The selling continues this afternoon, with sellers continuing their blitzkrieg campaign with a 2pm algorithmic shock wave. A block trade like the one we just experienced at 2pm is a way of starting a siphon—the algo sucks on the tube with the intent of motivating atmospheric pressure to move liquid(ity). Once it starts the flow, a force of equal or greater value must arrive to stop the force.
There’s nothing wrong with sell algos, they just receive more criticism then buy algos. They are both attempting the same feat.
Keep the context of our market in mind. It is mid-December, we have had a huge run, correlations are low, the long term trend is higher, risky assets continue seeing cash inflow, and sellers just controlled their first week since mid-summer.
With that in mind, and despite my extensive coverage of the indices, I think it is important to keep your focus on individual setups and how they are behaving.
My book is going out 95% long after purchasing OWW today at the top tick. I have other names of interest, including LEDS basing just below one dollar.
My AMZN YOLO lottery ticket was a loser. I risked the entire premium because it was a lottery ticket. It had a moment of hope early on, but could not breach recent overhead supply. The trade needed more time than one day. I realized this soon after taking the trade, and was discussing how TSLA would have been a more prudent YOLO…if there is such a thing.
I never grabbed ENPH yesterday. Instead I just watched it and commented on it. Now I cannot buy it and it can likely go much higher. I simply lack to conviction to assume nearly 20% more risk.
My book of stocks spun donuts in the mud this week even though I have winners among my ranks. Here’s the book, largest-to-smallest:
BALT, OWW, FSLR, GRPN, TSLA, YELP, RVLT, YGE, Z, LO, WBMD, GOGO, CREE, F, and my bane MJNA.
Final word of on the market – this looks like discouragement phase, where the market makes an earnest attempt to steal away your favorite shares. Review your risk plans, make adjustments where necessary, and stick to them. Do not assume gains are guaranteed.
It turns out the NASDAQ printed what is called a normal day in market profile theory and the fun thing about normal days is they are anything but. In fact, they are rather rare.
And I must say I do not particularly like normal days, at least not up here at swing highs, because they tend to occur at or near inflection points. A normal day is described as having a very wide initial balance (first hour of trade) which is not breached for the remainder of the session. It suggests indecision, intraday, mostly signaling directional conviction is low.
That context makes sense if think about gapping higher, in a hot (too hot?) bull trend, into a short holiday week. Short sellers do not want to get steamrolled in the thin trade, buyers are hesitant to initiate additional exposure at these elevated levels, and current longs are likely mulling taking profits.
Add to that the narrow pockets of market momentum and you have a solid recipe for indecision.
I have my book about 90% long at this indecisive juncture. AMBA finally went to work, crushing the hopes and dreams of Morgan Stanley analysis hoping to make a name in the technology space. I like to think this guy who downgraded AMBA will read the Raul blog, so I have a special message for him: this chipset powers the GoPro, it is on the X-mas list of every adventurer. Short interest, albeit modest, will start to get icy hands as we approach December 5th earnings. Then they will start making mistakes.
The chicken trade adhered to the November seasonality statistics, naturally, unlike the unnatural meat produced in PPCs new streamlined robot facilities. December brings a tad bit more seasonality mojo, and we still have national eat 1-to-3-birds-at-once day Thursday. I took an obligatory 1/3 scale today, but I like my prospects with the net.
I bought AAPL back right near the closing bell. If you recall, I was in this trade a few weeks back and bailed with a little 2 percent gain. It is an easy vehicle for me to lever long exposure up and down, as it consolidates along gently.
I now hold large positions in the following names, listed largest-to-smallest:
GOGO, RVLT, BALT, YELP, and CREE
These are all full size positions. As you may imagine, this type of book requires attentiveness. It has the capability of lopping 10% off my person rather effortlessly.
