You may think everyone sold this afternoon on the Fed comments, but if you were watching the tape closely we began the heavy selling 27 minutes before that pasty face took the podium. Did he speak from a podium? I don’t actually have cable.
Anyhow, the real reason for selling, the pivotal moment which occurred at 11:47 and eleven seconds (timestamp), a mere 3 minutes before top tick in the daily Nasdaq session, was me buying June calls in the succubus, Angie’s List. Everyone knows the game you play when you dabble in the dark arts of summoning the succubus. All joking aside, I like the name, if only for a brief short squeeze into the greatest month of the year.
We printed a neutral day in the Nasdaq today and these tend to occur near inflection points. The play is to grit your teeth and buy the second range extension on the day, which was the new low of the day this afternoon. However, as is usually the case with market profile probabilities, one cannot simply place a buy order below the low of the day and pray, because the risk is insane. Instead you need something to lean on. You can also use the 1,2,3 reversal to keep yourself patient. Here’s the neutral print, followed by the 1,2,3, reversal:
Bottom line: these neutral prints are a big piece of context. We are trading in the mission critical danger zone, the upper cusp of balance. Fast attempts to thrust the knife into your gut will be made. Smaller position sizes are warranted until a clean trend emerges. A short or two may not be a bad idea.
Tue Jan 28, 2014 4:48pm ESTComments Off on The Social Experiment Continues
I have been trading these social media stocks, the fire, names like FB, TWTR, Z, YELP, TRLA, ANGI, and GRPN since I started blogging here back in the cussing days. I would cuss and trade these stocks, like an internet villain of sorts, for my profit and your entertainment.
I was trying to get people excited about my little blog, over here.
I bought weekly calls in YELP and TWTR this afternoon, which prompted distinguished 12631 trader @ckelly44 to question what I was seeing, and also to explain a bit more about the trade. First, what I was seeing is this:
Second, we have Facebook earnings out tomorrow, and I have no idea what they are going to report. However, many social media stocks are in alignment into the earnings. Therefore, I expect a very binary response from the names once Facebook reports. I had a hard time choosing between TWTR and YELP, therefore I picked both—like a good American.
Here’s the YELP:
While we’re looking at charts, here’s FB:
This same look can be seen in Zillow too. ANGI is trading a bit radical, but nice too. Here’s the kicker, I have exposure to all of the above names like some kind of crack head. Should the names bounce, I will have exposure to said names, all of them, until Friday.
Here’s the exposure catalogue:
Z – Feb $95 calls and common stock
GRPN – Feb $12 calls
FB – Feb $57.50 calls
TRLA – Feb $40 calls
TWTR – weekly $65 calls and common
YELP – $80 weekly $80 calls
ANGI – Feb $17.50 calls
Via the above pot of positions, I have a ton of exposure to social media. More exposure then I have ever had in my life, as a matter of fact. The crazy part is, only one of those call positions needs to cooperate and I will profit. Options, when bought with halfway decent timing and proper sizing, offer a much more modest risk profile then I previously understood. Should they all lose after a big FB upset, my book will sink about 3.3% from here. That is losing ALL of the premium. I know, bananas.
I have a short term expectation for movement higher, you see?
MOVING ON…I had some AAPL call exposure left that scalped me today, yet I am still up 1.6% on the day. Leading the way was LEDS. The stock went #BEASTMODE into the bell on heavy volume. Someone wants some LED exposure. I still hold 25% of my risk in the LED industry. I have not sold anything yet. Today it became clear they are making another attempt to take my shares from me. They will fail, again.
I am most bullish on the LED industry. Next is social media, and third is natural gas. It is so freakishly cold here in Michigan, colder then I can remember. Also, they are limiting the propane deliveries to the hilled billy folk, telling them to, “get with the times and hook up to a natural gas pipe.” I was going to get something exotic, like UGAZ, but I opted to follow The Fly into AREX.
I did not sell anything yet, therefore my cash is down below 10 percent. I think we still trade lower from here, but it is also my expectation that individual stocks will be allowed to behave on their own merit. This could be seen today in volatility, which was crushed.
Here’s my plan, we stuck to it today, albeit slightly weaker than expected. Let’s see what tomorrow may bring:
Stocks went bananas today, and our latest big shot short seller has been made to either run for his life or dig his heels in. Nothing says welcome to the New Year like having your lolli snatched from your pudgy hand, yes my friend? I profiled a massive seller Monday morning. The market sat, literally for hours, while the bid in NASDAQ futures was PUMMELED with aggressive sell orders. The market gave way and promptly sliced to the bottom of intermediate term balance. I screwed up a bit, selling calls in TSLA that would have launched me into the stratosphere. Instead, I only rode 90% of my book long for a much more modest ascent.
