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

+ 10%

Through the thick Michigan overcast a blinding beacon of light hast parted the clouds and shined down upon la casa de Raul.  The gods of the stock market saw fit to order their mortal servants (Goldman Sachs) to upgrade the LED sector, levitating my portfolio to unseen highs.

While the indices diddle more than a Sunday school preacher my book of stocks like VIPS, BALT, AMBA, and MHR are ripping the doors off this market.  Counter trend shorts hiding throughout this market are feeling the cold hand of Raul on their necks just before I choke slam them into margin calls.

I did all of this choke slamming and raised my cash above 20 percent.  I have 20 percent cash on hand ready and willing to deploy into hot charts and the blooming LED industry.

Not a share of CREE or RVLT has been sold.  Instead I hold these bits and bites of numbers attached to letters close to chest, weary of any passer by admiring them.  They’re mine!  The precious…

So yeah, I’m on one.

10% in one day would tell the rational person their eggs are too concentrated.  But I never set out to be rational.  I am on a quest for vanishing edge pools and car stables.  I want to stop eating bullshit meat.  I want my meat to live a happy life…rolling in the grass and soaking up sunrays while raising a family.  Then I want the farmer to give that sweet meat the best meal of its life.  Then, like the mafia, quietly sneak up behind the beast and boom!  Dome them, very clean.  I need to make the monies so I can visit my meat and get to know its quirky lifestyle and name.  My meat will not be imprisoned.

Then I’m going to eat that meat poolside, off a model’s ass, while she lies on the hood of my Tesla Model S.

What I am trying to say is I bought more RVLT.  I had too much money after I scratched AIXG.  NEIN!  Nine times that god damn German ADR head faked higher.  Pathetic.

Before I digress any further—good evening to you.  Let’s do this again tomorrow.

http://youtu.be/8WRj3XZvSqQ

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RAUL BUY: $RVLT

I added to my RVLT long. Don’t be like me, this is not for the faint of heart. If you buy RVLT because of this post your heart will in fact burst into flames, and you may lose money.

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Light Emitting Diode

The words sound sweet to my ears.  The glow they produce, so versatile and clean.  The energy they consume, so small.  LEDs are the TSLA of the lighting industry.

So sure, you could for the same price purchase a decent European luxury car and live in the present.  Or you can buy the TSLA Model S and leap into the future.  You could outfit your home and workplace with CFLs, ugly little pig tail looking devices.  Or grab some soft glow LEDs at your local Home Depot, direct from CREE.

Also politicians, I know you read the Raul blog and I also know you want to save the world, why not outfit your municipal streets with the XSPR street light at only $99 a piece?  Seems like a no brainer.

And if you want to just sit back and let the pros do all the work, why not pick up your phone and call the fine folks at RVLT?  They will be happy to retrofit your business.

Save the world, join us in the future, live the LED lifestyle.

Note: CREE and RVLT are my largest two positions.  I intend to buy more and concentrate my wealth further into this industry.  This is the big one chapos.

Note Two: I sold AIXG. The Germans are failing at the LED game, oddly enough.

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Follow Through Turns To Fizzle

The S&P was able to follow through on the strength that entered the market late yesterday afternoon.  Huge volume poured into the market near the bell, pressing us into the upper quadrant and above the VPOC.  Since then the market has fizzled a bit and is mostly trading sideways about 1.5 points above yesterday’s close.

Since gapping lower Sunday evening the market has been slowly climbing back toward Da Vinci’s brush which was the naming we used for the very large value distribution that formed during the second half of last week.  The question now is how we treat this value.  Can we get back inside it and sustain trade for more than an hour?  If yes, there is an 80% probability we will rotate the entire area.  If instead we test 1686.25 and the market sharply rejects price, we may be in store for a more broad based correction.  We may even reject the area initially but find sellers cannot follow through on the rejection but instead run out of gas.  These are three scenarios you must consider when observing a large balance of trade.

Overnight we printed two TPO distributions, but a relatively Gaussian volume distribution suggesting we are finding balance in the marketplace.  We saw a sharp buying tail on Monday morning that bulls do not want to see given up which starts at 1671.  Trading back below that level shows definite weakness from a once otherwise strong buyer.

