My book is down over two and a half percent today and as you may imagine I am a bit salty today.  There was a broad market selloff last quarter when CREE disappointed.  It tends to exacerbate this brutality.  Thus my best line of defense right now is to sit on my hands and brood.  The broad sell off inflicting pain upon all LED stocks is completely without merit and reflects the irritating nature of humans to overreact.

Have you ever gone around a left-hand curve on a freeway during rush hour?  If one person overreacts in the fast lane (and they always do) then the entire fast lane comes to a halt.  Then the contagion spreads to the next lane over.  Now you have the two ‘fast’ lanes parked on the freeway while Raul zips by in the slow lane at posted highway speeds.  This is humans overreacting.  Bad humans, smack yourselves on the nose with a newspaper.

Sometimes even with clever tricks you get swept up in mess overreacting humans create.  Such is the case today with LEDS.  It is best to breath, stay calm, do not get angry, and simply waiting things out like a gentleman.  Perhaps call an old friend and catch up.  Eat some good food.  Do whatever it takes to stay calm.

I want more CREE shares because they are a fantastic company and their positioning in the marketplace is divine as leaders.  But I am waiting.

The pain I am experiencing in the LED trade isn’t bothering me.  It is more like being sore after a heavy workout.  It’s good pain that will make me stronger.

On the other hand I have let two trades get away from me: PPC and ADHD.  I am down nearly 20% on ADHD.  What was once a ¾ position has become a half position and I have no intention of buying more.  This Israeli pharmaceutical company trades like complete crap intraday and it’s putting any and all chasers in the ringer for the sake of punishing their gluttony.  I have been punished my whole live for being hyperactive so this feels natural to me.  I will keep taking pain and eventually scratch this dumper for break even.  It is too bad they aren’t cooking stimulants in their lab because that would make everyone more bullish.

PPC is being beaten so other bigger players can back the truck up at lower prices.  This is the overplay for the underlay.  I have never been more certain in my life.  Holding.

LO put out solid earnings and I like where this company is focused.  They acquired a British e-cigarrette business this month and blue Cigs have established a 49% share of the market place.  First-to-market edge FTW.

I can’t trade futures in this salty mood and the only adjustment I have made is buying SLW.  I have a half position and will trade this slowly.

Now I am off to read Department of Energy documents to affirm the LED edge further.  Good day

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Nothing CREE is doing has me frustrated with the company.  I think their team is making solid decisions and I think their decisions are driving market adoption of LED lighting technology.  They truly are the ambassador of LED technology and I think that theme will become more evident over the next few quarters.

They are doing all the legwork to bolster the entire industry higher.  Are they doing it because they are nice guys?  No, they want to make money and the business has a solid margin on their rapidly growing lighting segment.

I still consider the retrofitting of traditional fixtures and bulbs to LED lighting as the greatest business opportunity of my lifetime.  And I have LOTS of lifetime left.  I have nothing but lifetime old chaps, and I intend to make a fortune during it on the backs of industrious men like the leaders of CREE.

I have loosely defined my plan for accumulating CREE.  I really do hope to buy the 99 week exponential moving average.  I intend to buy back in slowly.  See that double top?  That is people like me, but of course with much less conviction, getting high on hopium then Mike Tyson knocked the hell out twice in one year.  They’re on the mat and may not get back up.

Let them die, then feast on their carcasses.

Below my current plan is a throwback to last quarter’s plan of attack.  I succeeded then.  I look forward to doing so again.

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When the /NQ busted loose to the downside I was working an offer trying to board the short bus.  The market simply would not pull back enough to allow me entry into a short.  When I finally did get my short on I was taken for a wild, spine twisting ride higher.  I doubled my short and booked a small gain on the double down and close the initial entry for break even.  At that point, given the velocity of the marketplace, I turned Elroi the trading algo on and went out for chicken.