I sold some positions down today. I scaled exposure down in CREE, TSLA, and YGE. I closed C outright ahead of earnings which I later regretted but perhaps tomorrow will exude as genius timing, right? Honestly, I think they rip post earnings and I wish I had a runner still. I sold OWW finally too. This was a December seasonality statistic trade that morphed into a swing trade before finally morphing into a waste of time. I scratched it as I have no patience for stocks exuding insolence to a broad market on the move. That is, unless they are sitting out a broad correction.
Today the strength in LITB caused it to swell to my largest portfolio holding. LITB has taken the proper gaunt stance to propel itself deep into the anus of short sellers. Something like this:
Later in the day, I scaled 1/3 of my MLNX long and parlayed it into MCP. These are trades RaginCajun and I are navigating with our distinct SHANK and BANK strategy. Here we are celebrating:
Lastly, I opened up some February $60 calls in FSLR. TAN worries me, the solar ETF, but aside from that little detail, I love this FSLR chart. Plus, if I win I get to talk smack about the old men at Goldman Satchel purse. Making money comes first, but roasting Old Wall comes in at a close second. I know, armature. I don’t care. Most of you guys are way too serious.
I have 6% cash, the market is fueled by degenerate stocks, and I am up 6% YTD. I should just close my book and call it a year, but instead I will press on, hopefully amusing my readers in the process.
I have a bunch of selfies of myself doing birkram yoga in LULUs that I will slowly release as my LULU trade starts to work.
I was having a modestly red day in the futures, but I stuck around and traded through the Ben, and now I’m happy to go home very green!
I bought two dips, sold two rips…Ben is a really good guy.
There was so much selling pressure today, especially after the FOMC pop was faded, that I knew any upward momentum could get these shorts running for their dear, stupid, lives. And Ben delivered the crack rock. As a matter of fact, he’s not even satisfied with the 6.5% unemployment threshold initially rolled out during the taper talks. He’s convinced we’ll need to keep on easing well beyond that, blessing the market with capital gains until everyone is back to work.
Obviously this news is very bullish for TPX because, as unemployment drops, procreation must increase. The safest way to procreate is within the confines of your bed. So get a nice one, yes?
Anyone want to take bets on where we open tomorrow?
It’s a long way until 9:30am…
I’ll quickly run through today’s portfolio adjustments:
I dumped AAPL for a scratch after riding the name through a trough. I can’t get excited about this name because it’s literally falling behind the power curve. That’s dangerous in any business. My assistant mocks my ghetto 4s about once a week and then changes the channels with her Galaxy. It has the infrared beam like your teevee remote. Plus I wanted to sell it at yesterday’s low, so why not sell it today, near the highs? It can go to $1000 and I still won’t regret this decision.
I scaled off some Z as it pokes around near the all-time high.
I cut my ANGI long because I don’t have patience for it when YELP is crushing, Z is crushing, and ZNGA is flirting with me. What was once a 6% gain was booked for a 5% loss.
All of this left me feeling cash heavy aka homo erotic. So I scuttled into DDD and SD. DDD is ¾ size and SD is ½ size.
I closed the day 80 percent long with TPX of course being my largest position because my top pick continues to be TPX, got it?
I sold out of Goldman Sachs near the open and missed the entire rally, I was moved by the strong sell flow early on in the S&P futures. The same sell flow also marked the low of the day, at the key price confluence highlighted this morning. The market turned here and ran 8 handles higher closing just off the highs.
I wasn’t offered opportunity to get on board the move until late in the session, and feeling underexposed, I added to my TPX, AIXG, and FB longs.
TPX is officially my largest position, constituting about 18 percent of my portfolio. I’m now playing a game of chicken with the shorts as we approach earnings July 22nd. Obviously, I don’t want to carry this entire position into earnings, so I will be a seller into strength. I wanted to make sure I had enough in the name to allow for some scaling, but still offer modest positioning into their earning’s announcement.
AIXG caught a nasty downgrade today. Shares were off over 5 percent and I’m near my stop point so I doubled my long. The position isn’t quite full size, more ¾, with a plan to scale off the additional shares at or near my original purchase price of $16.87. Max pain is below 15/share.
