Carl Icahn. You are the man. I love you. You just put the bottom in for $AAPL. Let's make some big money now.
Carl Icahn. You are the man. I love you. You just put the bottom in for $AAPL. Let's make some big money now.
It's been a while since I've thrown up a new post. Call it too busy at work/moving/no internet/whatever you will. The purpose of this post is not to update with my thoughts of the market but rather my thoughts of lately. I have been extremely focused upon receiving a professional engineering license so I have decided to further allocate my resources towards that instead of writing blog posts every day. I will still continue to write them if and when I feel perturbed about a hot topic issue.
One issue I currently have is with Internet trolls. I have done my fair share of trolling but man oh man, reading some StockTwits streams can really put things into perspective. I understand now why people such as Doug Kass got off of Twitter. It is hard to have a large public following and people holding you accountable for every single move you make. That is just one of the repercussions of the evolution of social media.
I was on a particular StockTwits stream last week and made some extremely bold calls. I'm not going to mention the stream name here for further fear of being trolled upon even further (If anyone reads this they will know exactly what stream it was). Basically 2/3 of my predictions came true and the third was ever so close to happening as well. Yet, people hang on EVERY single word literally and attack me because I wasn't right. So I am automatically labeled an idiot. They would rather complain that I missed the 3rd call which was less than a 2% move but rather nailing the 20% down move I called days earlier. It's too hard to deal with those kinds of people. I'm over it. It's just a waste of time to argue with them. I'd rather do something better with my time like engineer shit and make money in the markets. Or like 50 cent once said: "Go ahead and switch the style up, and if they hate then let em hate and watch the money pile up."
I was watching the NBA Finals game with a group of friends last night and one of the guys had the Galaxy S3. I'm not here to dog on Samsung, I actually believe it is a great phone and easily the best competitor to the iPhone. But, I will still stick with iPhones as long as they make them. And with the new and improved iOS7 coming out this fall I am even more hooked.
So we got in a heated debate about bigger screens and other features. I just do not get the bigger screen. And I am not just saying that because I am biased for AAPL products. I am a pretty big guy, I have 8" hands and can still dunk a basketball (humble brag). I hold my iPhone specifically in this way as do a lot of other people: For right handed people, the bottom right corner is setting firmly in the center of the palm. The pinky is underneath the bottom of the phone and used for gravity support. The index, middle, and ring fingers are spread evenly across the back of the phone. The thumb is used solely for scrolling/hitting buttons etc. I can do all of this with just one finger and reach everywhere on the screen without having to switch my grip.
All of this might seem juvenile until you actually pick up the larger Samsung phone. Even with my 8" hands I have to hold the phone with two hands just to reach all of the buttons. I'm not trying to play a damn first generation Gameboy. How annoying is that? To me it is extremely annoying because I need that hand for other things, like driving (just kidding, don't text and drive).
I'm not so sure that AAPL will create a larger screen phone. Even TC said during the last conference call that they would not sacrifice quality for quantity. As an investor, I think the larger screen may benefit their stock more but as a user I do not want a larger screen. I think the iPhone 5 is the perfect size, and I hope they don't deviate too much from this design in the future. Even if they do, I will still stick with their products over any of their competitors. I am stuck in the AAPL ecosystem and I love it.
Sometimes this market can make a trader feel like slingshotting a watermelon directly to the dome. A perfect example was yesterday for the bears. I had checked the short term oscillator in the morning and it was resting at -16. A hugely oversold number which hasn't been seen since the end of March. There were exactly 37 buys on my list for the close. I knew only a handful would remain buys by the end of the day with the market being so oversold. By the end of the day, the market rallied right under 2% from the lows and 36 out of the 37 buy setups had been ruined. CHKP ended up being the only remaining buy yesterday.
The oscillator which provided you the slightest chance to buy stocks went from -16 to -3 in a day. That is a big move. I prefer to do most of my buying when the oscillator is extremely oversold like that. It does not work the same way by shorting when the oscillator is overbought.
I haven't been watching too many key levels but I would take notice of this trend that I've noticed lately. On the 30 min chart of the DJIA, the 200 period moving average was acting as support at the end of May but since breaking has been providing resistance in multiple occasions throughout June. Look for a breakout above this for more upside or as resistance for more opportunities to get short. It has already traded off 0.5% this morning after hitting it again.
FB is the only buy on my list today and I may take a stab at it at the close. The oscillator is sitting at 0 right now so it's anyone's guess where we go from here. Could end up being a flat Friday. I will sell BRCM and QCOM if they close up today.
With the wind. Who'd a thunk it? The market actually closed down on a Tuesday. More specifically the DJIA since that was the one with the longest streak. Today was the worst Tuesday the markets have seen in half a year and it was only down 0.5%. Laughable.
I saw in a/h that apparently Meredith Whitney and Nouriel Roubini are now bullish and "Equities are an incredibly safe play here." Go ahead and add this to your "Why we are at the top" list.
The game plan for tomorrow: ADP numbers and ISM non-manufacturing reports. I'm not too concerned with the ISM report, even the lower estimate is about 52.5 which is still not a decent number. I'm more worried about a miss on the ADP number. Like I've mentioned earlier. Bad is good. So the key (if you are bear) is that the ADP number misses, but not too much. Just enough to keep people wondering if it was good enough for Fed tapering talks to start again.
The market really is about weighing a couple factors against each other with a multiplier. What that multiplier is? I do not know. Here is what you are weighing against each other: What is more bearish for the stock market? Bad unemployment numbers or Fed tapering? Contracting manufacturing or Fed tapering? Trade deficit widening or Fed tapering? Low/stagnant GDP or Fed tapering? Companies lowering guidance or Fed tapering? Slowing global growth or Fed tapering? You have to weigh every one of these against the Fed. They say don't fight the Fed, but if all of the factors are saying that you need to, I'm not going to tell you not to.