The more I trade the better I am at having awareness that my edge is dull.  The action today is better suited for my emotionless robot to trade in a very average manner.  The algo may not take any trades or may take some very average gains from the market, but it beats an emotional me executing orders.

I have CREE earnings after the bell.  My position size is smaller than what I carried into last quarter but still meaningful at about 6% of my portfolio.  There was chatter online that CREE is interested in buying RVLT.  I hope this doesn’t happen because I want to see RVLT grow to become the most successful retrofit company in the United States.

I have not felt the urge to swing any shorts this entire summer/fall until today.  Where the market stands, I feel like I need some hedge action so I started buying FXY.  I love the consolidation we are seeing on the weekly chart and should we see risk fly off the table some of it will find its way into the Yen.  Plus there have been big moves kicking up in the currency markets and they have my interest.

It seems the macro picture is morphing a bit this week.

Of course, should the cocaine get dusted over the market again I will likely be back on the chase.

ADHD is failing me and next to go

GOGO needs to shape up

The chicken trade is not dead yet.  May it arise and smash the doubters.

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We are treading water up in the market highlands and when the air is thin thoughts tend to mend together into a blur from lack of oxygen.

I made only one adjustment to my portfolio today, reducing my exposure in CREE to a more manageable ¾ size into earnings tomorrow.  I intend to carry ¾ through earnings and use up to a 1.5 position size to trade my way out of any corrections.  If they gap higher, I will simply buy more shares at a greater price.  However I won’t go full size into earnings because as much research as I have done on the opportunity in lighting, my edge is stronger as a technician.  After the sale, I have about 20% of my equity portfolio concentrated into the LED industry via CREE, RVLT, and LEDS.

I want AIXG again, but I may take a pass because it trades in a ghetto way.

PPC has me 10 percent in the hole on a full sized position after two quick trading sessions.  Sometimes all the fancy timing and indicators get smashed with the gravity hammer that is unknown risk.  How was anyone to know a salmonella outbreak would occur the next day?  The stock has undergone heavy selling pressure over the last two days and it is likely to continue tomorrow.  We are coming into an area I believe to be support.  Should it not behave as support, and buyers do not react to the prices as if they are a discount (a reaction like when you touch a hot plate) I will cut my 10% loss.  Being a 10% position, this trade potentially lopped 1% off my book.  It sucks, but I live to fight another day.

PPC still has to work through earnings on Halloween before it gets into its seasonal sweet spot so it appears I was at least one day early on this long.

My other menace stock is ADHD.  The little bastard stock lacks discipline and needs to be made stronger by correction and medication.  HEAVY MEDICATION.  That will teach this stock to misbehave…talking rubbish about ghosts and imaginary friends when it should be memorizing Bible passages.  No, I have not been watching too many scary movies.

CLNT is set up right to be the next winner in the Chinese lottery.  Shorts, I have one simple question, are you feeling lucky punks?  Well, are you!?

Everything else is just wiggling around, waiting for proper order flow to dictate direction.  The RVLT daily chart has the exact picture I hunt for daily, but I suppose I am partial to the name.  I still have a very large position after all.

I traded the /NQ like a jackass today.  I overtraded and clocked a 22% win rate.  I over traded after writing less is more in my morning analysis—that’s what gets my goat.  Futures trading is all about bringing you A-game and following your plan to the T.  There can be no deviation.

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Let me start by saying I am not thrilled with the action in the S&P 500.  I was discussing this with one of my most distinguished readers, gentleman UncleBuccs.  My chart brain sees lower prices in store before news highs are achieved.

So I did what any responsible person would do when confronted with these “facts” …I bought stocks.

I still have some cash on the books, about 25% which is about the highest my cash has been this year.  But I have a huge position in RVLT, a huge position in ONVO, and a huge position in CREE.  My next largest position is USO because I think oil is just going to surprise everyone and rip tits into year end, taxing the tight wad consumer before x-mas.

