same sensation of relief, but in this situation that would be a detriment to my long term goals.  Goals I’ve mapped and planned for prior to embracing this position.

Commenter AKwitdemBeamz commended my riding through a bludgeoning in CREE these last two days and likened me to Slim Pickens riding the nuke.  For those unfamiliar, he is referencing the most iconic scene from one of the most entertaining movies of all time, Dr. Strangelove.  As flattering as it is to be associated with such a feat of courageous greatness, my first thought was AKwitdemBeamz thinks I’m trading this position like a cowboy.

Shooting from the hip, if you will…

Everyone loves the big shootout scene in a western.  It’s usually the climax of a story and our hero cowboy, seemly outnumbered and certainly outgunned singlehandedly (or perhaps with the help of his faithful steed) dismantles the villains, restores order, and rides off into the sunset.  All this, mind you, happened against all odds.  That’s why we love it.  It’s seeing the low probability happen: the diving catch in the outfield, Jeb Corliss Grind The Crack, or the 65 yard field goal in overtime.  As breathtaking and impressive as it can be to watch these cowboys, you’re watching someone defy the laws of large numbers and probabilities.

I’m not a cowboy.  What I’m doing, right here right now with CREE is planned—god damned brooded upon while mopping floors.  Because when I have a plan, I don’t feel the chaos, and when I don’t feel chaos I trade my best.

I’m going to share my plan with you because I want this to go down as a nonevent, merely another blip in the trading timeline.  BEHOLD: The plan.  If it seems too simple then perhaps you’re too dense.  This is a weekly chart, this is an investment, but it’s always amorphous.  If conditions arise that suggest a retooling of the plan, such decisions will be made.  Typically the plan is reassessed when one of the following levels is traded:

“I ain’t no cowboy, gus”

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RVLT today announced they acquired Relume Lighting Technologies, a fine company in my neck of the woods.  I’m loving how they structured this deal, paying only $5 million and offering the remaining ten large in common stock.  They’re aligning goals by getting everyone vested in the share price.  And by acquiring Seesmart and Relume they’ve become a formidable competitor in the lighting grade LED space.

Shares are up modestly on the news, but I wish they were down.  I want a huge position in this name.  I have a current cost basis of $4.35 and about 8 percent of my portfolio invested.  I want to be 20 percent invested…a concentration of sorts only a madman would consider.  And I want to hold it for years, or until I feel the management is not executing.

Right now I love these guys.

Consider this my hype piece on RVLT.  I’m not going to pump this name, but I will be swinging it intermediate to long term.

The challenge here will be sitting on all the profits, watch.

No charts needed here.  I have GTC orders at $3.20 and $2.15.  Hook it up.

 

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