Another Monday over. The elliptical at the gym is losing the war against me, I keep getting stronger every time. Feel very good, and I think my concentration has become better.
Position Review
Anytime you are in positions you have to review where they are and if the story has changed from when you bought in. The story could be technical or fundamental. Here is my own review of my open 6 longs and with minimal comments. Click on any chart for larger view.
MBFI:
WRI:
CTXS:
PETD:
WLK:
BANR:
A mixed bag, but nothing here gives me reason to sell just yet. MBFI may be the weakest of the 6 at this point.
Almost Friday after first full week at the gym. Ready for the weekend!
Joshua Brown's "Backstage Wall Street" Book
I am sure you all know who Josh Brown, The Reformed Broker, is by now. I have the pleasure of writing the great Tumblr "Things Apple is Worth More Than" with Josh, and more than that he is also a good friend. It's hard to explain all the help I have received from my man over time. It is appreciated.
Josh has a new book out and I am excited to read it. Called "Backstage Wall Street" I can only imagine how raw and open the book will be about all the happenings behind the curtains of finance.
I bought three books and they arrived today:
Nice looking cover.
Why would I buy three? One is for me and two are for public education of course. This means I am giving away two free copies. I need to figure out what the criteria will be (contest, random number pick, etc) but will try to have something figured out for either Sunday or early next week. You want a free book, check back in.
Market Observations
I am not discussing Apple (AAPL).
Like a broken record all I can say is I have continued to see individual stocks perform (screened for of course!) and as long as that is alive and well, I am constructive here. I have 5 open swing longs and that's about as full a boat as I carry in my trading account.
This week saw newer position WLK make a nice move. CTXS, WRI, and PETD have all been good performers. BANR had a big day today, up over 7%:
WAIT A MINUTE!! Isn't BANR a savings and loan? A financial stock? Yes, it is and you may wonder after what I wrote on Tuesday about big bank stocks why I am not a hypocrite for buying any financial. Fair question.
BANR was eviscerated and about destroyed during the financial crisis. The company was in the TARP program and the Treasury sold shares today it still held. Hardly a big money center bank, calling the shots, and being made whole with bonus money paid out like nothing happened. And I doubt the Fed calls BANR executives and discusses policy.
Further, regional banks, savings & loans, and credit unions are one way to get credit moving without all the crap from the big banks. Not really a fine line at all but I could understand some confusion.
About 70 degrees here today, just unreal. Winter has about run out of time. I am not sad to see it go. My eye is good to go, no lasting issues.
Big Banks are a "Dirty Business"
I don't want to spend much time on this topic.
Big banks are disgusting, and their collusion and partnership with the FED is stomach churning. The "Stress Test" results being first leaked then released ahead of schedule is just another blatant abuse of the financial system. Banks and the Fed, in the words of Don Vito Corleone, are a "Dirty Business":
With thousands of stocks out there I have no idea why the rush to buy in and support such crap. Returns, money, a trade bla bla bla boring. No need, none at all.
Market Notes
Today looked and felt for a while like a sort of panic buying blow off top sort of thing. Only time will tell, but I remain open minded. Some stocks I have been in or opened Monday have moved out of nice bases that were very compressed, not just some random run up out of no where. ChessNwine has an excellent study on this in today's market recap: Stock Market Recap 3/13/2012
Here are my open positions and notes. Click any chart for larger view.
Clearly all of these names do not sport vertical charts with no tether to reality. Solid basing, volume in weight, and then price movement. As long as I can find individual setups like these I am not all that interested in the indices overall.
Trading Account Update
No changes in trading positions. BANR was actually green all day today as was WRI. WFM is still holding up well. This morning's selling was a bit more nasty than usual for 2012, but buyers came back in and bought stocks for the second half of the day.
There was plenty of grumbling today about a possible China slow down as well as the Fed coming out via their favorite channel, WSJ's John Hilsenrath, and hinted maybe they are holding off on more stimulus. Not a very friendly mix at all. For now it pays to view market action rather than try and over think what may come of these two important new stories. Keep in mind that money managers have been putting cash into stocks (as noted by The Reformed Broker) and that is unlikely to go full reverse without clear data a slowdown is at hand.
Green Stocks on Red Days
Over the past couple of weeks there have actually been some down days with plenty of red showing in stocks. Down days need not be hated or feared though, sometimes they actually can help you see a new direction.
First off, some disclaimers. This post pertains to a generally up trending market or one that is set in a range sideways. Down trend markets get a few more layers of complication and I am leaving that out for now. Green stocks on red days is not usually a one day event that you can pin a whole trading plan around, but more of a weight of evidence sort of thing. With that said, here we go.