Everything else is ¾ size or smaller: LO, Z, GOGO

Then my slow money: F and O

Then a tiny IMMR I keep for sport and this stupid MJNA long—down 20% waiting for a pop to sell into.  It will come.  It is a matter of time not will.

I traded the futures less this week, especially after I got gang banged by algorithms Tuesday.  I took a conservative trade in the /ES yesterday that worked out well.  Today, that same conservative nature caused me to miss an idea I mapped out very well.  Oh well, there is always next week.  /NQ is looking promising as anything I have ever seen—both on a discretionary and algorithmic basis.

About this time every week I am overcome with a huge feeling of gratefulness.  Thank you for reading along.  I love this work and interacting with my internet people.  Have a great weekend.

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Of course the news flow had some merit.  After all there were serious talks occurring in Washington DC, the epicenter of insider trading.  But save me the wordy discussions, I can see their footprints in the walk of price.

Funny to see former Detroit Mayor Kilpatrick getting 28 years in the hole while the Federal government plays budgetary chicken.  I never considered Kwame’s actions worse than your average politician, they only seemed move obvious.  I promise you, the city of Detroit is a better off with Big Meech behind bars a solid 20-something years.

Enough, let’s discuss what happened here today.  We gapped up huge overnight and drove hard off the open.  At that point it was simply a matter of finding a way to grab on to the long side and hold on for one hell of a ride.

We had upside targets in mind and they were achieved before 11am.  These targets were far from the opening print and I thought it may take us all day, if not into the weekend to achieve the prices.

But there’s eager money out there, yearning for another hit.

What worked for me today?

• LED stocks crushed today—all of them.  The industry is on fire.
• Buying GOGO blood yesterday, veddy nice
• Vapor smokes via Newport cigarette maker LO – that is a quality company with a quality chart.  Don’t be blu [sic] if you missed today’s move because it is just getting started.  Nice dividend too.
• Measured move, market profile, and Fibonacci confluence – My most profitable day trade was a four handle short in the spooz.
• My /NQ algo.  It is starting to worry me, it is on a roll
• The mighty PPT

What didn’t work?

• ONVO was quiet…almost too quiet
• Z didn’t make much of a bounce
• Cash, lazy lazy cash

There was a bit of selling into the bell and the waters are still choppy, however cool minds prevailed and top calling continues to be a daunting task.  Tomorrow will be the challenging day after a trend day.  The location of today’s close also precludes chop in store for tomorrow.

Should we not chop, but instead drive higher or lower, it would be a surprise and a reason to adjust your stance.

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“An organ printer, an iPhone with airborne internet access, a real estate app, haptics, and LED light bulbs”

NOTHING!  Not quite.

They are all technologies that will make the coming years exponentially more kickass than 2013.  I hold stock in all of them via ONVO, GOGO, Z, IMMR, RVLT, and CREE respectively.   These are real companies adding value to society.  On the contrary, we have the god damned politicians and their media outlet mouth pieces.  There is no value being created by politics.

And I have no alternative to offer because I never follow politics.  Hell, I have antenna teevee and really only watch Jeopardy.  Therefore I don’t talk politics.  There, I said it.  I know it is ignorant and I cannot care.  I have too much business to tend to.

I was a buyer of stocks today.  I am siding with the robots.  I cut my twitter exposure down to the bear [sic] minimum.  It is too noisy.  My squiggly lines say buy for a quick hit of crack rock and then GTFO, therefore I am doing exactly that.

My slow money is still in place via F, O, LO, and USO

I have that stupid ass MJNA long too.

Cash 28%

Warm salutations,

Raul

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The market kicked into high gear this morning shortly after breaking down out of the consolidation we closely observed Sunday evening.

The idea was simple, and with it, I saved myself from the nauseating task of watching news which is centrally focused on politics.  Instead I could watch price and determine how to manage my portfolio accordingly.

