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

#LEDEmpire

You knew it was bound to happen.  You knew CREE cannot spelunk after ever single earnings announcement, right?  To be honest (and we keep it honest in the humble world of Raul) my feet were chilly to the thought yesterday too.  I went into earnings only half sized.  Do you know where I was most certainly not reducing LED exposure?

In LEDS, in RVLT…the “party rock”

I floated some statistics about CREE stock behavior during and after their earning’s announcement on the pelican stream.  They were rather interesting, really.  They are free, too, in case you are wondering.  CREE only trades higher 44% of the time after an earnings announcement BUT the session after an earnings announcement closes higher than the open 77% of the time.  Hence, therefore, thus…one does not simply trust CREE through earnings.

cree_odns

Quite the contrary, you instead hunt an entry the next day.  I bought CREE after it gap filled down and was trading BELOW where it opened today.  The deck was stacked for your boy Raul.  I made it a full size position, market order like a glut, and the rest is history.  They I bought OESX at the low of the day.

Do you see what I did here?  I completely pwned the LED trade, live on the interwebs.  I am not exactly dancing the tapioca over here yet.  My book is 25% concentrated into the LED industry as of the bell.  A concentration some of you may perhaps deem mad.

Let me ‘splain something else to you.  SINZO ABE will not be instigating any wars in the Far East.  He took center stage at Davos proclaiming these words.  He instead intends to lead an industrious nation and keep his battles economic in variety.  This is very good news for the LEDs we love because most of their tiny components are assembled the laborious hands of China men and women.

Thus I am pressing the envelope with my LED exposure, and I intend do so until I see the whites of Thomas Edison’s eyes—live from the land of the dead.  That last sentence makes no sense whatsoever.  I possess the will of a madman is what I am trying to convey.  Just be aware.

I have lots of other risk, side bets if you will, companies whose goals are all centered upon intelligent humans making more intelligent decisions.   I could go on, but I have already said too much.

Take time to enjoy the traditional lighting around you if this is something you hold dear, for soon it will be only a small piece of your nostalgic pie.

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Carving Out The Bullish Case

One of the subtle cues the market gave us yesterday during the selloff was the divergence between the NASDAQ and the S&P.  As prices in the S&P made lower lows verses Friday trade, the NASDAQ diverged.  This is a risk divergence and was the first catalyst to take out your shopping list and build some risk.

Sellers were able to sustain control in the S&P on the net session by extending the initial balance lower, taking out prior day lows, printing a lower high/lower low, and pushing value slightly lower.

The NASDAQ was not as clear in regard to control.  Sellers extended the initial balance lower but never took out Friday lows.  We printed a higher high /higher low and value moved to its highest level this year.

Turning our attention to the NASDAQ, overnight prices went to new swing highs at 3621 before finding sellers.  Since then price has bounced around a bit in a relatively balanced manner with a bit of a buying wick up top.  This gives us two bits of sentiment.  First, swing highs are rarely made outside of regular market hours, thus the overnight high is vulnerable.  Second, the overnight inventory is net long, thus we may see some sell flow early on.

We are trading slightly above yesterday’s close which presents a potential gap fill trade back to 3609.50.

Overnight control, buyers

Yesterday control, buyers

Intermediate term control, buyers

Long timeframe control, buyers

I have highlighted a few upside targets, as well as levels of support I will be watching on the following volume profile chart:

NQ_MarketProfile_01222014

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MEGA BOOK

My book has swollen into something of an autonomous beast.

Price action is coiled up upon the daily VPOC as we enter the final few minutes of trade.  Buyers again presented themselves to a dip opportunity, snatching shares of their favorite stocks and dipping rather carelessly.

I have accumulated a book of options over the last 5 or 6 trading days.  Aka, I am building a book of long exposure on top of a mountain of uncertainty.  I know it sounds bananas, but every red cent I have invested into option premium could evaporate and I would still be where I started the year.  Aka, I am working with the houses money (famous last words).  Here is my option exposure, all calls:

ANGI Feb $17.50

Z Feb $95

FSLR Feb $60

ACAD Feb $26

AMZN Jan Weekly $410

TRLA $40

GRPN Feb $12

LULU Feb $52.50

FB Feb $57.50

That, my friends, is some straight crack rock.  No chaser.

I also have some low priced crank:

LEDS, RVLT, MCP, YGE, LITB, and now PHOT

Finally, there are my common stock positions:

TSLA, Z, SINA, CREE, TWTR, FSLR, GOGO, LO, LITB, and BALT

I may seem overexposed here but I still have 25% cash.  I feel like all hell could break loose and I could trade my way out of it with all this cashish.  The kicker of it is, I do not need to put huge option positions on to achieve the returns I desire.  Instead I just wager a modest 1% of my book, sometimes less.