On down days I know I tend to focus most on any names I am long. That's natural and makes sense. Second up for most will be the big "tell" stocks or commodities like AAPL, SLV, or maybe copper and oil. Again, this makes sense and is intuitive.
But on down days, or even better, a string of them the market may hint or whisper where the action may turn up next.
You can skip over any ETF short like a PSQ or a TZA. Funny thing but on a down day I will read how the short funds are "working". Really? I kind of hope so. Also any stock that has had positive earnings news or positive news headlines will merit a question mark as that could be a one day pop sort of thing and may not apply to a general market move. Also keep in mind "safe" plays like bonds, utilities, tobacco, or staples will act more like a weigh station for money and not a new push into those sectors for a longer move.
On "dip" days money will want to get in to names they have missed or names they want to rotate into. I like to think of runs in the market as waves of the ocean, as the power of fund flows pours out on the beach, another wave is right behind riding in the next move:
It pays to make sure on down days you are keeping track of green stocks. If buyers want in even on pull backs it is a clear statement of the desire and direction of money flow. Taken over days should that happen, it is one of the more powerful signals I know of rotation and can point you in a new profitable direction.
For the ultra nerdy you may try to plot buy volume with price over time in something called a Gantt Chart. Used in the professional world this type of layout tracks changes and progress over time. There is no reason why one cannot apply this chart to show sector rotation and stock run lifetime in a cycle over time:
I actually used to make these but have been a touch too busy to keep them up. I need to get back to it.
Messy snow here but commute in and out was no problem. Going to rain all day tomorrow. Dark and grey, dark and grey.
Market Observations and Activity
What's left to say really? Things are stalled out and today there was some beatings handed out. While one of my positions, CACI, was not really near my stop out I cut it today for a -2% loss. I may have been early on this one breaking over $60, or late in a market cycle. Just looked weak and I wanted to lighten up. BANR was in a fist fight at the $20.50 level on high volume. WRI hung around. WFM was the only bright spot, closing strong over the $82 level.
Next week is pivotal if a higher run is in the cards. Market looks tired. Many solid looks that have been performing are at best stalling or at worst going in full reverse. There are some things working, but most I see are earnings or news based run ups. This does not mean a huge bear market is upon us, and I do not believe one is. This sideways snooze fest could go on but it's not worth me chasing names during that kind of market. More on Sunday and will look at more things.
Friday Night Entertainment
Let me see what I can find.
Choose Your Own Adventure Books!
Came across a great post over at Weird Universe that discussed the old "Choose Your Own Adventure" books! I so loved them all when I was a kid. Seems the inventor, Edward Packard, now has them on Apple products (of course!) like the iPhone and iPad. Here are some pictures:
NEVER!
Loved this Abstruse Goose comic from today. In all the realms if disbelief the USA will not adopt the metric system! "Chrono-Synclastic Infundibulum" (click for larger view):
Too funny.
Optical Illusions
Just like the arrow in the FedEx logo is all I see now, after this the "&" character will never be the same:
see more epicfails
Film Clips
Check these out!
One of the best films I have ever seen was the handling of the King Arthur legend in "Excalibur". This clip is when Arthur is saved by the Holy Grail and then leads his knights back out to fight with some epic music on tap:
Ozzy will often start his shows with this very song. For extra credit, what song is this?
The only saving grace for "The Phantom Menace" was Darth Maul. Total bad ass Sith. I can spool the scene at the start of this clip when the doors open and the music plays for hours:
NICE!
Rock Blogging
Music for the masses.
Leading off tonight is a classic as picked by Sal Arnuk of Themis Trading. Open the show with Johnny Cash at Folsom Prison doing the blues!:
I love this performance so much, thanks! Follow Sal on Twitter @ThemisSal
MY friend and fellow 12631 trader Arctic Gambino has really turned me on to the Black Keys. Catch this live show of "Howlin' for You":
Very nice selection. Check Arctic out on Twitter @a_bh_a
Ok, a little something different. Please give this one a shot and listen to the end, it's really too funny! Bryan Bowers and "The Scotsman":
Awesome, yes?
Via Twitter here is my man @CapCube with a request for Weezer's "Troublemaker":
Not bad at all.
Ok, one more chance at the song from "Excalibur" and like I said, Ozzy loves to open with it. Here is "I Don't Know" with Randy Rhoads:
Unreal good. I get chills on this one.
Two left.
