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

Bulls Calmly Assert Dominance into Close

The bears spent most of today unraveling what was an otherwise patriotic kickass week for good stocks.  Bad stocks, like Ford, not so much.  Nevertheless, bears really put a damper on this week’s trade as it’s human nature to give more weight to the most recent past.  They tried ending the week with notes of black smoke paired with a bold nutty finish.

It was not to be had.

Late morning dip buyers were made whole by the close of the bell.  It was quite splendid to be a spectator today.  I was waiting for the late afternoon rally to ensue, hoping they wouldn’t start too soon and blow it before close.  Beautiful timing, beautiful execution, brilliant!

Just enough pump occurred this afternoon to keep everyone curious going into next week.  Charts could set up well to the long side should we see a higher low met with strong demand.  TBD, folks.

Enjoy your weekend.  Especially anyone in this maddening heat!

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Liking This Bed Trade

Beds are big business.  Just like the peddlers of dirt nap accoutrements, bed salesmen don’t bother selling you a bed, they sell you the fear of living without one.  Big business bedding is, with nice padded margins.  Consumer sensitive yes…so could the same store sale data from Costco missing estimates be extrapolated out to Tempur-Pedic sales volume and further to the share price?  The fuck if I know.

I know two things about TPX:

I like the picture of the chart

Lots, like glue trucks full of ampersands are chasing TPX trying to slop glue all over the share price like some fucked up adhesivephiliac PETA member

The chart I like, the lawyers I turn a half smile to.  Class action mother fucksters, with their mailers, late night teevee ads, and phone jockeys.  These guys I really do like as they’re industrious risk takers and that’s what drives our country to continued greatness.  Squirrels chasing nuts.  They definitely help define sentiment, which at this point is shit.

When I look at the charts however, I see risk I can manage, and juicy mean revision potential.  Take a look:



And I really like trading mean reversion trades in summer trading range markets. Hit the corners players.

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Mobile/Social Stock Strategy Talk

With the action seen in Yelp and Zillow over the past swing, my attention continues to be on social and mobile plays.  The sector is certainly attracting risk capital again.  I’m already positioned in P, YELP, and Z.  YELP and Z will continue to perform well, and I’ll look to ratchet up my YELP position to 10% on the next pullback.  I’d love to get some low twenty one dollar pricing, but will assess the buyer appetite on the next pullback and trade accordingly.  Zillow is still a messy chart in my view and will continue to be a 4-5% position until I get a clearer picture of the flow.

Pandora I am big in ~15%, with my cost basis right here at 10.54, and I’m playing for the break.  The potential energy in price is big after a long consolidation and the break either direction could see significant price discovery.  So don’t get cute and add to a losing long.  Cut it sub $10 on a closing basis.

Mostly I want to turn your attention to Zynga.  I don’t like this company.  It’s run by derelict Silicon Valley coconuts.  They make little games that distract and numb the populous.  The stock trades so very shittaly.  So utterly lame is ZNGA in fact, I’m considering buying it.  Why you may ask?  Mean reversion.

With the social-mobile hot pocket coming back on line, and gambler money jonezing for picks, Zynga fits the speculative bill.  It’s beaten, deserted, and five bucks and change.  That means noobs can play.  That means it can get wiry.

I’m willing to risk down to $4.36, so right now the drawdown is ~20%.  Therefore a 5% position would risk 1% of my portfolio.  I don’t like the trade that much.  So price needs to come down a tad more.  I may or may not get my position, but I’d like to get a 5% position, and risk 75 basis points, so I’m looking for a $5.00-$5.10 entry.  I’ll double down and lean on $4.50 should it trade, and bail south of $4.36.  All the aforementioned is hypothetical of course until I get my initial entry.

Don’t forget to mind the resistance, scale some profits. Don’t be a pig.

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The Heat is On (Yes, Song Included)

Well summer is full swing, market volume is low low low, and it’s hotter than @QueenXenia’s sunburnt thighs outside. That could only mean one thing: it’s time to grill…SHORTS. And meats and veggies of course, sure sure. But shorts require a special grilling vessel known as the brazen bull. Weber makes one and you can find it at your local HD.