This is an experiment of sorts, happening live for the fine readers of iBankCoin.

Elroi is hard at work too, working off his rough start.  Check out the latest stats, he crushed the holiday trade and today’s action:

Elrio_01212014

I golf clap Elroi, may he continue to dig out from his early hole.  That’s all I have for you at the moment.  I am cutting out early.  Hopefully you guys do not break anything. I will be listening to the CREE call from my motorola car phone.

Be well

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RAUL BUY $AMZN

I bought the AMZN 410 weekly calls.

 

Don’t be like me unless you can stomach a fist down your throat, and perhaps loose [sic] money

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Fresh Context to Guide Traders Through The Short Week

Strength rolled into equity futures overnight after a mild and choppy globex session cruised through Sunday evening and MLK.  When the markets opened at 7pm last night they were met with buy flow which pressed prices above Friday highs before finding sellers.  Turning attention to the NASDAQ futures, the marketplace found sellers at 3609, which was the overnight high last Friday and is 1.25 points below our current swing high at 3610.25.

Friday printed a neutral session which features range extension on both sides of the initial balance.  It suggests indecision.  The late afternoon selloff makes sense, as option expiration occurred and speculators perhaps reduced risk into the long holiday weekend.

However, their profit taking was met with aggressive buying of the reactive variety which made it clear demand exists for NASDAQ exposure (and S&P).  The afternoon selloff was effective in shoring up the wide open gap left behind last week Wednesday, and price stopped just a tick above the naked VPOC at 3574.  Any trade sustained above this level keeps us outside of intermediate term balance, and increases the propensity for a large move.—either a harsh rejection of higher prices, or a discovery exploration higher where the market seeks to locate new balance.

My primary expectation is for some selling to come in early on and work the overnight inventory lower to close the gap down to 3586.  Should we instead see buyers driving off the open, I have upside targets of 3610.25 (swing high), 3612.25, 3616.75, 3620.50, and 3622.50.  In essence, there are many algorithmic buy stop targets above.  They may either trigger a temporary short squeeze, or be the catalyst to our next let higher.

There are no major economic releases today.  We are set to open in range, but outside of value.  This is an elevated risk/reward environment intraday.

Note: On the S&P futures via the /ES, I am looking for sustained trade above 1844.50 to signal a shift from intermediate term balance to long timeframe control.

I have highlighted levels I find important on the following market profile chart:

 

NQ_Volumeprofile_01212041

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Obey Your Robot Overlords

The futures market is back open and ripping.  Your history books told you the day after MLK is caustic for traders, yet prices press higher.

I about fell out of my chair when I came back to my charts this morning and feasted my eyes upon the 30 minute profiles.  Where was I in the last hour of trade Friday?  I was pulling auditors out of my rectal cavity.  The neutral print occurred—my favorite intraday market profile print.  Had I been around, without question I would have been using the afternoon weakness to get long my favorite stock pick into earnings: Amazon.

This is my tip top pick into month end, and I am hoping the degenerate gambling class doesn’t send share prices spiraling higher before I can work a nice piece in place.  Amazon grabbed the golden ring with this Prime business.  There was so much two day shipping being added to orders USPS, UPS, and FedEx were overwhelmed and Christmas was ruined for many a child. ..single tear.  Best Buy is again being crushed under their own weight as they die a slow, gluttonous death.

The catalysts are in place for Amazon to rip nips over the next ten days.  Considering the public’s proclivity to go gentle on Amazon when they whiff earnings, the bold trader may consider carrying a piece of risk into the release.  However, statistics over the last 18 earnings announcements show holding long through earnings carries a 44% win rate.  The key, in my opinion, is booking some victory leading up to the news drop and defining your risk with a long call position.

But I get the feeling they crushed this holiday season.

Top pick this week and may the stock gods grant us unchanged pricing in the morning: AMZN.

 

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Much Needed Pause in The Action

I never missed a step, working though the weekend as forecasted.  It was only at about 9pm last night that I cracked open a cold amber ale and watched some Amazon prime.  When I took to my PC this morning, it was with the intention of working a premarket analysis.  I became slightly disturbed when I saw the dip I missed Friday and started rifling though charts like a madman.

Then I went to iBankCoin to poach some picks.  Finally, I realized the market is closed today.  GREAT NEWS.  I have much to cover with you, finest folks of the interwebs, regarding my expectations for a strong week.  Stay tuned.  I am infinitely grateful for this market holiday.