My ¾ size positions are as follows, listed again largest-to-smallest:
AMBA, AAPL, PPC, LO, and TSLA
Note: AMBA was by far my largest position prior to taking a scale near today’s high. Tesla and their innovative CEO Elon Musk are in the house of pain. Much like any successful individual, the media will frame Elon with a skeptical eye. Innovators hunt profit and self-gain after all, which is inherently evil. The issue most closely watched at TSLA is the battery technology. If it is to usher in the era of zero emission commuting, it needs to hold up to rigorous scrutiny. If Telsa intends to roll out a model for the middle class, they need sound battery technology established. The chart is just basing out, below my favorite moving averages, suggesting acceptance of these lower prices. What likely comes next is a new exploration lower by price. This will scare most of you. But I will be casually observing the action, minding the drawdown to my books, and meticulously selecting an opportunity to ratchet up exposure because I love me some sweet baby Elon.
I have dog and pony positions in the following stocks. These positions are practically placeholders and some are relics from prior trades:
F, FXY, ONVO, TWTR, MJNA, and O
I thought I would turn a clever trick in MJNA. Now I am -40% on this stupid, STUPID, holding. It will enjoy a fake pump service or go to zero otherwise I will continue to hold this dumbness.
ONVO needs to die for a while. It trades poorly. I will keep my toe in the water to keep my eyes on the name.
TWTR is another name I will hold until zero. I use twitter more than any other social media service in the world, why wouldn’t I own it? One day I will have huge size, but right now there simply is not much to base my risk on. Therefore I wait.
This post has gone on far too long. These are my holdings and some reasoning behind them. Let’s see how they perform this week.
Today the old man woke up at a customary 4am, sans alarm clock, and slowly rose from his twin-size bed positioned appropriately across the room from his wife. He prepared his straight razor with smooth swipes across the grit of his sharpening belt. His thin lips held onto a cigarette as he removed any trace of facial hair with a generation of confidence. He swung the washroom door open and emerged from a thick cloud of smoke in a Tom Ford suit and said, “I want Cisco.”
And so went the day. Old men across the nation dialed their rotary phones and demanded their brokers buy shares of CSCO, in 1000 lot increments, until instructed to stop. The action firmed up the Dow Jones as well as the S&P 500.
We are only 10 points away from the 1800 market on the SPX and I am 95% long. There was a mix of winners on the day. The peddlers sold down GOGO today after an impressive gap which is to be expected from the degenerate class. Meanwhile ONVO ripped the hearts out of shorts and fed them to the pigs.
The chicken play in PPC is setting up finally, and if we close the week out strong prospects look solid for a rise into the gluttonous festivities of Thanksgiving.
Facebook wants needs to corner the sexting market. Without it, they are vulnerable to rapid extinction due to lack of attracting teenage use. On the contrary, teenagers are smoking LO’s Blu brand eCigarettes at a growing rate. LO is winning over the next generation of smoking class.
I am completely out of energy, here’s my book:
AMBA, PPC, AAPL, GOGO, RVLT, TSLA, LO, YGE, WLT, SFM, BALT, CREE, F, ONVO, FXY, TWTR, MJNA, and O
Many of those are partials. The main size is from AMBA-to-WALT
My Halloween was a rather non-event. A few children came to my door demanding tricks or treats and I drank one mug of cider and rum. It took a while to unwind yesterday’s action. I played it though my head a few times, remembering the subtle moments when the market gave me a little wink.
Then today came. I anticipated sell flow on the S&P which led me to offer three scenarios that emphasized sellers. But I never felt confident on the short side intraday. The moves were too unorthodox according to my practice, and I could tell I was out of my element (Extra Donny).
Come 11am I started selling down my long exposure a bit. I trimmed where I could selling parts of my LO, GOGO, and BALT. Something about the AMBA bounce did not sit well with me so I scratched this position entirely. I know flip-flopping can frustrate spectators, but some of these positions require confirmation for me to stick around. AMBA stalled and after I gave my book a hard look AMBA stood out. I still like the stock.
My two largest positions now are PPC and WLT. This is completely unacceptable. A young gent like me should not have size in stupid chicken and coal interests. That is plain vanilla dumb. I want my size in places like GOGO and Zillow and FaceBook. You know, new companies.