This market is extremely difficult. We have seen 1-2% moves consistently for the last 2 weeks. It is not easy to navigate this market. When a correction or the next leg up happens, it will happen quickly. Get ready because I think the choppiness will continue to occur throughout the summer.
In portfolio news MYL sucked a fat one today. AAPL outperformed slightly which is helping my short general markets via DXD/long AAPL "pair trade". VRNG continues to get whipsawed around by every Joe Blow who writes for Seeking Alpha. And Obama hates patent trolls so that's not going to help their future cases either. It's okay though. Tuesday's gone.
What kind of world do we live in? I feel that we middle to upper class folk like to view the world through rose colored glasses. I hate the fact that bad is good. Take this mornings ISM reading of 49.0. The lowest reading since June 2009 (Don't worry, next month's wont be much greater with the new orders and backlog ticking down as well)! And what did the market do after that, at least initially for 30 minutes after the report? It skied upwards. And for all you people who actually pay attention to the market everyday you know exactly why it did that and so do I. QE4EVA. There is no mistake about it. Our markets are manipulated, pure and simple. We need QE to survive just like our obese children need to eat cheeseburgers and fries every meal to survive.
Japan is showing us a glimpse of what will happen if the QE milk teat will finally be taken away. It has been getting pounded mercilessly. But, to be fair, it is still up about 28% this year. Since the relative prices of the Nikkei and DJIA are similar, I think it is fair to use it as reference. Could you imagine if the Dow fell from 15,000 to 13,000 in only two weeks? Boy wouldn't that be fun. I wonder who the finger would be pointed to then? Nothing frustrates myself and other traders more than when you know something is bad but everyone else refuses to acknowledge it. It reminds me of the housing top in 2007 when a handful of people knew that housing was going to collapse but they kept losing month after month by shorting because everyone ignored the signs.
Now, before I get too bearish here, let me point out that tomorrow is Tuesday. This means that I will be looking to pick up 2 longs before the close and dump them within the first hour tomorrow on a potential gap up and fill. I am setting my eyes on SBUX, SIAL, ROST, and MYL. These buys will be updated at the end of the day. I will continue to hold my DXD, and will probably switch to QID soon after I break even on the trade.
The markets are in full retard mode this morning. It's another buy everything because it's Tuesday mentality. I thought the panic in Japan would have maybe filtered over into our markets this morning but by the time I checked it again this morning the Nikkei rallied from the gap lower and trended higher all day. Our markets are set to open up near 1% and probably rally even more after we get another huge miss from the Dallas Fed again.
I've been sitting in no man's land for a while now. The market continues to rip higher so I continue to hold core longs but add to shorts on the way up. I am only looking for about a 2-3% pullback to take profits on those shorts to break even but my position has been getting much larger seeing as this bull has been very stubborn.
I need to start updating my blog more but it is hard when there is nothing new to talk about or pine over. The markets haven't been this boring to me in years. It's just the same thing everyday. There is hardly any reversals anymore. Just gap and trend. If you do get the reversal, it only becomes a buying opportunity to rocket us to new highs. Why can't just once some of the bulls get trapped so we can return to a normal market? This summer may get a little more interesting since most fund managers have already made their quota for the year so they will be trading from the sandy beaches of some tropical island.
This is the new normal. Get used to it.
There were 17 buy setups that I was looking at today but most of them will close up today so I will ignore. The ones that interest me are FB, NUAN, and INTC.
Well yesterday was fun wasn't it? For a second there in the morning I could have been caught cursing at my computer screen. After watching the ridiculous skyward move after Bernanke started speaking I actually felt myself begin to capitulate on the short side. I just couldn't take it anymore, the irrational exuberance that is. I had to ignore my computer screen for a bit. By the time I came back, lo and behold the market was actually trading off a bit. There was hope after all. I am so fed up with the Fed and the way they are manipulating this market.
I actually tweeted yesterday that I wouldn't be surprised if we would be up today, if not significantly. Who knows if it is just another one-off event? No one REALLY knows what Bernanke is going to do but himself (actually I don't even think he really knows either). Everyone will continue to postulate theories about why he will or won't continue with QE. I am still in the camp that he will not taper QE anytime this year. The market may get a slight pullback (2-4%) before the Fed's next meeting, just in time for Bernanke to have a more dovish speech to send the markets to new highs. It is interesting to see how the Nikkei reacted to Bernanke's speech along with the FOMC minutes, it was down over 7% last night.
So what do the bears have going for them? Nothing really. Besides a slight break of an upward channel since the beginning of May. Longer term trends are still upwards as we reach support levels. It is going to take more than a one off event like yesterday, or even a down move today to spur any more panic selling. So after his speech does this mean bad is good, good is bad, and horrible is great (depending on who you think actually controls the markets of course)?
Yesterday reminded me of an experiment that I had read about before. A guy is in a somewhat crowded area outside of a building and decides to stand in line behind a random door. Within minutes, people start lining up behind him, not even knowing what was inside the door or why they were waiting in line. Before he knew it, a line had formed around the block behind him. The moral of the story is that people tend to do things even when they don't know why they are doing it. The shoot first and ask questions later type of mentality.
Hopefully this will be the return to an actual market. We are due for one.
As I write this the markets have bounced pretty significantly off the lows with the DIA only trading off by about 0.2% and SPY trading off 0.5%. The VXX tits is up marginally. Looks to be a hold your nose and BTFD type of day.