All About Location

If we are going to stage a low volume lift to new highs this week, you want to be in the names that stand to benefit from such a move.  You want to be in the charts with the best risk profiles and potential upside. 

With that in mind I sold TSLA when it was met by sellers this morning.  I didn’t want to over stay my welcome at casa de Musk.  I booked the gain and refocused the funds into a higher probability setup.  Today, that setup is FSLR.  Solar has been hot this year, but last week offered us discount pricing on the premium we’ve been dealing with in solar.  I bought First Solar in size.

ANGI and CREE are getting sold today and I couldn’t be more excited about this.  I need more of both.  I have a legacy ANGI position from before earnings, and I dipped my beak back into CREE Friday after selling my initial beak dip for a 12% gain.  I’m ready to buy these names on the cheap, stay tuned.

I locked in some of this massive ZNGA win again too. Still holding about a 3/5 sized position.

Find your location and position for the pump.  If we dive instead, you should have your risk defined.  Take your loss like a pro and move on.

http://youtu.be/qZCSGwKOntY?t=30s

Good Morning traders, we’re coming into the week hot again.  The Europeans put at bid in the S&P overnight and have seen the contract seven handles higher.  Price has lost momentum near 1524 which is the major confluence noted on my chart today.  It marks the edges of two significant value areas from last week (Tuesday & Wednesday).  How the market behaves at this level early this week will give you a significant feel for the sentiment surrounding last week’s distribution day lower.

Trade was rather gappy [sic] last week, but considering the first distribution day occurred, followed by a gap lower, the fact that the bulls horned their way higher into the weekend gives you a sense of the demand existent in equities.  However, Friday’s profile was poorly formed.  It has a toothy shape, and shows evidence of the low volume.  That is why I’m marking the value area high as an ideally sustained level.  The weak auction is susceptible to re-auction.

And of course I’ve highlighted the pump line, and my out of the way “trip exposure” line should we be greeted by aggressive selling.  Stay open minded.

There you have it folks, this entire week was simply a warm up exercise to get everyone ready for a big pump.  I personally never stretch before a pump.  I don’t think you’re supposed to, but you may want to check with Rhino or Marc David as they actually know how to lift heavy metal.  I don’t stretch before lifting weights because it turns women off.  They don’t want to see your ugly man body stretching.  Stop it, gross.  Grunting and spitting mid lift, of course, is a robust mating call and will cause a flock of zombie-like women to ascend on your person.

We were buyers all day in the house of Raul3.  We bought a little over here (CREE), we bought a little over there (BX and GS), and we bought a little bit everywhere (CMG).  Being long MCD’s Chipotle in a world with Cool Ranch YUM tacos is HIGH RISK.  I don’t advise you do as you see here.  Before you know it our world will become overrun by packs of ravenous zombie people, raiding Taco Bells at 3am for five or six Cool Ranch taco treats.

Yes, I sold a little ZNGA today at 9:50am.  But how was I to know how the day would progress and complete?  That’s the essence of getting it while it’s here.  It is what gave me confidence all day.  Many people need alcohol or cocaine for confidence.  I need to trade well ONLY.  That doesn’t even mean make money, you dig?  Plus I still have a decent sized position for next week’s pump.  Now I go crush all weekend.

It’s been a fun week.  I hope yours was too.  Now we go into the weekend like good consumers.

I started my position back up in Goldman Sachs, aka your favorite senator’s bank, and Blackstone Group this afternoon.  I can’t help it.  When I see S&P marching onward and upward I have to get longer.

You must look at this blog and think, damn this guy has ADD, a flip flopping democrat.  I sashay in and out of names making my broker very happy.  Then I think, look at this crazy market, up up up! Check check check! It has me trigger happy is all.  It works for me.  What works for your average millionaire is to give their money to Blackstone, and let them do all the sashaying.  You catch my drift?

Everyone wants to sashay into stocks, whist lounging on their silk sheets from RH.  Know that Raul3 never sleeps on silk sheets, as they are disgustingly slippery.  I like cotton, 10,000 thread count or more.  And I really don’t like sleeping.  Five hours max when globex is running.  Irregardless [sic] brokerage houses and i-banks are hot like housing and social.  Thus I’ll pay along, until I don’t.

