The numbers do not quite catch the headlines like social media M&A, but don’t look now because the RVLT land grab continues. They announced this morning the purchase of Value Lighting Inc. from Georgia. Now they have a pipeline to the rapidly growing multifamily retrofit business.
Note: RVLT is my largest position and I am in no hurry to change that.
You knew it was bound to happen. You knew CREE cannot spelunk after ever single earnings announcement, right? To be honest (and we keep it honest in the humble world of Raul) my feet were chilly to the thought yesterday too. I went into earnings only half sized. Do you know where I was most certainly not reducing LED exposure?
In LEDS, in RVLT…the “party rock”
I floated some statistics about CREE stock behavior during and after their earning’s announcement on the pelican stream. They were rather interesting, really. They are free, too, in case you are wondering. CREE only trades higher 44% of the time after an earnings announcement BUT the session after an earnings announcement closes higher than the open 77% of the time. Hence, therefore, thus…one does not simply trust CREE through earnings.
Quite the contrary, you instead hunt an entry the next day. I bought CREE after it gap filled down and was trading BELOW where it opened today. The deck was stacked for your boy Raul. I made it a full size position, market order like a glut, and the rest is history. They I bought OESX at the low of the day.
Do you see what I did here? I completely pwned the LED trade, live on the interwebs. I am not exactly dancing the tapioca over here yet. My book is 25% concentrated into the LED industry as of the bell. A concentration some of you may perhaps deem mad.
Let me ‘splain something else to you. SINZO ABE will not be instigating any wars in the Far East. He took center stage at Davos proclaiming these words. He instead intends to lead an industrious nation and keep his battles economic in variety. This is very good news for the LEDs we love because most of their tiny components are assembled the laborious hands of China men and women.
Thus I am pressing the envelope with my LED exposure, and I intend do so until I see the whites of Thomas Edison’s eyes—live from the land of the dead. That last sentence makes no sense whatsoever. I possess the will of a madman is what I am trying to convey. Just be aware.
I have lots of other risk, side bets if you will, companies whose goals are all centered upon intelligent humans making more intelligent decisions. I could go on, but I have already said too much.
Take time to enjoy the traditional lighting around you if this is something you hold dear, for soon it will be only a small piece of your nostalgic pie.
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.
The buyers rolled out the cavalry early on, buying up the indices, only to retreat after an hour of progress. I heard (read) several seasoned traders speak of a subtle change in the character of the market these last few days. I like to go heavy on context work because these subtle cues come from the footprints of the marketplace.
We need to understand what timeframe is in control on a given day. By establishing what timeframe is in control, we can decide what reference points become important. The drive higher early on looked like the long term timeframe taking control of the marketplace but we later learned that was not the case. The rest of the day we faded the early strength, a slow move lower controlled by the day timeframe sellers. Intermediate term we lack a clear victor and are instead experiencing balancing trade.
In summary: Long term – buyers firmly in place, intermediate term – balanced/two way action, daily control-buyers, and intraday control – sellers. PPT nailed a swing low for now, which is always fun(d), now it is a matter of building upon it or sellers blasting through it with old school scud missiles.
When we land our hot air balloon in the thick forest and begin investigating individual trees, we can see risk still being engaged in the marketplace. Alternative energy plays caught a bid. Solar stocks started seeing some inflow after an orderly, mind you deep, pullback off the recent highs. These issues will be interesting to track into year-end as to whether they can put in a higher/tradable low here. I am long FSLR and YGE from higher prices, -9% and -15% respectively.
I thought I was getting cute last week, selling off my “bottom shares” in RVLT. You know, the ones I bought at the beginning of September for two fifty. Lo and behold, RVLT rips higher after signing a contract with the Navy for 17,000 LED tube lights. This is one of those deals that seems big, but in the grand scheme is really small. That type of installation however, could yield over 200k in profit margin given the company’s current revenue structure. I think the market excitement comes from the hope that this is only a primer deal with more potential deals in the pipe. Investors.com also published an LED pumper piece Friday evening which may or may not have contributed to the inflows in LEDs today (h/t @randadtrade).
However, you did not need to know about the pumper piece or the Navy deal to get long RVLT last week. No friends, you just needed sentimental confidence as was on display by iBC comrade @Eliza_Mae_iBC who spoon fed the trade in what he called the “holy grail” chart setup. He shared his thoughts after I sold my “bottom shares” like a jacked-ass. Fortunately, I still was ¾ sized into today move. Even Raul, faithful to the LED tech, became discouraged. I bought more CREE this morning to repent for my loss of faith. Side note-yes, Twitter is useless. You should believe what these analysts tell you. You would not want to encounter likeminded people who engage in real-time, money making conversations, I know.
I still like my OWW shares, as they do absolutely nothing but go sideways.
That’s all that was done. I was up 1.75% today. With a little bit of market cooperation, I just may hit my annual target.
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
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:
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.