I don't know why Hole ended up dying, ok I do Courtney! Plenty of wonderful songs left behind though. How about "Violet":
Love that one!
Last call, grab a drink, a girl, or a stapler!
Turn the speakers WAY Up for Jimi Hendrix and "All Along the Watchtower":
Pretty large snow storm here the past two days. Heavy wet snow, but the roads were in good shape and had almost no issues with commute.
Tomorrow is Friday night, so get those requests in.
Position Review and Portfolio Changes
It's been a more wild week than markets have seen. The drop on Wednesday was somewhat more nasty than anything else seen in 2012. Again, you have to keep perspective.
I was stopped out of the position I had started on Monday in CTCT for -2.8% loss. Looking over the chart the damage to the potential breakout over $32 is not mortal, but a stop is a stop, it hits, you walk.
I have been in BANR since 2/1/12 and as it passed the key level of $20 I was liking it, as it passed $20.50 it looked better and today it was over $21 for almost the whole session and ended right at that level (click any chart for larger view):
Still holding and real buy interest here.
I am still long CACI from Monday. It's still has to prove it can stay over $60 or I am moving on. WFM continues to look solid and closed over $82 today.
I added WRI (Weingarten Realty Inc) as I had a buy order set should WRI get over the $25.20 mark and it did today. The stock was moving well all day until the oil fear induced meltdown late day (will discuss below). Still, the close over $25.20 was my trigger and WRI may get out of this range soon:
That is where I am as of today in trading account.
The Oil is Too Damn High!
"The oil is TOO DAMN HIGH!"
I was going to try and make a technical case on oil prices and the general stock market, but why? It's common sense. The oil is too damn high!
Late in the day after some real equity progress Twitter went aflame with oil price quotes. The run was insane and high oil prices are not good for anything, period. There is no way to contort that one data point any other way. Whether a Saudi Oil pipeline was or was not sabotaged or had an accident, oil going higher will cap equities in my opinion. It is so like Iran to do something like this, so I do not dismiss it out of hand. Still, some level of speculation has moved into oil, was it the silver crew moving on?
It's a mess but what I know is if oil continues higher (my man ChessNwine has a great technical case here that it will) only the best set ups and best behaving stocks will be kept or considered.
The Daytona 500 was rained out yesterday and is being run tonight. Clearly I will be a bit distracted so just a quick post that is chart heavy for tonight.
Market Operations
This morning's sell off just did not feel like it was going to stick and pretty soon after the open buyers stepped in. After things settled in this morning I opened up 3 new long positions.
WFM (Whole Foods Market)
I usually don't enter into names I see all over Twitter and other places, but the long term 2006 top for WFM is too interesting a spot not to try out here. Click any chart for larger view.:
CTCT (Constant Contact, Inc.)
I saw this one over in the 12631 trading room as worked up by ChessNwine. Tight basing after a breakout over $30, has some room to run higher:
CACI (CACI International Inc.)
I found this idea on a PPT screen. Great buyer interest and stock has moved past the $60 level here:
I still hold BANR but it's putting me to sleep and will cut soon if the stock fails to move.
A mix of names for this week.
When I was doing my screens I noticed a large number of utility stocks making up the accumulation list. Some of these names are seeing buying numbers that are even larger than during the height of the summer doldrums. A couple I found: NEE
D
There were about 4-5 other names that looked the same in the same sector. This screen tends to show accumulation before price moves. Why are "safe" plays like utilities being bought more aggressive than any time since the summer? I am not sure, but it's worth watching the rest of the week.
Only had 3 days so far of a 4 day work week, but still feels long! Alas, tomorrow is Friday!
This does mean you need to get Friday Night Entertainment blog requests in on the comments or over Twitter.
Market Operations
I sold out of AREX today from my buy on 1/31/2012 (Great work up on this one by ChessNwine, thanks!). Gain was +6.4%. There is nothing really wrong with the chart or the name, now that I am out it may well run higher big time. I have held the stock for 3 weeks and was ready to move on. Also, have been working on some screens that I want to direct more capital towards. Here is a look and I had a target on this around $41:
Good stuff.
Work in Progress
As the markets change, one has to adapt as well. When I re-entered the trading scene and mindset at the start of 2011 I was focused on bounce plays and oversold rebounds as the market had been very aggressive finding things of that sort to put money in. It worked well, for a while. After the Japan earthquake disaster things got much more difficult and the market sped up the tempo finding moving stocks then walking away. Rotation on an almost daily rate. Difficult to trade from a longer time frame (days- to 2 weeks is my trading window). Then the summer came and while shorting did not work in my trading account, things were very dicey.