The S&P is putting in a balanced session, much like my morning plan called for.  This does not mean we are done going down.  Nor does it mean we go higher, lower, or sideways.  It just means the market is behaving, comporting itself like a performance enhanced cyclist.  Closing north of 1510 is like a fresh spray of deer antler.  Let’s see if the bull robots have it in them.

The dip in solar stocks is looking smooth and buyable so far.  I’m not kicking over shopping carts and earning the scoffs of housewives like when I go after the last rotisserie chicken at KRO at 8pm (near market close) but I am reading the labels and deciding if I want to add another solar to my cart.

As you know, I’m still long shares of FSLR.  I think this stock has big upside potential, but it may need a bit more time before setting up for another leg higher.  In the meantime, shares of SOL and STP are trading well.

I bought back my CREE position this morning.  Why sell a winner?  Stupidity that’s why.  I need to get better at sitting on 10%+ gains like the noble Senior Tropicana.  Other morning actions: I sold some of that ZNGA I added yesterday and paid for a weekend of booze, bars, whores, and debauchery in the process.  As Fly will tell you, market gains are to be used for the superfluous only.  Don’t be a bish about getting it while it’s here, boy.

Also, it turns out the earnings reaction in TSLA was, in fact, an over reaction. Developing…

Have some charts you freaks:

I’ve awoke to a lovely snow of the arctic variety.  I trade best in these situations.

A strong overnight session has pushed the S&P futures nearly ten handles higher and is currently making new highs as we enter Friday’s cash session.  We’re slated to open around 1510.  Yesterday I highlighted what I see to be a poorly auctioned area spanning from 1512-1504.  Early on I’m looking for reactive selling to drive price lower, targeting Wednesday’s low at 1506.25.  Then I’m looking for buyers to reenter and balance trade, giving us an auction in this zone for the remainder of the day.

If we should see buying at the open, a breach of 1511.50 could give us a quick ramp back to 1517.75.  The thin profile above suggests aggressive behavior by the sellers.  Should we not see a sharp rejection of these prices, but instead acceptance with volume, price can quickly revert to the value above.

Simple and sweet, let’s close this week out well.

It was a pretty interesting day to be a trader.  The sellers made themselves known early by pressing their bets as my plan leaned toward.  I can’t see the market as clearly at 4:15pm as I can at 4:15am.  I don’t know, perhaps the fatigue of juggling corporate job, playing hand grenade hot potato with stocks, keeping tabs on my enterprise, and staring out the window at the salty landscape below fade my edge by afternoon.  But when I wake up and turn on the markets, they’re so clear, OLED HD clear.  You should read those AM posts, they even surprise me.

I was an early seller, cutting more losers out of my book.  I cut Citi, Facebook, and Cree.  Cree was a ten bagger.  It was a fourteen bagger last week, doesn’t matter.  Then I sashayed into SRS (ultra-short real estate ETF) on the first dip of the day and swung it trough-to-peak and sold like a boss.  It felt nice.  It felt nice booking two winners today.  You know what else felt nice?  Seeing Restoration Hardware continue to get the homo hammer to the head.  Winning while losing.  Facebook turned into tank book after I sold it too.  Hell, I’ll take it.

After all the above was said and done, I was around 60% cash.  It felt too heavy, having that much cash, so I went hunting.  One of the advantages I have being an independent trader is position sizing.  I can get in and out no problem.  One of the disadvantages, in my opinion, is I can end up having too many names in my book.  Too much to keep track of.  I was cognizant of this early this year.  My goal then was to gamble a bit, but eventually build into 5-9 core holdings.  Before yesterday I had fifteen.  So when hunting, I looked first at my existing positions, where they have gone since origination, and whether I could add.  I’ve booked two solid gains in Zynga and was sitting on a legacy position up over 30%.  Sure it could go back to its horrible 10% slasher-horror antics, but it shrugged these last two days off.  Thus I bought more.  This is however, slightly uncharacteristic of my style.  I usually wait for buyers to step in and confirm support.  That’s something I now have left unknown.  Thus the position is not full sized, but instead ¾.

Then I bought TSLA because the earnings reaction felt overdone, it’s near a risk I’m willing to wager, and there was heavy volume lifting the offer into the closing bell.

