iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,075 Blog Posts

Keeping It Simple USA #1

Tight range overnight, and considering we had a State of the Union address and I was expecting a binary reaction I’m rather thrilled with the quiet globex session.  That’s what’s up!

The president didn’t throw any major curveballs.  He’s just as stoked as we are that the market is ripping.  It was one of his first talking points.  Here’s my health of the country bellwether: where’s the Dow and how much can I sell my house for? Both are up, so USA #1.

As I pen this piece the S&P future is drifting slightly higher but 1520 is looking like a key upside level today.  Down below I want to see buyers resurface at 1514.  They handled that level with a calm and collected pomp yesterday.  Should they lose it things could get slippery.  You can reference yesterday’s post to see the slippery zone I’m still observing below.

That’s it.  Riding the rally is simple, until it isn’t.  Protect your necks.

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The Stage Is Set

Here we are mid-February aka halfway through the first quarter.  Are you on track to earn your quarterly performance bonus?  February is a peculiar month.  It’s short, up here in the north it’s wicked cold and grey, it has the Super Bowl, and it’s a set-the-tone-for-the-year kind of month.  You may argue January sets the tone, but when month two grinds on and the bulls are still pressing the highs, you have to really step back and observe your surroundings.

I do my best work in February.  It’s always dark outside when I get to my office, and it’s dark outside when I leave.  I can drink with friends, but most of them lie dormant like bears most the week.  I could go to the bar, but really I can only expect vagrants and pickpockets.  So I work, then I go home and work.  And before I know it the sun starts hanging around a bit longer and my purse is larger.  It’s a good month.

I’ve made a generous sum of money thus far this year.  A great deal of it was made yesterday on ANGI.  I remained humble to the market and scaled off some profits.  I reinvested the funds plus some into CCJ and GNRC. I got the tingle to sell a little into the close today. Yet here I sat, into the closing bell, unable to part ways with any of my positions.  They all look so good.  Thus I’m riding into the State of The Union address with only 3% cash.  Ah, my lovely three, there you are.

I’m hoping the SoTU, put on by BHO, takes my SoTY, C, and rips it beyond HOD to HOY again TOMM.

Zynga absolutely destroyed chasers today.  It came back to where I added post earnings.  For any home gamers keeping track of where I stand on the name, half of my pre-earnings legacy position in the name is up 33%.  Plus I booked two wins in the name earlier this year (once from the back seat of a wild taxi cab ride), putting bread on the table for myself and my animals.  I feel like I have a good handle on the name this year, and yet, I need to make sure I don’t fumble this third go at the name.

I’m sitting on a big win in American Apparel too.  I suppose I’m mentioning all this winship because I’m concerned with the President’s speech tonight.  People often walk away from his speeches with binary emotions.  Love it, hate it.  And the market can follow suit.  My individual positions look good, the indices look good, the currencies look good, but this event can dick punch me off my high water mark.

So even though I abhor watching the teevee, I’ll have to catch tidbits from this talk.  I may get drunk.  Adieu.

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Debbie Downer Socials Stuck Babysitting Grandpa

One piece of the market that is sucking wind today is last week’s high flying social stocks.  While many of these companies get the “privilege” of being at the Goldman Sachs tech and internet conference their stock prices are taking a (s)hit.

Aside from all that noise you need to be aware of how an instrument trades before you hop on board.  Take ZNGA for instance: if you’re surprised when the stock moves 8-10% against you in one day, you’ve never traded this wiry bastard.  Welcome to trading ZNGA, size your position accordingly.

Facebook continues to get the infidel treatment by the terrorists on twitter.  I love the sentiment out there, it’s one of the only things keeping me in this weak chart.  I may get shaken out of this name, or I may get larger, but I’m not yet willing to write this position off as a loser.  And if you recall, I’ve already booked solid gains from the first pump in the name.  Taking scales is what works for me.  I have booked profits cushioning this position.  Bring it on.

I can promise you this, the last place I want to be is holed up in some ugly banquet room, standing behind a table pandering to banksters.  I feel bad for the companies held in GS purgatory.  Many of the employees sent over would rather be enjoying their MJNA, reading comic books and writing code that will soon rule the world.

