My Violent Book of Stocks Is Unchanged

We are fast approaching one month of static returns for the book of Raul.  November 18^th my book peaked in tandem with the swing high in ONVO and turned lower.  Still much a drunken off my superfluous hot streak, I bought WLT with funds from cashing out of AAPL (note: this required me buying said shares a few days later.  It was a sublime exit and reentry, traded like a true scalper, but perhaps more than necessary for a swing book) and cut losses on SFM and YGE.

A few short days later I bought the dip in GOGO and more CREE.  The GOGO and AMBA are who returned me to prior portfolio highs and propelled my book gingerly above prior high mark last Wednesday…you know, back when the market was going down and I was 90% long.  Then starting Thursday the bulls stampeded higher.  SOL also sent a chill across the collective spine of solar stocks, especially the YGE I have been so eagerly accumulating, effectively sending me back to Mid-November gains.

So much progress forfeited in the name of MOAR. The worst part is I like solar stocks even more at these prices.  Goodness, if my book had any cash lying around I would have been buying FSLR today.  Am I sick?  I do not believe so, when I observe the FSLR weekly chart (I know, stretching my timeframe to justify a trade) I see exactly the type of conditions I thrive in.  Have a look:

So I may forego hitting my 33% return goal on my swing portfolio, darn…I really need that money January 1^st to buy tacos and such.  I suppose what I am saying is I do not answer to anyone, this is my money, and I like my odds over the next few weeks.  It is the god damned holidays anyhow, who wants to be ferreting for giblets when they can play Edward ham hands?

I doubt however that I could play this trade as slow as LED.  That trade has been violently dead since the summer.  Net-net they are a very green shoot in my annual performance, but we have been operating on the wrong side of the chart for quite some time.  I suppose the shear age of this correction and my optimism for the industry as a whole is what has me currently positioned more aggressively now than I have been since early March.

Final thought, the NASDAQ is up 3% since November 18^th.  I am unchanged.  This means nothing to you.  It means everything to me when I glue my brain to NASDAQ 2-6 hours per day.   Here’s me verses the indices:

I am still 100% long.  I tried doing something, anything today, and no matter how hard I tried I could not justify selling anything.  I feel good about that.  Selling for the sake of selling, driven mainly from emotions associated with wheel spinning, seems like work for the sake of work.

When something breaks I will fix it, and I can’t sell YGE down here.  I can sell it lower.  I can sell it higher, but I can’t sell it here.

If you find yourself avoiding social interaction this month, perhaps opting instead to stare at hundreds of lines on a computer screen, you may be suffering from a rare condition known as Social Media Under Exposium (SMUE), a serious allocation problem affecting millions of Americans.

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The equity markets opened Sunday evening only to find buyers interested in increased exposure.  Since then price has behaved orderly, consolidating the overnight gains and positioning price outside of Friday’s price range and value.

Should prices on the NASDAQ composite sustain trade over 3511 into the opening bell, we are opening out of balance, and the risk of a violent move is high.  However, if I have correctly identified where were are currently trading within the sentiment cycle, we are deep in denial, which may produce muted trade.

The S&P is currently trading only two handles above Friday’s closing price which leaves the door open for a gap fill lower.  Early on, perhaps even pre-market, we may see sellers coming in to close the gap.  More important contextually than the gap however, is the low volume node we printed on Friday’s S&P volume profile at 1802.50.  This price level set value area low several times in November and on Friday the action from buyers was dynamic enough to leave a low volume, fast moving footprint.  Should the sellers quickly reject us back below this level and sustain trade for over an hour, we may be in store for further downside.

The NASDAQ is currently trading eight handles above its closing print showing greater strength early on.  I will be watching the overnight swing low at 3506.75 to measure bullish appetite early on.

Overall, the action looks ripe for a rally however it is paramount we stay objective in our analysis and accept and define price levels which may negate our thesis.  I have highlighted the low volume zone on the S&P on the following market profile chart:

You need to be keeping fuel cell technology on your alternative energy radar. With TM talking about fuel cell cars in Japan 2015 and USA 2016, PLUGs optimism this week, and more and more technology companies installing the systems at their headquarters it is time to put these names on your radar.