Fortunately I have these TSLA shares. I was so excited to finally own TSLA shares that I exclaimed the news to friends. I have no idea what has me so god damned excited to own TSLA shares. Of all the positions we go through on a weekly basis, I have never excitedly told friends about any. That being said, I should probably just sell the stock now because I am way to enthusiastic about it.
I boosted cash up to 25% into the weekend because I am sticking with the theme that a large seller is at work in the S&P futures market. Until that seller slips up and loses control, I am keeping some cash to buy up your margin liquidations. Individual stocks are still working though, much to my dip buying chagrin. October did not have a “day of terror” where everything goes on sale.
Ladies, gentlemen, please…allow me a moment to address the market.
You may not make it down to the Raul blog often, but I reside rather gingerly on the front page of iBankCoin. I know that my continued existence in these hallowed halls amongst the finest strangers the internet has to offer depends on one very important matter: banking coin at criminal rates.
After exhibiting complacency two weeks ago Friday I have been on the receiving end of a severe bludgeoning via shares of PPC due to a salmonella scare. I regret to inform you I was forced out of this position today and took a large loss. Let’s talk about large losses.
This was a ten percent position and I stopped out at twelve and a half percent. Math:
0.1*0.12=0.012
I lost 1.2% of my account value. Part of me wanted to ride the stock into earnings for the glory. I envisioned myself riding into town on a chicken-drawn chariot with plebs laying olive branches on the street. Upon reaching to town square I would be handed the ceremonial staff to perform a blessing of the populares, restoring balance to the social classes.
But in a rather stoic manner I cut the shares loose. Because the truth is public perception is fickle. Many of you are simple, as am I, and lack the resources or time to give a company a full fundamental shake. I know inputs to making chicken meat are down across the board, but so does anyone else who analysis this company. Elon Musk set a new standard with his quick assessment and public response to the Model S fire and now I expect the same from all companies. I get Old Wall Street silence instead. So PPC and its shareholders can go fly a kite for all I care and I’m back in the sewers, hungry as ever.
I cut LEDS too. Perhaps the critics were fiddling with their catalytic converters when I scaled 10% profits one day into my campaign. That would justify tossing tomatoes in my direction when I cut my net position for a scratch.
Finally, I cut SCTY. Let’s say you love bath salts but all you can find on sale is old fashioned Mexican speedball. You decide something is better than nothing and in your constant urge for instant gratification you gobble like ten Mexican speedballs. But since you want that bath-salt-bug-eyed rage fueling your body while you chew arms off hobos, you find the speed only providing an uneasy feeling in the pit of your stomach. That’s why I cut SCTY for a 3.4% loss.
My final move was buying a modest allotment of AMBA shares. Morgan Stanly flip flops and the investment community dumps Ambarella? GMAFB. Well actually, you did give me a break because this was an opportunity to get back on board stock in a great company. I liked it at 22, why wouldn’t I love it at 20? I am a buyer of further weakness.
Now I have 22% cash power to buy some blood and a stable of stocks fit for an entrepreneur. Largest-to-smallest friends, largest-to-smallest like always:
GOGO (huge), LO (+15% what?), ONVO, WLT (Walter), RVLT (a love/hate), AMBA (SAIL!), SFM, CREE, SLW, F, FXY, IMMR, MJNA, and the big O
That is a hot look. I like this basket of stocks. I have a few names I want to add to the pot to get back to full long exposure but I am content to ride into tomorrow’s spooky trade with some cashish. The Fly’s ALJ has the look, FB is making ATH after hours, and YELP is at a slight discount.
FINALLY: YOU SHOULD COME INSIDE 12631. There is a free trial tomorrow and Friday ONLY. I do my best work in there with little-to-no shenanigans. I would love to see some of my twitter buddies in there. The password for the free trial will be released at midnight, so you vampires can come inside tonight and kick some ideas around and us normal folk will see you bright and early.
There are crazy moves, both ways, going down in this market of stocks.