Joking aside cool headed iBC resident chessNwine has laid out the strategy for the week. We’re looking for low-float stocks with significant short interest. Fly is squeezing fuckers too. Just as my TPX position could not catch a bid this morning and resulted in rapid price discovery to the downside, short squeezes levitate the offer resulting in a pump higher. The moves may be temporary however, and by no means should it be your only strategy.

Current positions by weight are as follows: P, ADS, Z, YELP, and EXK. Pandora I’m huge in, now 17% of my port.

50% cash and 5% AWK .

Pandora is getting wiry into the close. That is all

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Bracket Committed




When you define market conditions to be range bound, it’s good to establish price levels, often called goalposts, which define the range you’re envisioning.  The idea here isn’t to predict the future but to hone in your observation and interpretation of market behavior at these reference points to gauge sentiment and conviction (or lack thereof).

I opined what I thought were my range posts back on June 8th  and I still am using the same vision while positioning myself.  We’re now reaching the upper bracket of the range in the SPY, but my favorite high spec mobile company, Pandora, is bouncing off bracket low.  Although we may see another downside rotation through our range on the indices, I used today’s big push as support to size into Pandora.

The daily chart of Pandora has chugged through a range since blasting off the $8.50 base during pre-FB-IPO days.  Since then it has churned $10-$12.  And in my view, market participants are accepting a higher value in the price of Pandora stock, and the next move will be price discovery to the upside.  Thus, when I saw price sitting on the bracket low yesterday, I put my tester piece back on.  If you’re going to play the bracket, you must commit.  This morning, it looked strong so boom, I ratchet up to a 12% position.

Unless it charges $12 like an angry bull, the plan is to take a 1/3 scale if we approach $12 from below.  Otherwise I will press, but look to scale a piece during that trading session.  The remaining position will be under close scrutiny for another round robin down. Below $10.00 we could see a cascade of bone crushing sell stops. I want to avoid that mess.

Trading brackets, SIMPLE, but never easy.  Commit baby.

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Picking Up Nickels on Land Mines

This week most of the twitter stream is focused on the same names.  It’s apparently causing a crowded situation.  Everyone’s hitting on the same girl at the bar simulatneously, all getting in eacother’s way and rejected violently.  I was tempted by LNKD as it setup after lunchtime only to be on the receiving end of a nasty downdraft.  I like the look of the dailies and was considering letting the stock run its course, but I swapped it out late in the afternoon for Zillow instead.

Zillow I like both as a company and a chart of price activity.  LNKD not so much, I think it’s where tight slacked homos stroke eachothers ego. Now Zillow, It hasn’t done much since IPO, but for the time being $33.00 has been solid support.  My stop hovers slightly below there and I will lean against the number and add should we trade into the support zone.

Beyond that I scaled off some exposure today as detailed in my earlier post.  Scaling works for me.  Everyone’s strategy is different but I find the key to my long-term success is taking hard fought profits.  Especially in a directionless, no momo tape like the current.  I also find it key to let runners run.  I thought I would have a piece of Pandora running along freely like a wolf.  Instead I have no position left.  This climate is not conducive to swinging multi-month trades.

My EUO hedge was scaled back a bit this morning because tomorrow is likely to whip the currencies around.  I still like the price behavior however and retain 2/3 of the hedge.  This ETF slugs around mostly.  I currently have 10% of assets here.

Cash & AWK: 48%

Longs (by weight):  TRIP ADS YELP Z TPX VHC

TPX is being attacked by suits and ampersands, tread carefully on this sleepy name.


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Jostling the Port

Good Morning traders let me quickly update you on my morning moves:

I scaled off 1/3 of my EUO hedge ahead of the summit and as we test the low range of what I perceive to be a value area in the $6E_F

I scaled 1/3 VHC trade off as it popped $36.  This trade is so damn crowded with over caffeinated scalpers it’s bound to be short lived, for now.