Stay tuned my friends, stay tuned…

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Keep Moving

A good week was had by most, we traded, we faded, and things got a bit obfuscated when too many signals started crossing.  Elroi took a winning trade this morning at 4 am while I still fake sleeping.  I would pull a screenshot but I have been saddled with a criminal amount of work into Friday afternoon.

While many of you signoff and return to your beer bottle, I have entered perhaps the third inning of what promises to be a long and eventful weekend of labor.  Such is the ramification of spending the trading hours glued to your terminal, talking smack on the interwebs.  Pair that with a surprise audit and your weekend plans all take a rain check.

However, this is the arctic north, and the weather does nothing to inspire one, thus why not work my fingers to the bones while dreaming of tropic wonders?  I will make my escape from this wretched climate soon enough.

I made some pesos this week.  I gave a small bit back today but considering the type of crack rock I hold in my ranks, I chalk today up as a big victory.

The market sold off into the bell, I think, I stopped paying attention to be perfectly honest.  My charts looked safe enough to file away and get back to real work.

Top picks into next week: FB, ACAD (new long, Feb 26 calls), and YELP (I need to buy this still)

My Lulu stretchy pants are sagging at the inseam after excessive squat jumps.  This may have been an overzealous knife catch attempt.

I have to get back to work.  I will get back to you internet people later. Be well.

FINAL NOTE: I heeded our Chief Market Strategist’s caution and raised some cash.  I am 33 percent cash.

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Big Waves Overnight

Futures are up down a bit overnight after a busy night.  S&P futures printed over seven handles in range while the NASDAQ printed an eighteen handle range.  The action was fast at times and the resulting market profile print shows no signs of balance.

We have a busy economic calendar today including some premarket data.  However, as we approach US trade markets are set to open in range and in value presenting us with a lowered risk reward environment.  This condition could be favorable for individual stocks since the mild climate will not exert macro forces on these plays.

It will be important today to see who is in control of trade.  Yesterday the action was predominately controlled by the local time frame (LTF) and this could be seen as value area highs and lows being faded back to the VPOC all day.  These choppy conditions lack the order flow of other time frame who push us out of short term balance. 

The /ES futures representing the S&P 500 are still trading within intermediate term balance.  I will be watching a micro composite volume profile spanning back to 12/20/2013 which describes this intermediate term balance.  The two closest levels in play are 1834.25 and 1840.50. I have highlighted these key levels on the following /ES chart:

ES__VolumeProfile_01172014

Turning to the NASDAQ futures, yesterday the action was contained entirely within the range of the prior day and we traversed most of the daily range in the last half hour of trade.  The action is nearly identical to the prior day and printed matching VPOCs.  This inside day print can sometimes occur near infection points.  In this tape, it would demonstrate a time based correction at the highs which erodes at short sellers.  Price is slippery below 3594 and opens to door to a gap fill.  If instead we hold 3583.50 we may be successfully leaving intermediate term balance and exploring higher.  Otherwise, the naked VPOC at 3574 becomes a target.  I have highlighted these levels on the following market profile chart:

NQ_VolumeProfile_01172014

 

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Mixed Bag of Donuts

I have had more time to observe and participate in the market this week and as a result I have taken more positions and been more active socially.  It has been good fun.  Thank you all for your interaction.  It is making me better, faster, and stronger as a trader.

Elroi, my newly retooled algorithm is doing what robots often do when you first turn them on, failing misrebly.  It just so happens I activated the robot into a tape he struggles in.  He does not like choppy markets, and this can be seen in the 2 day drawdown that occurred.  Behold:

ELROI_2day

This is when most people switch their algorithm off because it is broken.  However, this drawdown is still very normal when compared to past statistics.  I will keep him running live.  He is only being fed one contract at a time anyhow.  Once I see him performing well for a month or so, I will get him up to size.

Very early on, I was surprised to see Facebook in the red.  My homework steered me to the name last night, and I wanted it very early.  As I mentioned earlier, I bought Jan and Feb calls.

The rest of the day I was selling.  I sold down my exposure to CREE and LITB and closed CLNT entirely.  After these moves my cash is nearly 30 percent.

Remember when I regretted closing C ahead of earnings?  I told you I was a genius!

I am up almost 8 percent YTD with 30 percent cash and plenty of risk in place.  Yes, I am all grins.  Let’s see who we can fleece tomorrow.  Be well.

http://youtu.be/ynfk7izWNE8

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