Courteously of The PPT search function, I was able to quickly cue up the players in the space. Look at these charts, things are definitely heating up:

Here’s a link to the charts in finviz

Let me know any thoughts on the old school NASA technology, slowly creeping into our lives.  Will big oil allow it?

Being young has its perks: strength, vitality, ease in courting, and lots of time to capitalize on disruption.  Disruption takes time because it must combat stubborn old folks, hell-bent on preserving their precious cash cows.

My book is a snapshot of the biggest disruptive forces right now.  Let’s have a look, shall we?

LO – electronic cigarettes, big tobacco

CREE & RVLT – LED lighting, 9 billion aging lamps

YELP – food and service review, Zagat and Google and traditional advertising

TSLA – electric cars and the supporting infrastructure, big auto

TWTR – I have no idea what twitter is, disruptive

AMBA – high definition cameras for cheap, expensive cameras and professional filmmakers

AMBA had a solid beat on earnings yesterday, but is getting the fade treatment today.  Just this morning I procured shares near the highs.  They are off a quick 4 percent.  The question is, do I care?  It is always a good time to buy a winner.  It will go lower.  I will take heat from folks on the internet, buy more at some sweet inflection point, and then ride into the sunset on the bucking bronco.  It is always a good time to buy a winner.

I am all in, 100% long for the time being.  There are other names—companies much less disruptive then the above who I hold as trading vehicles (cough cough solars) that compose the rest of my book.  But I am 16 longs, 0 shorts.  I have now made my bed atop a pendulum high on the upswing.  Can it levitate higher, or will I fall off when it swings lower?  TBD

The markets auctioned very methodical all week ahead of what is likely to be an interesting Friday.  We tracked the control of sellers which began on Monday and came into question Wednesday with a violent neutral session.  Thursday the market told us it accepted the current prices by balancing out inside of the large neutral day and is waiting for new information before exploring elsewhere.

Overnight the NASDAQ divided itself into three micro sessions by auctioning then breaking a bit higher, auctioning then breaking higher, and finally auctioning as the USA come online.  The action overnight suggests buyers have the early edge.  However they have also pressed us into very short term overbought conditions.

Taking a look at the longer term via value migration, you can see the relative strength of the NASDAQ verses the S&P:

Early on we have employment data which may better set the tone for our session, but the following reference points will still be relevant in determining whether the market is breaking out of balance to the upside or the downside:

I lost my instrument controls around 1:30pm when my stealth assault system initiated self-destruct leaving me without a connection to the mother ship.  As a result, I was flying VFR throughout the afternoon with nothing more than an iPhone to monitor our environment.  This also meant I lost communication channels with the financial ninjas inside 12631.  Sometimes you have to just go with the flow and trust that your instincts can salvage any missteps while systems are down.

Given these conditions, I started the process of violently slashing twitter followers off my stream.  It is clear many of the people on the twitter are noise, a tad too esoteric, or downright villainous.  If you happen to find yourself on the receiving end of my draconian cuts and care to make a case for me to follow again please state your case.  Something tells me nobody cares.  And that is fine, because I only care for a few of you.

I am tired of talking my book.  It was green again today and I haven’t been tossed into a furnace in a while.  My positions had me up over 1.5 percent today but slowly faded as the day progressed. I ended up making 0.75 percent.  The force behind this move was likely indecision, and perhaps a touch of fear—fear can be an excellent motivator on the general population.

I find people are more irritable during this grey period between Thanksgiving and Santa.  I have to drive extra gregarious, else find myself victim to maniacal road rage encounters.  Perhaps it is because I live amongst the lower-middle class—a people who overspend and smoke and fatten their children with saturated potatoes then poison their minds with medicinal narcotics.  A hairy man went completely berserk the other day because I was following too closely. He swerved at my subcompact, repeatedly, until we met at the next light. I had to reach over and roll my window down. He was screaming at me, mostly in caveman talk, while his partner begged him not to get out of the car.

“Let me explain” I plead several times. He could not be reasoned with, instead he just shouted over my voice. I reached over and rolled the window up then offered him a solomon middle finger.

Life is much better when I do not think of others; therefore I will cease said thoughts immediately.