Except for CREE, they’re all business: buying hookers and cocaine for the GS bankers, making moves.

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GET TO THE CHOPPER

The market is doing its levitation trick again today and it’s best to play along.  Otherwise you’ll end up disappearing, poof!  It is magic, you see?  You like?

I’m continuing to keep it as simple as possible to avoid mistakes.  This means I don’t have much news to bring you.  I have a broad array of longs in industries across the world.  While some of the stocks take pause or rip around with tenacious volatility (see ZNGA) you have other stocks continue to behave like productive members of society.  Doing as they’re told, going higher.  Just as I do what I’m told: drive to work, punch away at excel, marry and reproduce, etc.

We’ve sustained trade above the pump line I highlighted this morning for most of the session.  If the bulls continue to hold on up here, the probability of an exploration higher becomes very high.  Grab ahold of something dear to you, and participate in capital appreciation, like a good citizen!  Then you can buy a house before they get too expensive.  Man up.

TOP PICK: TPX

http://youtu.be/OVpPR1pyfkA

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Finding The Pump Zone

Happy Fat Tuesday ladies and gents, seeing as resident trader extraordinaire RaginCajun has taken to the streets of New Orleans to partake in booze and debauchery, and rightfully so, I hope you find your way over to this humble blog.  I love how MCD has always been hip the Christian crowd during lent, offering the double patty fish fillet for all of the righteous gluttons needs.  Let’s get right to the profile and see what the participants are thinking, shall we?

The trading action into the close of last week was no doubt spectacular for longs, as buyers continued gobbling up equity prices like they were on fire sale.  Sellers simply could not keep up with demand without raising prices.  Then Friday came, we had a big storm coming, and all the market managed to do was squeeze some shorts in the AM then pretty much trade flat into the weekend.  Monday the index churned along, in balance, while allowing solar stocks to set up really well and a few social stocks rip rocket higher.

Last night the Japanese ministry reaffirmed their goal to inflate equity prices, and all the excitement led the S&P future contract to put in a very wide overnight range from 1508 to around 1514 as of this writing.

The profiles give us insight into the daily candles being formed.  The two most significant observations I offer you are the thinly traded range below, which could see a retest, and the level where I think we continue to pump higher.  Anything in between can be interpreted as balanced trade, which favors allowing individual equities with quality chart setups to rip.  So you have two scenarios leading to ripping stocks, and one that may give pause.  Decent odds.

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$NIKK Today vs. $SPX Post QE2 Announcement

The behavior of Japanese leadership sounds very similar to the game plan used only a few years back by our bearded leader and his manipulation crew.  The same behavior that in fact has driven party boy Scott Bleier to perma-disgust after years of watching the “can’t lose” #costanza market game is being implemented by Japan.

Sure it has its differences in rhetoric, but the end goal is the same, inflate.  Since they’re stealing a page from our playbook, and since I’m only a lowly chart trader, I thought we could glean some insight into the situation by templating today’s action in the $NIKK to the $SPX QE2 announcement.  Why QE2?  Well, the action is playing out in a similar fashion.

Check out the chart comparison click to enlarge:

This isn’t actionable information.  It’s more an exercise in interpreting a market’s reaction to a similar event.  After QE2 was announced, we had a modest pullback and then it was off to the races.  Maybe we didn’t understand the can’t lose implications at first.  Or remember how people insisted the Fed’s actions to be “firing blanks” and other hillbilly talk?  Should we see the Nikkei experience a mild down draft any time over the next 3-6 weeks, and buyers remerge, the play is to get long and see if they’ll rip like we did.

However, their market has been running much hotter than our own and could continue to do so, leaving us behind.  That would tell us the cycle is occurring faster than our own, and may continue to do so.  In this scenario, we try and grab hold to what we can, and hope to bail before things get too freaky.

Either way, the charts and agendas suggest we could see a big, sustained run.