When everything started breaking down early on I sold off all my shares in WLT, FB, AMBA, and BALT.  They were hard decisions to make because I didn’t want to sell any of them, but I knew there were major implications to that consolidation snap.  Also The Fly has been preparing us for a correction rather extensively.  After all of the selling my portfolio was bulked up with over 40% cash.

We are closing on the lows of the day after a high volume, large range selling candle.  Something tells me there will be better opportunities to buy soon and I want plenty of cash on hand.

The seller I was observing Sunday evening seemed big by how the orders were carried about—absorbing buy flow at the offer for a full day.  They just won big time and today’s tape is likely to embolden them.  Do not discount the bears at this junction.

At the same time keep your eyes on stocks that are trading in a microcosm.  Notice how financials aren’t as beaten down as tech.  That’s because they were dogs all last quarter.  We are nearing the time to consider another Goldman Sachs long.

Bottom line: stay cool and get out your shopping lists, but move slowly.

Top picks: CREE and RVLT, my two largest positions

http://youtu.be/JGrGwhoN0K8

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I can do anything.

We sure do cover the /ES_F often over here on the Raul blog, discussing its…implications, if you will.  Building the contextual cake helps me to identify abnormalities, flinches, and hand tips by the big money.   The E-mini S&P is the most liquid financial instrument in the world.  It makes sense to pay attention to it.

But trading it has become a slow and painful grind.  It is like going years without a dish washer even though you love to cook.  You get by, but your soul dies a little every day.

I needed some change (No Obama) so I traded the /NQ.  I like the NQ…peep today’s stats:

Thoughts:

• today had a large range
• /NQ is thinner
• smaller contract size suits my size a bit nicer
• I trade lots of Nasdaq and Russell stocks so I may be concentrating my eggs
• It offers more trading opportunities (at least lately)

/ES has been brain numbing, while I go ‘big pimpin’ on these wiry stocks.  Speaking of which, my book was up a percent today.  That is a result of stock prowess and hanging out with traders much more seasoned then me.  Mainly my gains today were a result of being on the right end of a technology revolution.  So while sour bastards get their kicks shorting Tesla, which is fine, I am embracing the future and finding opportunities to invest in it.

In short: CREE and RVLT what what?

I started buying ONVO too, right about at these levels.  You can’t keep me out of this name.  When my pickled organs give out I want robots around to print new ones.  Seems like a no brainer at five fifty.  I consider it an investment in myself.

I sold YGE.  It felt like when I sold VIPS yesterday…too soon-ish.  However, dwelling on these thoughts prohibits the mind from seeking opportunity elsewhere.  I sold RBCN too, for a loss, because it sort of just fell out after mainlining hot money.  I do not want to be around when the Apple WWDC crowd goes running for the doors, should they do so.

ADHD is a ticker which by design frustrates me, ripping higher like a freshman jacked up on Mountain Dew and Ripped Fuel.  Ah high school…when ephedra was still legal.  I have wanted a long on this one for a few weeks but my attention keeps darting away from it.  Instead I want to Snapchat and play ping pong in the futures.

I do not really love the way we are setting up into the weekend.  The market looks like the headless horseman.  Sentiment sucks but the crowd isn’t always wrong.  I have concentrated by book down to the following positions listed largest to smallest:

RVLT, CREE, USO, LO, BALT, AMBA, FB, ONVO, F, IMMR, MJNA, O

That jackass MJNA stock can burn up and go to zero for all I care.  What a garbage stock.  I am -20% on that field play.  I thought about cutting O about 100 times, but I figure keep it and collect the yield.  My basis is a tad below here.

Everything else I hold close to chest.  As a matter of fact, I need more CREE and RVLT but I am exercising patience.  Together the stocks represent almost 30% of my risk capital.

I will let Q4 play out a bit before getting more risk into those two names.  In the mean time I can increase my LED exposure via VECO, RBCN, GTAT, OESX, and LYTS.

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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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