Early on we had a pretty solid read on the Nasdaq and S&P and we were talking through the psychology inside the 12631 pay wall. I trade little blips in the gyrations of the NASDAQ and my current goal is not to earn money but instead to consistently identify, trigger, and manage one trading picture. I have set the lofty goal of being right 75% of the time. This is for me to prove TO ME that I have the fortitude to trade futures before committing adult money to the venture.
But I was watching my move play out and I started noticing excessive aggression from the sellers. Have you ever walked up to a girl and started talking game only to quickly find out her husband or boyfriend is close in tote? Said boyfriend often puffs out his chest and behaves like a primate because he feels threatened. This is overreacting and once it happens you can almost rest assured you have won…something, life, the momentary affection of the women, whatever. Market participants do the same thing all the time just before they lose. The more you watch the tape, the clearer it becomes.
Anyhow, sellers started acting like scared bitches just before eleven and the S&P was trading up into the key battle linehighlighted this morning. This is what had me buying WDAY and WLT. I got in before the pop and used most of my money doing it. I am now 95% long and uncomfortably so.
So I went into my portfolio and tried really hard to find something to sell before the market makes me sell and I came out empty handed. I know, it is completely negligent to be 95% long way up here but I cannot justify selling any of my positions where they stand.
I honestly feel as pickled into a catch 22 as I have ever felt in my trading career.
Off topic: I have sustained myself on water and candy ONLY today. My eyes feel like they want to explode and gush sugar all over my keyboard.
Not chocolate nutty candy either…just the crack: taffies, lemon heads, now and later cubes, dubble bubbles (apropos), and jujyfruits.
Gallons of water.
Somebody convince me to sell one of these holdings, largest-to-smallest:
ONVO, PPC, RVLT, USO, LO, WLT, GOGO, ADHD, CREE, WDAY, SLW, F, LEDS, FXY, IMMR, MJNA, and O
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.
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.
Thu Oct 3, 2013 5:03pm ESTComments Off on I Am The Lizard King
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:
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.
Fri Sep 27, 2013 5:20pm ESTComments Off on Too Smooth
This is your Capitan speaking, the time is 5:01pm and we have touched down on the gap and the weekend. The skies are sunny and I hope you enjoyed your flight. I want to thank you for flying with us and hope you enjoy your stay.
It’s scotch thirty…
I let the instruments bring us in the weekend, flying IFR and letting the machines do most the work. Speaking of machines, my jackass helper robot Elroi took one trade this week and it lost money. I suspect he has been too busy courting the modified Siri to trade. I intend to cut his binary unit off should this insolence continue.
We went on and on ad nauseum about the value area developing these last 36 hours and we formed the hypothesis that a move lower was in the cards but not to read too far into it beyond forming the proper boundaries of a quality auction. Check out the final product, I call it Da Vinci’s brush:
I catapulted my book 7% higher this week and still managed to end the week with 18% cash in the hopper. I made all of this alpha while the market dicked around and formed Da Vinci’s brush. I dicked around inside that auction too—trading futures for better or for worse. This week it was for worse.
I struggle to follow rules because rules are structure and I enjoy living a fringe lifestyle. But I am telling you as sure as I am sitting in this Herman Miller that rules form the foundation to good decision making. I have good rules backed by 100s of computer hours and old school back testing—gifts bestowed upon my person by the gods of large numbers. I need to stick by them and stop dicking around. In short, I am spinning my wheels in the mud, again, trading futures.
In the meantime the in between time I go out and earn 3x my losses trading MHR. I told you pimps there were pumps ahead for the explorers. END is next, watch it rip next week. As for YGE, in one way shape or form the fine scholars here at iBankCoin have rammed this ticker into your frontal lobe. Hot damn I spanked it out of the park this week again, nailing a perfect entry, scaling off a third, and now letting the rest ride. Target? You should be asking about my target because entry is only half the battle.
Ten twenty five.
Today’s moves were to cut CLF early, cash in some MHR later, and buy more LO FTW.
Is the government shutting down or something? I just trade these charts.