I picked up a ½ position in TPX.  Mean reversion trade.  Plus my bed industry insiders say they’re rolling those mother fucking beds into showrooms at an alarming rate.

More later, for now stay chic.

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No Momo

Momo plays are taking a back seat for the time being, as money isn’t chasing price at the current market juncture.  This however is an excellent trading environment if you shorten your timeframe and focus your attention to mean reversion trades.  Seeing as we’re below the midpoint of our range, you want to consider beaten down names whose price has room for some upside reversion.

One of the names on my watch list is RAX.  It’s working on putting in a higher low today so you’re not catching a knife and the risk is easy to manage while still having some upside room.  If I take the position I’m targeting $47.00 for my first scale, likely a half scale.

I like to take ½ positions with mean reversion trades as the risk is a bit higher then trading a momo pullback.  That way you can get the second half on should it be necessary 5-10% lower, depending on your risk definition.  Good practice is to also scale off your double down at the initial entry, thus lowering your basis.  Or you can take the full position as is.  Your choice, your risk.

Trade’em well…

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Position Update (More Cash)

Position Update (More Cash)

Good afternoon pen pals, this market sucks balls.  You can’t be mad at the markets for being indecisive.  You have institutions forced to hold positions, a weary retail base, and bow tie wearing cooks calling for the end of days.  Put on top of that a throbbing red cherry bomb, European leaders, and you have a sundae best suited for blowing your teeth out the back of your head.

Then you have the chartists, the market profilists, the Elliot Wavests, and the technicians all looking at choppy charts going nowhere.  They’re in cash.  No mo momo.  Thus we have our summer trading range.  Hated on the way up, cheered on the way down…at least on twitter.  The key to navigating this market environment, or any market environment for that matter, is to never impose your expectations on the market.  Instead analyze and manage risk.  Know the potential ranges a stock or ETF may move in a given day, where your trade is “wrong” and define some targets (time or price).

I upped cash today.  I sold OPEN, P, and GSVC.  OPEN and P I could buy back as soon as tomorrow.  GSVC…..TBD.

Current holdings after the bell, by weight: EUO TRIP ADS YELP and VHC

CASH 55% — AWK 6%

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Midrange – Place Your Bets

As we enter the official beginning of summer, it’s hardly surprising to see us priced at the middle of what could be our range for the next six to twelve weeks.  Most of my positions discussed in the iBC forum are swings with the occasional multi-quarter hold.  Therefore the daily candle chart is my primary focus when trading.

Taking a look at the SPY daily, there are several reference points suggesting range bound sideways action:

The QQQ’s have the same look.  So if you share the sentiment that we’re range bound you have a few positioning choices:

  1. Cash – spend your time building watch lists or perhaps ignoring the market entirely
  2. One Direction (no homo band) – Enjoy gut wrenching doubt at opposite range extremes
  3. Mixed bag – perhaps a slight directional bias, but hedged and with some cabbage on hand (my favorite)

The thing about a range is it eventually ends, and often in a violent manner.  It’s fun like most forms of violence.  I think the range eventually ends to the upside.  Therefore I am keeping a long bias via my favorite tech/mobile names TRIP, ADS, YELP, OPEN, P, and (sigh) GSVC.  Weighting is in order of listing.

I’m playing the downside (hedging) via short the Euro dollar using EUO.  As chess has been discussing, the Euro is considered a risk currency.  I could go long US dollars and have similar positioning, but I figure the butt fuckers in Europe give the hedge a bit more downside spice potential.

Finally I hold around 42% of my portfolio in cash and AWK.  I pool the two together, and this may be unwise, but I don’t expect much of anything from AWK except its coupon and I always add some more when the weekly chart gets oversold.  My current basis in the shares is $26.00

The plan is to ride out the summer, be ahead of the herd when we bust ahead, and bank a few percentages in the meantime.  Simple.

Care to share your positioning? I’d love to hear.

Also, it’s all about the summer chic pool party music on Songza:

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