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Being a Stalker

Often times we find a company or product we love and as traders and investors our minds instantly gravitate toward the ticker symbol to see where the company trades.  Other times we do research into an industry and find our favorites.  Then, we pull up the chart and find the stock is running hot.  If you’ve ever taken a hot momentum stock long the day before it starts correcting you know the feeling of a hot knife being thrust into your stomach.  So you toss the name on a watch list and go your merry way.

Such has been the fate of GNRC for many months in my trading software.  It has sat on my ‘stalking’ list sashaying higher.  After seeing the east coast get pummeled again I really wanted to buy.  Today’s selloff came at a perfect time for me, I had cash on hand so I bought.

I typically don’t buy red candles.  It’s too….Keith.  I can’t really explain it any other way.  I’m not a heavy lifter.  My transactions won’t stop a falling tape.  I like to buy in the presence of other buyers.  When I bought GNRC today, or when I buy a name like CREE the day it gaps up huge, I put on a smaller position because the setup isn’t my hon3y hole.  For GNRC I used a half position.  Here’s why, I have a larger risk:

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Keeping Cash Levels Low

After scaling off a profit from my beast ANGI position today, I found myself in the precarious situation of having too much cash on hand.  The market is running very hot, yes.  My rally fever is perhaps matching the temperature of the market, sure.  These are the two caveats you must keep in mind while reading these musings.

Last week we talked about the nuclear trade.  iBankCoin noble Mr. Cain Thaler has been working the nuclear trade since Fukushima.  I really like MCT’s style.  He has incredible foresight when everyone else is running around with their heads on fire.  If you’re not reading everything he writes you’re doing yourself a great disservice.  He pounded the table on AWK two years back and I’m still holding this massive winner, collecting a nice coupon along the way.  See how I digress?

I love energy plays going in the State of the Union address tomorrow.  You know Obama is going to jawbone infrastructure and energy.  He likes nuclear and solar panels and all the other alternatives.  Position accordingly.  This is all subjective talk, mind you, by me.  I really just like charts.  You need to remember that.

In order to bring my cash back down below 10% I started new positions in GNRC and CCJ.  May the weather continue to be volatile and our energy infrastructure feeble.

I highlighted the levels that will make me rethink my stock exposure this morning.  The plan will continue to be amorphous like any good plan should be.  Grab some nuts from DMND and read along.

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Staying in the Present

I’m impressed with the roster of musicians I saw at last night’s Grammy awards.  I often get stuck in the mentality that the best music has already been made, and for many listeners’ ears that’s true.  But there’s always more in store in this short life.

Well here we are, mid-February, making new highs in the S&P.  As I’ve continually expressed during this up move, and perhaps the advice I’m trying to hammer into my own mind, is to not over think the trend.  Keep your picks simple, you want stocks that participate in the strength of the market.  I sashayed out of Goldman last week, why?  No reason.  Look at its chart, side-by-side with S&P, they’ve been mirror images this year, except GS is like the levered version, check it out:

Instead we should focus on key price levels that would tell us overall sentiment has changed and sellers have grabbed the reigns.  Taking to the market profile, let’s pay close attention to Friday’s session since it will provide the most immediate feedback as we progress through today.

Friday formed a tight letter P.  The P-shaped profile has appeared often this year, and as we’ve discussed it suggests a temporary phenomenon has occurred known as a short squeeze.  It suggests the sellers were forced out of their positions, but once they were forced to buy out no new orders entered the market.  In a downward trending market, this can be a good opportunity to short.  In an up trending market, we take the action with a grain of salt and look at other contextual pieces.  What was going on Friday?

There was strength in the morning and then the east coast was freaking out over some snow.  Perhaps that explains the benign action of Friday after lunch.  They all left.  Regardless, we need to see buyers hold off the single prints starting at 1511, if that level is lost, batten down the hatches and prepare for a rotation to 1508 then 1504.  If trading back to those levels doesn’t bother you, hold tight and consider the real fight to occur down at 1498.  That level is everything.  It’s bigger than the 1500 century mark.

Otherwise, if we continue higher keep playing your pumpers if you’re a momo guy and playing your event trades if you’re an event guy.  If you’re a value guy, do your thing player.  Get on the good foot!

http://youtu.be/1N5jY00z_Sk?t=20s

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