Yesterday’s liquidation break took out nine days worth of auctions.  Going into 9am, we are set to open lower, suggesting a rejection of the entire upper range.  The globex session appears to have put in its lows after selling off sharply during the European market.  Asian markets were weak too, thus I expect my Japan stocks to gap lower.

Overnight, the market found buyers around 1501.50.  I had to stretch my profile chart back to 02/07 (two Thursday’s back) to find reference points.  The first thing that catches my eye is the naked VPOC from 02/07 at 1498.  Since we’re down here, there’s a strong proclivity for sellers to target this level.  Should the selling continue through the value area, I’m going to be looking for buyers at the value area low of 1495.75.  If they decide not to show up at these levels, I will drastically reduce exposure.

Talking upside and near-term range, there hasn’t been a health auction between the 1510 – 1504 region.  We’re set to open near these levels.  If I see balanced trade occurring (a nice, Gaussian bell) within these levels, I consider that constructive.  I’m looking for a balanced session and a compressed range before I get back my “buy the dip” mentality.

The market has certainly been worse to bulls than this.  But respect the action and get out of the way if everyone starts running for the door.  Should we stabilize, keep your head clear, look for signs of buyers initiating trades, and go and do likewise where quality chart setups present themselves. 

Around 3:20pm, I sold three longs around S&P 1512-1513.

It was a slow reaction to a predetermined level.  Recall the recent past, my frustration with getting chopped.  I think I brought this frustration into the trading session today.  Even though I set the groundwork premarket, using my clear morning mind, I waited to pare down longs until several handles below 1515.75.  In hindsight, I see the active seller easily dictating price the entire session.  I have excuses, like getting pulled into a meeting.  My VPN went down also, forcing me trade VFR.  And as frustrating as that was, the connection has been spotty since last week.  It should have been corrected over the weekend.

I had a minor victory however.  I had buy orders lined up for RGLD.  Whether or not that trade pops tomorrow morning doesn’t matter.  It was a late play after a series of deviations from the plan.  If you’ve been following along, I also missed my scale in CCJ.  That means I have to eat KRO chicken instead of WFM.

I suppose that’s my observations of my performance.

It was a delicious and powerful countertrend move.  Come on, something had to be done.  The 2013 rip has been massive!  I can’t imagine being Scott Bleier during this, blowing gaskets.  However, it is only a countertrend liquidation so far.  It could be the start of something bigger.  However, diligent and methodical observation will tell us when that’s the case.

I plan to correct going off track much like American Hero Lance Armstrong who was and always will be a legendary athlete and cancer ass kicker:

http://youtu.be/RtZhG2kWVLY

I love the timestamp on my “Busy Buying” post this morning.  It’s right when the sellers really started filing into the market.  I made two new buys today and one was for a short squeeze only.  Obviously, not many shorts were getting squeezed today, thus I closed my ACCO.  The play could still go higher.  However, my premarket work pointed me to a level where I wanted to see buyers.  When buyers went no call no show at 1515.75, I began reducing long exposure in a big way.

Into the close, I raised my cash levels up to 40% by selling ACCO, DNKN, and RH.

I was receiving scrotum punches as soon as the market opened in TPX.  It’s a no news, more sellers than buyers kind of day in TPX.  We haven’t seen that type of price behavior in the name in a long time.  Has something changed?  It certainly may have.  However, I’ve retained the position.  I know how much I’m willing to risk on this name. 

The punch to the face today was missing my scale point in CCJ.  Here I was, targeting my scale.  Price was compliant, but I was pulled into a meeting.  Then I tried to get cute and grab a peak to scale my piece.  Then I put my order book down and just watched it melt for the rest of the day.  Scaling works for me.  When I miss a scale, I’m not adhering to my plan.  Those are the mistakes I cannot be making.  Losing 2% today, that’s life.  Missing my scale, that’s a death sentence.  It’s as if my ceremonies last night fell on deaf ears.

I could have booked a few gains and reduced exposure further, but given the individual chart pictures, it seemed a bit over reactive.  Then again I thought selling MOS last week was over reactive.  You can’t always be right in this market.  I swear no allegiance to the names I hold, but if a stock like ANGI barely budges while burlap sacked men sell silver, wood, copper, cement, and oil at alarming rates, that is DEMAND.

 I know what must be done, rotisserie chicken from KRO and homework.  This is where it gets fun.  IN THE FACE!