I have about 50 good years left in me and I want to work for most of them.  Therefore I must find a work I love.  Talking to nefarious internet folk and banking coin alongside them is a joy.  I will continue trading on the internets.  However the corporate model has worn me thin.  My mind grows tired of the monotony and boredom is the truest form of depression.  I will never succumb, no matter how many contrails are dumped on my person.  Instead it is time to take a leap of faith.

The joy of the New Year is almost upon us.  Who wants to make some life changing moves?

When we examined the forest tree-by-tree yesterday, it was evident risk appetite was strong.  After two days of sustaining control in the marketplace, sellers were countered by aggressive buy flow Wednesday.  The action started with a strong opening drive.  All of my upside targets were met by 10:15 AM.  It was at this point I hypothesized a trend day was setting up.

The trend context made sense at the time, but it also made it difficult for me to palate the sharp selling reversal.  My thoughts became jumbled and I missed the opportunity to fade the second range extension on the day.  The aggressive selling push was futile because we had already made range extension higher after a strong opening drive.

The very fact that we set such a wide initial balance higher, driven by the buyers was strong indication of their returning confidence and control.  Taking the net sum of the market profile pieces, we can see the buyers gained almost complete control:

Our value area is overlapping/higher

Our close was higher

There is a large buying tail

The only piece missing is a migration of volume point of control higher.  This point of contention is critical today.  Will price revert back to value lower, or will value migrate higher with prices?

As of 8:15am, we are set to open outside of value on the upside.  Overnight, buyers gained control after a balanced session of trade and the result was a higher distribution.  This is a high risk environment where price can move beyond what we often consider normal.  Therefore it is vital we have price levels in mind to guide our context.

I have highlighted key support zones on the following market profile chart:

The two way action on the day made for a wonderful day trading environment.  So did the big range.  My emotional capital however is completely wiped out.  I feel like I just went on a three day bender in Mexico and all I have is a bag full of pesos to show for it.

Physically, I checked out for the day when I got stopped out of Zillow during the fast afternoon move lower in the NASDAQ.  On twitter, I was talking this trade out, saying if sellers cannot get price below $70 they lose.  Yet I stopped myself out at $70.51 during the 3 minute candle that marks the low on the session.  It was a small and normal loss, but it was a mistake, my first mistake in weeks.  I took one more trade in the /NQ but was otherwise sidelined for the day with a dizzy head.

The problem is I now have 9% cash when I wanted to be all in early into any potential ramp…so I could sell into it.  Now I may have to keep that 9 percent sidelined unless something truly enticing shows up.

It has been a pleasure riding in the small sidecar I affixed to Fly’s time machine.  Through my tinted goggles I still managed to see and procure a large swath of FSLR and YGE shares, and a nice side of TWTR.  Who was buying TWTR when the market was making new session lows yesterday?   Yeeep…

And those TWTR shares pair nicely with my very large lot of YELP, a company who affords me the opportunity to pen comical restaurant satire whenever I feel the itch.  YELP is giving a voice to the people and it keeps the service industry honest.  Also, if your restaurant makes it on YELP, you are deep in the pockets of tourists.

RVLT went to the precipice of death, starred out over the crag, and decided to walk off the ledge.  Perhaps buyers can build off of this.  Perhaps they can’t.  Either way there are billions of lamps that need to be replaced with LEDs.  Someone will do it, hopefully with dependable CREE components.

TSLA did not keep going up today.  We like stocks that keep going up, like GOGO.  Maybe tomorrow it will go up, like Elon’s private rocket program.  The man is successfully running a private space program and people question whether he can build an electric car empire.  Pitiful, small minded, imbeciles…all of them.

AMBA reports tomorrow and every wannabe X-game star needs this camera.  I talked to some automotive crash test dummies over the holiday who were telling me they [reluctantly] switched most of their collision filming over to GoPros after the young whippersnappers insisted.  The applications are endless.  With drones on the rise, how can Ambarella lose?  I’m asking for a friend.

My top picks into the close of the week are purely chart based, and also my two largest holdings: YELP and BALT.

I could talk about other stocks, but I prefer to keep my mouth where my money is which keeps everything you read here honest.

I am off for some aquatic therapy.

http://youtu.be/Sp2eRmsCxkI