Thursday, September 22, 2016

The Fed AfterMath

The Fed as expected did not raise rates; the market celebrated this event by gaining 1% on the day. As a matter of fact, mostly everything rallied including oil, metals, and bonds.  Going forward this combination of gaining 1% and oil, metals, and bonds rallying after a Fed meeting has not been kind for future returns going out 10-20 days as you can see on the chart below.  The initial pop was almost always retraced.


With that being said, we still have a decent amount of stocks that are set up properly that one can take advantage of.

XTLY, BREW, MIFI, DXCM, CVLT, Q, IMS, GRUB, TWTR, SAFM, BOFI, MOMO, QTWO, are the stock of interest on the long side if and only if they go through yesterday's high.

No one has said it better than Stockbee; stocks move in momentum bursts that last typically 3-5 days. Within these short term burst, a small cap can go up 8-20% and large-cap $5 to $40.

My opinion and outlook are subject to change as new information comes in.

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

The information in this blog post represents my opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Friday, September 16, 2016

Twitter Night Football

Last night Twitter (TWTR) debuted Thursday Night Football, the Jets-Bills game was streamed live on Twitter.  Even though I think they can improve it by maybe allowing you to wager on the game, see some local restaurant ads in case you want to order food, etc, it was awesome. There's no need to invite friends over, you can watch the game and interact with thousands of people all over the world and debate it back and forth without spitting at the guy next to you or the food.  I think it will have bullish implications for the stock.

The stock itself has been forming a base for roughly 8-months after being in a downtrend since April of 2015. Very simply, the sellers were completely in charge, every uptick to the 20 and 50-day moving average was sold.  At the beginning of the year the buyers and sellers found equilibrium, hence the beginning of the base.

The buyers are now taking control, you can see that by the pattern of higher lows that started in June, they weeded out the big sellers and you can argue that the stock has a brand new set of stockholders. Twitter right now is sitting on top of its 8-month base and bouncing off it. The stock looks promising here at these levels and move to $24 is not out of the question.  A break of the $17.50 level would take this stock back to the bench.


Twitter's New NFL Live Proving Popular


My opinion and outlook are subject to change as new information comes in.

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

The information in this blog post represents my opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

The Market Is Being Held Hostage

The market is still up for grabs in the short-term, next week's interest rate decision seems to have the market in a holding pattern.  We were down big last Friday, up big on Monday, down big on Tuesday, flat but volatile on Wednesday, up big yesterday, and giving up a chunk of yesterday's gain pre-market (some of the pre-market move is due to the SPY going ex-dividend, so it's not as bad as it looks).


Amidst the market volatility, we are still finding a decent amount of swing setups that are worth getting involved with if they trigger.

TWTR, HDSN, SQ, BIIB, KKR, CMG, DATA, GOL, RDUS, RH, SPU, TWLO, ACIA, LN, CHUBA, DLR, AKS.  I have an interest in getting long these names if and only if they go through yesterday's high plus .10 cents.

Some of these names will trigger, some won't, the market will decide that. We choose the stocks, input the orders and then allow the market to do what it's going to do.


My opinion and outlook are subject to change as new information comes in.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

The information in this blog post represents my opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Sunday, September 11, 2016

A Lower Low In The Cards

Contraction leads to expansion typically in the direction of the preceding trend.  It took the SP500 over 50 days to decline more than 1%,  and it traded in a very small range in the last two months, we had not seen such tightness since 1928. Unfortunately for many the expansion was to the downside. It took just a few hours to dissipated what took us 43 days to make as you can see in the chart below.


September historically is a weak month for the SP500 and a very strong month for volatility index (VIX) as we noted here (Doom and Gloom for September).  The 38th week which is the upcoming week is usually a negative week for the market and the 2nd strongest week for the volatility index, follow through selling is not of the question (the SP500 tends to have an inverse relationship with VIX).

The selling was severe on many counts; down volume, the number of stocks down 4% for the day, 96% of the issues on the NYSE were down, etc. You couple that with the huge VIX spike (40%) and they all suggest a dead cat bounce but a lower low 10-20 days out,

A few things continue to pop up when I think about what can possibly happen over the next few weeks.

1. A V-rally, over the last couple of years every time the market sold off hard it was followed by relentless buying that would last weeks not allowing you to jump back in without having a feeling that you were chasing a trap. I believe due to seasonality, elections, and hedge fund exposure a V-rally is not a high probability outcome.



2. Coming into the week hedge funds had a very high exposure to stocks, along with a record amount of shorts on the VIX and an all-time record $65 billion net long exposure to index futures. My feeling is that these have to be unwound before we can think about having a sustained rally.  The unwinding could be quick.




I would take my stops on individual common stocks as they come and focus on getting exposure to the SPY as we get deeply oversold.

My opinion and outlook are subject to change as new information comes in.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Thursday, September 8, 2016

Tracking Apple Events Versus The Semiconductor Sector

The big news of the day yesterday was the Apple event (APPL).  Apple always has an impact on semiconductor stocks in a good and or a bad way. I remember making a fortune on CRUS years ago due to APPLE using their product.

For informational purposes only I pinpointed the in Semiconductor ETF (SMH) chart the last 7 Apple events. Without forming too much of an opinion you can see that these events have for the most part changed the previous trend in the Semiconductor ETF in the very short term.



SMH TODAY

My opinion and outlook are subject to change as new information comes in.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Wednesday, September 7, 2016

Doom and Gloom For September

It's no secret that the month of September historically has been a bad month for stocks. With information so accessible nowadays investors have something to worry about every day, nothing slips by social media and blog quota driven sites.  However, the data is enticing enough to write about it. The charts below tell you all you need to know.

SPY seasonality chart of the last 30-years, via SentimenTrader. Click to enlarge charts.


SPY September stats dating back to 1993, courtesy of PastStat.

Seasonal Chart of the Dow Jones in election years, via @heynow

Here's another great chart via AlmanacTrader that shows the seasonal pattern in eighth years.

We also have a ton of other evidence that September might be a rough month for the bulls; Hedgefund exposure at nosebleed levels, VIX seasonality strong in September, a record number in VIX shorts, record long in SP500 futures by speculators, etc.

All the above facts are irrelevant until we start to see some price deterioration in the SP500. 

The first step would be for it to trade below its 5-day moving average and then have that average act as resistance.


Secondly, we need to see some weakness in some of the momentum names, specifically ACIA, TWLO, and SMH. Until then it's going to be hard to press shorts.

My opinion and outlook are subject to change as new information comes in.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Don't Be Fooled

The market continues to trade sideways in a very tight action but don't be fooled, underneath the surface stocks are working. The current action is the opposite of what we saw a year ago when the indices were grinding higher, and individual stocks were stuck in the mud.


AXGN, XPO, ICON, KKR, ATSG, GWR, AIRG, TPIC, CSX, UNP, KSU, PGND, ASPS, CLMT, are the stocks on my list today. Very simply, I'm looking to get long these stocks if and only if they go through yesterday's high plus .10 cents.

Swing trading gives you the opportunity to take advantage of short-term price swings that happen in most stocks, these moves typically last 5-10 days. I find it to be a great compliment to passive investing.

My opinion and outlook are subject to change as new information comes in.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.