I added to my FB long. My basis in the name is right around here. I liked it last time we were trading at 25, I like it even better now that there’s a base beneath.
As awesome as this week has been for longs, my gains are excruciatingly modest due to matters way beyond my control. Like the clown baby who went full Rachel Ray and started “The Truth About The List” which can only be described as childish. There’s nothing wrong with being childish, it can be rather entertaining. As a matter of fact, I laughed out loud when I first saw the site. I even wrote about it in my diary!
“Citizen for Internet Transparency made a funny website today” it read, “it made me laugh.”
The humor wore off when the shares gapped down nearly 4 percent today. How much of this move is attributable to the hit site is unknown, but unless things get turned around rather quickly, it’s as if an anti-momentum laser was fired at the shares.
This feels a lot like the anxiety phase of an upward move which is what keeps me pressing my longs even though a part of me wants to cash out. Also we’re capturing these upside levels that seemed a bit farfetched which is surprisingly bullish.
The ETF SPY is on track to print another tight and gapped candle to add to the ADR collection we’ve assembled since the big liquidation snap. This is by far, one of the strangest and most unhealthy appreciations I’ve ever seen.
Nonetheless it is an appreciation, so longs are a-workin’
With the muted action taking place in the futures, making for a challenging day trading environment, I’ve been a spectator for most of the day. None of my charts look broken yet none of my stocks are reaching their targeted destinations. The exception I have is AAPL, which could be taking a turn for the worse. It’s certainly my lowest conviction play and every hour I think about selling it.
Two of my larger positions, TPX and GS are not doing much. I don’t intend to sell any TPX until $50.
My ANGI and Z trades seem to complement each other well. When one is feeling down, the other is up. Z is larger than ANGI, but not by much. You would think ANGI was kidnapping babies given the internet sentiment. I’ve never seen such disdain for a company, save for YELP.
People act like businesses owners have never had to grease a few palms to get the gears turning. What the fuck? You start a business.
ENPH is a daily epiphany since snaring the bears in that lovely trap. This is one of those exciting new companies where I never want to sell shares, but I must. My plan is to buy and sell but always keep a core, thus whittling my cost basis down into the threes.
FB looks kind of hot, finally.
My LED stocks are getting hammered today. Let’s face it, they’re up huge YTD, they may not participate in every rally going forward. I want more CREE, but will exercise stoic patience with the stretched name.
AIXG on the other hand needs to grab its schnitzel and man up ASAP.
F is extended, but I continue to view demand for this equity as pent up.
I’m currently at 13 longs. I prefer a max 12. But I need to buy something else unless I’m compelled to sell because something about 13 longs rubs me wrong.
We thoroughly auctioned 1624 during the Employment Data drop, with algos tearing a rift in the market one nanosecond at a time. One day watch these announcements through the filter of a 2500 contract or 3 tick range bar and get a feel for HFT. It’s like a ballet.
Anyhow, the level was “auctioned” and we had the classic first move fake out, followed by the takeout, followed by the real move, which was decidedly lower…20 handles off the high. Now the ES_F is more or less churning and the afternoon may offer some directional moves, but you’re of better service to your clients or your own money laying off this tape.
I don’t know, eat a hot dog or two.
The only moves I’m considering are selling O, which would need to weaken further, or selling YGE, which would need to strengthen, further.
Otherwise I’m enjoying the view, talking a bit of smack on the twitter hater network, and consuming baked beans straight from the crock pot. Like a good god damn.
I suggest you stow your space helmet, but keep it nearby in case of an impromptu launch, pinning us north of 1624 on the close.
You’ll hear reports this afternoon about how the market gave up its “POMO Pump” and how we’re going to hell in an Egyptian hand basket. You’ll also read two or three articles speculating about Friday morning’s Employment Report. Bears want a good number, odd no? Did we close off the high of the day? We did. Did Fords!? No.
On the surface, today did nothing. If you sleep at night, and couldn’t care less about the picture our overnight markets paint, you awoke to a modest gap lower, you bought it, you ate a hoagie, and then you enjoyed capital appreciation, like a good American.
Completely aside, did you see the abortion protestors and their haters getting “Hail Satan” trending on twitter? For a moment I thought UNXL reversed. Protestors continually blow my mind…where does one find the time? Then again I care about nothing.
AIXG started working today, finally. I want to have a nice, stable, long term relationship with AIXG, none of this run and gun business.