I have highlighted these levels and a few scenarios on the following market profile charts:

ES_MarketProfile_10012013

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The Real Reason Why I Tuned Out Today

You may be sitting in your little chair looking like a big man, thinking you’ve got Raul hammered down.  You think I turned off my twitter feeds and news flows because I did not want the political theater affecting my decision process while I ferret in and out of the futures market.  I know you rack your brain wondering what Raul is doing, I understand.

But you are wrong.

The real reasoning behind my news diet today was I have not seen the final episode of Breaking Bad yet.  And I have loved that show.  The last thing I want to read is some wonk making some jackass reference that blows the ending for me.  Oh I would hunt that small suit wearing no-neck down and teach him a thing or two about manners.

So I sat in blissful ignorance and made a few bucks trading futures.  Elroi made a few bucks too—was having a great day until he decided to short near the close, again, like a jack asshole, and I was not there to override.  But green still, which is good.  I may hard code a 3:15 pm deadline on Elroi, but I haven’t run the stats yet.

I bought VIPS and sold a little more YGE today.  That is it.  I still intend to hold my YGE runner until the ten dollar print, but I felt my trigger finger itching so I bailed on another third.  I bought VIPS before it has done anything yet.  Both of these moves seem premature so I must make a sacrifice to the gods this evening.  Perhaps my finest stock pick…developing…

I ended the day with my portfolio down 1.5% today which, given the huge gap lower, could have been much worse.  My fond memories of October tells me things are likely to get worse before better, but overall better.  However, I shall not overstay my welcome at the feeding trough. If I get the cut and run feel, I will cut—and of course run.

Nothing like a month end Monday, yes?

Note: I will not be reading any comments on this post until after I watch my teevee show, just in case there’s any wise crackers in the audience.

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There Is a Bid Under This Market

Price is/was/will always be the final arbiter, but I like to use cumulative volume delta to peer a little deeper into order flow. Check out the below graph, the below line is averaging the delta (volume at offer – volume at bid) to smooth the behavior out so I can better observe the trend.

Since the 26th, more orders are taking place at the offer than the bid suggesting aggressive buyers are more active than aggressive sellers.  Perhaps the developing shape, wall-o-worry, is leading the market.  Perhaps buyers are getting too far ahead of themselves and will blow their buying power before an actual move.  Nevertheless, the bid is present:

ES_BID

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Month End Gap Management

Futures opened weak Sunday evening amidst headlines of a government shutdown.  Whether or not this established news flow is the reason for the gap lower, or if instead some other macro characteristic fundamentally changed over the weekend I cannot say.  What we do know is today is the final day of the month and we are coming into it with a 15 handle gap in the S&P.

These so called pro gaps are named as such due to their quirky behavior and proclivity to defy smaller gap-like tendencies.  Simply buying the open with the expectation of the gap filling higher is a fools endeavor unless said fool possesses very deep pockets and radical risk tolerance.  Instead one would be keen to closely observe the first half hour of trade and do their best to classify the opening type and the implications it has on both buyer and seller conviction.

Early on, my initial hypothesis is for sellers to push and attempt to drive lower on the gap.  However to my eye the task seems daunting.  There have been three rotations lower since the intial gap down and in their sum they have only achieved four handles of rotation.  The market keeps bumping its head on 1676.  Should the buyers breach this price and sustain trade, we would be well on our way toward navigating this overhead gap.  Watch for head fakes!

Down below, I am keying off of two support levels dating back to the early days of September: nearby 1669.50 and the ghoulish 1666.  Should the market furiously slash though these levels early this week, it may be prudent to raise cash levels and consider hedging.

I have highlighted a scenario and price levels on the following market profile charts:

ESMP_09302013

 

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Too Smooth

This is your Capitan speaking, the time is 5:01pm and we have touched down on the gap and the weekend.  The skies are sunny and I hope you enjoyed your flight.  I want to thank you for flying with us and hope you enjoy your stay.

It’s scotch thirty…

I let the instruments bring us in the weekend, flying IFR and letting the machines do most the work.  Speaking of machines, my jackass helper robot Elroi took one trade this week and it lost money.  I suspect he has been too busy courting the modified Siri to trade.  I intend to cut his binary unit off should this insolence continue.

