Tuesday, February 17, 2015

The Extremist

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This quote from Sean McLauglin is very true, all you have to do is read any of the market wizards book to agree.  You had macro investors, value investors, technical traders etc..;Bruce Kovner, Jim Rogers, Mark Weinstein.  Nowadays we have so many extremist in the investing world, we have the extreme fundamentalist, the extreme technician, the extreme passive  investor  and the extreme active investor.  What dictates what is the right way or wrong way of investing/trading is your P&L.  I believe a hybrid approach triumphs all.
There is no doubt that in order for a stock to make a multi year run it has to have a story, strong earnings, sales growth etc…But sometimes a stock can get cut in half before the next 10q and 10k comes out, look at the oil names recently, sometimes a stock can double before the next 10q and 10k comes out.
Technicals will many times keep you from owning a great company, with great numbers, just because it broke some trend-line that you believe is important or because its below some magical moving average.  Other times it will take you out of an overly loved stock that gets cut in half before the fundamentalist get a chance to read the updated 10q or 10k.
Pick your poison.  What’s important is to know what works for you and what works within your time-frame.  If you are a 10q, 10k reader then your time frame is 1 quarter to a year and longer, so you probably should not be selling a stock based on the price action if you bought it based on its previous 10q.  You must first read the updated 10q or 10k then you have to come to the conclusion if whatever changed is a one off event.
If your time frame is less than a quarter and even up to a year then earnings, sales, growth are all irrelevant, if you think other wise just look at the biggest winners every month.  Last quarter stocks over $5; GENE +410%, FWM +147%, ARRY +127%, ESPR +122%, ABMD +81%.
Here is what Kyle Korver the NBA’S best 3 point shooter had to day about developing his shot. “I think the secret to shooting is finding a shot you can make exactly the same every single time and then do it a whole lot. There’s no secret potion to it all. You just gotta find something, however you are, like, whatever feels good to you, but shoot it so you can make it the exact same every single time. The exact same. Like, a little bit off can change a lot. So you focus on trying to make it the exact same, and over time hopefully you become a good shooter.”  In other words—DO WHAT WORKS FOR YOU.
Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts.  Managed Assets

Saturday, February 14, 2015

Act As If / Current Market View

Here’s a quick video on what to expect after the trading resolution that took place last week.
P.S. I’m allowed to change my mind if the market says I have to.
Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts.  Managed Assets

Wednesday, February 11, 2015

Swing Trading Ideas

These are the stocks on my watch-list today;  $AMBA $AUY $CLUB $CZZ $ERY $EW $EXK $HABT $IHS $KANG$KNDI $LOCO $NUGT $PDCE $PE $QIHU $SINA $SLW $ZSPH.  These are actionable 0-10 days long trading ideas IF AND ONLY THEY GO THROUGH YESTERDAY’S HIGH.
The Process;
Every morning I go through a few of my scans to find buy candidates for the day.  Depending on the current state of the market the size of the list will vary, usually its no more than 50 names.  My process is based on market structure not on beliefs or myths of what works– or what doesn’t work.  They are certain behavioral patterns that have been around for 100 years that are based on market structure, these behavioral patterns are recognizable, observable, and quantifiable.  On daily basis we have 3,000 stocks that we filter based on certain market structures that gives us an edge of a higher probability than a random outcome.  Once the list is narrowed to a handful of names the market will further narrow down the list by getting us in or keeping us out of these names with a range expansion move.
I don’t look at charts in your conventional cookie cutter manner, or have rules as to where the stock should be whether its 15% off its 52 week highs or above or below certain moving averages etc, in the short term none of that matters.
How much you put at risk per trade depends for the most part what your current outlook is for the market over the next 0-5 days.
Put these names on your trading platform, set the alerts at yesterday’s high for each name, once the alert goes off take a look at the chart, decided within 3 seconds whether or not you are going to buy it, decide how much you want to risk on the trade and your stop loss, hit the buy button, and leave the rest up to the market, wash, rinse, repeat.  Buy’em tight, Sell’em loose.
A few things that you should know about this swing strategy;
  •  Its main goal is to get you in when stocks are moving and keep you out in choppy/sloppy markets, it is imperative that you allowed the market to get you in only when the stocks go through their previous day’s high.
  • Your awareness of how the market is behaving is crucial, this will give you an idea of how hard to push the envelope.  My best indicator for this is my rolling 5 day watch-list.
  • Swing trading is a numbers game, you are going to be wrong half the time, risk management is above all, and many times you will have nothing to do because the market did not get you in. We are not looking for any action, we are looking for the right action.
  • Don’t be penny wise, don’t try to anticipate a move just because the chart looks good.  You can have a great looking tight set up with a stock coiling for 10 days but who is to say that it won’t coil for another 5 days.  If you anticipate the range expansion you might buy something that is not ready to go and it will only frustrate you and lower your odds of a winning trade.
  • For me this list is a one way list – long bias.  I do not look at this list as a long or short list, long and short are two different games with different dynamics.
  • You need to be extremely organized.  Most if not all your work will be done pre-market and you will spend the day just executing or you can just automated it with buy orders after 9:45am.
Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts.  Managed Assets

Friday, February 6, 2015

My Current View Of The Market

Here is a quick 2 minute video on my current view of the market.
Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts. Managed Assets

Tuesday, February 3, 2015

The View

Volatility has increased dramatically over the last 2 months with barely any net movement on the SP500 since September (+20 points).  In the last 2 months we have seen a series of straight up and down moves that last 4-7 days.  December started with the SP500 pulling back -5.14% in 7 days, followed by a +6.13% in the following 8 days, then down -4.68% in the next 5 days, up 2.9%, down 3.58%, for net move of -4.06% (1/30 close) since 12/5/14 and flat since September.
For swing traders who have a time frame of 0-20 days getting bullish when the market finally feels right has been wrong and getting bearish when the market feels sluggish has been wrong as well.  One may consider shortening the time frame to day trades and or look for mean reversion trades, look for reversals from stocks down or up multiple days in a row, preferably high priced stocks.
SPXBLOG

QQQ
DJ
COMPQ

Zor Capital LLC is a New York based investment management firm, founded in 2011. Our goal is superior performance, with preservation of capital as our number one priority. Zor Capital manages separate accounts (both taxable and retirement) for accredited investors and institutions. This structure gives clients access to a hedge fund like strategy while maintaining 100% control of their accounts.  Managed Assets
SSPY $QQQ $IWM $DIA