O has several traders on the edge of their seats. On one hand the stock is way oversold. On the other hand, the momentum is yet to truly shift. We’re in the courting stage where everyone’s nice but not being completely real, you know what I mean? I’m yet to reach my initial profit target at 44.44.
ANGI looks so ready and I look forward to dropping bombs on the paraquat who called me a bag holder citing the .com bubble. LOL
Z however, continues to be a bumpy ride. I still like the look.
That’s all my thoughts. Have a safe holiday everyone. I love me some fireworks, but I never “hold the mortar tube.” You shouldn’t either.
Because when three months go by and every stock feels like a chase, you’ll pull out your weekly charts and be like, “Well when was that perfect setup and why did I miss it? Oh, I see, it was the sketchy week leading into the 4th of July, when I tread lightly.” And you’ll be like, “Damn, of course that’s when the opportunistic bulls went all capre diem, bastards!” This scenario will resonate even louder for the cash-heavy vacationers…
…Raul is never on vacation, even when on vacation.
I’ve accepted that travel for the next 3-9 years must be within the confines of an acceptable internet connection. Perhaps you’re like, “that’s sad, really.” You shouldn’t. I’m hungry, and we “all gone eat honey.” Mine is simply being deferred into my early 30’s.
We’re all staring at the same charts, and it’s hard to look away. SPY is like your favorite train-wrecked celebrity, blowing cocaine and walking through Hollywood naked. We’re disgusted, but a part of us wonders if we’ll ever experience such luxuriously-destitute conditions. You’re sure they’ll die or be arrested, but just then Richard Branson comes to their rescue, flying them off the streets in his spaceship. That’s the ETF SPY summed up in one paragraph.
It’s a totally new world we live in. Get out your space helmets friends!
So I’m Don Johnson long into tomorrow’s shortened trading session, fully prepared to hammock myself and drink cucumber water once the market closes. Then blow shit up, and then have a remote presence Friday, like an alien.
I’m over MAX HOLDING COUNT, currently holding 14 longs, like a box of dynamite.
Cash is only 10 percent and here are my longs, listed by size, largest-to-smallest:
TPX, F, Z, GS, FB, ANGI, SHLD, AAPL, IMMR, O, CREE, AIXG, ENPH, and YGE
I’m certain this list has little value to you because, well, it’s too many names. I’ll cut the solars on any additional weakness, but I couldn’t stand the thought of cutting them before they actually become fireworks…they’ve done nothing wrong.
O shot out of a clown cannon into the bell. The move lower looks way overdone, and inside 12631 we talked about how this is one of my favorite setups.
AAPL made it back to my basis, so I cut it in half. Sitting through that drawdown full sized was muy shitty.
F closed out at 52 week highs, fantastic looking chart.
ANGI is still “meh”
CREE: all year I’ve wished I had more, but all year I’ve been long so….I can’t beat myself up too bad.
GS needs to do some fancy bear-trapping, because right now, they’re asserting themselves rather well.
Today’s follow through atop yesterday’s move atop last week’s move HIGHER is fueled by pure patriotism. As I type, the index futures are “giving it up” but I don’t care. You may in fact be hard up to find a bull who cares, because “the good stocks” are higher; stocks like Fords (sic), Cree, and Apple.
The long wick on XLF and all the jitters it produced have to this point been swept aside, and the financials are behaving rather constructive.
REITS are defying bearish setups, TLT is up, and so is our dollar. Keep in mind, our jungle informant, deep in the Forex bush, is expecting an ambush on the dollar soon. Always keep an open ear to Kong.
Pincus over at ZNGA decided he wants his net worth to appreciate, so he replaced himself. In perhaps the best decision of his life, he hijacked Microsoft’s head of Xbox, brilliant. I’m constructive on ZNGA henceforth, and will patiently tan my body and plan my entry. I will likely pepper myself in in 1/2s, 1/3s, or ¼’s due to the nature of ZNGA shares.
My only actions thus far have been tossing fish in the futures, making lunch monies, and scaling off some AAPL shares as we rocketed into the 33ema @ Jerry Garcia aka $420.
I still want SHLD, and I thought your bastards may have beat me to it, but here it comes, right to mama.
ANGI needs to go soon or it’s out, I want to keep my holdings to 12 and this one is, how do you say? Stalling.
As we enter afternoon trading, the question is, do the bears really want to be short into the kickass fourth of July? Cover your shares, or face a barrage of whirly birds, mortars, and wolf packs.
Bonus: What’s your favorite firework? Let me know in the comments below. I’m going shopping.