We went on and on ad nauseum about the value area developing these last 36 hours and we formed the hypothesis that a move lower was in the cards but not to read too far into it beyond forming the proper boundaries of a quality auction.  Check out the final product, I call it Da Vinci’s brush:

smoothlanding

I catapulted my book 7% higher this week and still managed to end the week with 18% cash in the hopper.  I made all of this alpha while the market dicked around and formed Da Vinci’s brush.  I dicked around inside that auction too—trading futures for better or for worse.  This week it was for worse. 

I struggle to follow rules because rules are structure and I enjoy living a fringe lifestyle.  But I am telling you as sure as I am sitting in this Herman Miller that rules form the foundation to good decision making.  I have good rules backed by 100s of computer hours and old school back testing—gifts bestowed upon my person by the gods of large numbers.  I need to stick by them and stop dicking around.  In short, I am spinning my wheels in the mud, again, trading futures.

In the meantime the in between time I go out and earn 3x my losses trading MHR.  I told you pimps there were pumps ahead for the explorers.  END is next, watch it rip next week.  As for YGE, in one way shape or form the fine scholars here at iBankCoin have rammed this ticker into your frontal lobe.  Hot damn I spanked it out of the park this week again, nailing a perfect entry, scaling off a third, and now letting the rest ride.  Target?  You should be asking about my target because entry is only half the battle.

Ten twenty five.

Today’s moves were to cut CLF early, cash in some MHR later, and buy more LO FTW. 

Is the government shutting down or something?  I just trade these charts.

**IT’S ALL FAKE**

Be well,

Raul

http://youtu.be/Z4bVgEVnvyI

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Soft Landing Concept

Observing the long wick-like characteristic of our current developing value I surmised a move lower would not surprise me.  However, I did not cover any swing longs because a move lower may or may not change anything about market conditions.  The key factor in this case is velocity and location.

We have a gap below, dating back to 9/11 and these market voids tend to get filled.  We are only a point away from the upper boundary of the gap fill but it is more important to focus on the value area that developed just below this gap.  In this case, it was formed over two days, from 9/11 – 9/12 and it has very good reference points.

1681 is our first level of support, the value area high.  The price level also coincides with a very effective Fibonacci extension. The value area low is at 1677 which aligns well with another Fibonacci extension.  Therefore again, I see weakness as a buying opportunity.

However, I do not want to see us spending too much time below 1681 which would signal the market is accepting the lower value.  Instead I am looking for the sharp-type of rejections we have been seeing from the sellers every time we attempt to explore higher—I want to see the choppiness cut both ways if you will.

The market rotated quite a bit overnight, printing over an eleven handle range.  Indecision is certainly high as we roll into month end.  I give the sellers an edge early on unless the bulls can recapture and sustain trade above 1689 which is yesterday’s VPOC.

I’ve noted key levels on the following market profile charts:

ES_MarketProfile_09272013

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Under My Ambarella

My book was up over two percent today.  The sheep were shepherded higher by the benevolent RVLT which rolled out the Power Point slides they will be using in their upcoming dog and pony show.  The pocket of momentum present in solar fizzled into the bell but still provided impressive gains this week.  I hardly see the run up in YGE being over, and given the ace entry earlier this week and the scaled piece, the best play seems to let my money work here instead of constantly fiddling with the knobs.

The afternoon was all about MHR.  This is another stock I nailed my entry on.  Patiently waiting for quality entries at well-researched levels, even when the battle is at its hottest, gives me a huge edge when it comes time to manage the position.  I don’t get that pinch on my shoulder blades telling me I am losing my cool.  Being up over 10 percent on the name in a scant three trading days and feeling the urge to scale, I decided to do the opposite and buy more.  It brings my average up but still keeps my cost basis within the consolidation range.  It was a good move according to risk.

October is fast approaching and I get the feeling the headless horseman is dusting off the cobwebs and making preparations to thrust his axe into my spine.  Thus, even though I am 95% long, I have a clear sight on the exits.  I feel like a squirrel foraging through a bountiful prairie while hiding from the hawks under a squirrel sized umbrella.  Stocks like AMBA, BALT, MHR, and YGE are giving this small rodent the courage of a lion.  I will eat the poachers faces and then go lay in some mud with the Rhinos.

Such is the life of a squirrel in a tuxedo.

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