By the end of the summer a new trend emerged and that was strictly watching overbought/oversold conditions as markets moved as one to each apex and bottom almost weekly. Some longer runs up and down formed, but by the time you could trust them, things changed.
2012 has been a much better environment. The start of 2012 has been a great time for many, and I am included. Patterns are going to end points, accumulation means something, the nerves have been assuaged.
And so things change again.
I have been noticing that many of my screens have been seeing stocks with excellent returns. Problem is my homework nights over the weekends are not finding the stocks moving in the week ahead, but a week after that or more. But they are finding great results and leads. I have a few screens built inside the iBC PPT that are working, but my timing has been off.
I see this as a good thing.
Instead of recklessly plowing into anything moving, larger money is back to scoping out a position, layering in, and holding on. This takes time and commitment. It is a huge positive for the market going forward.
As such, I want to try and work on these screens and ideas and allow them more of my focus. I have been testing plenty of the screens and I would be doing well had I allowed a touch more time for setups to both fully form AND stay on my radar. Maybe I am used to the hyper active turnarounds from times past, but I am dropping things from my main gun sights and that lag seems to be what's needed.
Never fond of Monday's but today was not actually half bad. Tonight I can access and use Twitter on my mobile phone but I cannot use any of the buttons or post tweets on my desktop computer. No one seems to have much of an idea about this. If you can help, email me or use the comments section.
Position Review and Thoughts on Rotation
I have been long a few stocks for a while now. After a few down days and some positive market movement today, it's a great time to review all 5 and see where things stand.
AREX
Opened a position on 1/31/12. The setup was a long intact uptrend and a move over the $34 range which was anew breakout area. Today's chart:
AREX had a crazy day on 2/8 and hit as high as $38. Since then it has tailed off and now is retesting the "scene of the crime", the breakout level just above $34.50. A successful touch and hold of the 20 MDA is supportive of this name going forward. That said, the stock has stalled out here.
WTS
Opened a position on 1/31/12. The set up here was a clear move out of a very tight basing channel. The accumulation volume had been excellent as well. $38.50 was key zone to clear. Today's chart:
After touching $40 this name has cooled off a bit. Volume has dried up on the downward move and buyers returned today. This one is still set up nicely for a move higher.
BANR
Opened a position 2/1/2012. To be fair this should have been stashed in my long term account. I have every indication that BANR will cross up and over $20 and run, just maybe not soon! May have been a little early here. Today's chart:
This one actually did close over $20 on 2/3 but since has fallen off. On the positive side the small gap from 1/25-1/26 has been closed and buyers returned today.
BCR
I worked on this one with a friend a while back but I missed the fireworks around 1/20-1/23. After that I was playing resolution of the bull flag as (opened position on 2/8/2012) seen in today's chart:
This one caught a price target upgrade the other day and thus a price and volume spike up. Right now it is facing serious price resistance at about $96. Above that and it's a "$100 Dolla Roll".
KFN
Opened a position on 2/8/2012. I had worked on this chart (and about 10 others) the night before and I just liked the action so I bought a spot. Today's chart:
The buyer accumulation has been outstanding for this name. The price has cleared the breakout level of $9. A bit of a pause here right now.
So all in all the 5 are not bad open positions nor in any real trouble. So what's the problem?
How many times did I use the words "pause", "resistance", "cooling off" in the selections above?
Even on market down days many names have been running well. Granted I tend to stay away from the hottest sectors (biotech, solars, chinese egg rolls) but many other things have been moving. The 5 above had real momentum coming into where I bought them, yet have slowed down.
So it could be benign reloading and the age old "resting, wants higher" sort of thing. Hopefully that is what it will turn out to be.
On the other hand there is another side to rotation of money, especially at the upper ranges of longer rallies. That means when things are moving they gather interest and steam, but as soon an it stops (resistance, news, etc) money moves along.
I think most understand rotation as it relates to sectors. Money leaves bonds say and goes to riskier assets. Buyers may walk away from the utility sector and instead chase semiconductors higher. That's well established.
What I am seeing some signs of (not absolutely, not definite) is buyer rotation from a binary choice: moving vs. non- moving.
There are some good examples in the names above and some others on screening names I have saved. Be aware and keep an eye on your positions. If they have been moving and see a pause, it's important they continue to keep moving. If they are supported by strong technicals and the momentum has been there, a walk away from buyers may mean you are holding a "non-moving" name and money will be rotating out. I may have a few in the above names myself.
