Taking A Look At Breadth

The market came under pressure yesterday especially in the morning but closed well off the lows. The SP500 is still trading above its 20-day moving average, the Russell 2000 is still intact, but we had a spike in stocks in new 1-month lows as you can see in the chart below and the pattern lately has been higher highs (more lows).

You can also see some deterioration in individual stocks when you take a look at how many stocks are up or down more than 13% or more in the last 34-days. Stocks up 13% or more have fallen off a cliff, and we have seen a slight uptick in stocks down 13% or more in the last 34-days.

I think it is too early to make anything significant out of this, but it's noteworthy to see how it develops.

Here's our watchlist for today;

We have an interest in these stocks on the long side if and only if they go through yesterday's high plus ten cents. $EXAS $JAZZ are two stocks that recently gapped higher based on news, and now they have digested the news and can possibly resume higher.

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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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

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We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

Top 20 Sectors For Next Week

A bulk of a stock’s move is due to the underlying sector; a rising tide can lift all boats. Keeping track of the best performing sectors and the stocks within the sectors is a great way to narrow down the stock universe to the strongest stocks in the currently favored sectors.

This week we have some of the usual sectors that have been very strong for last 4-5 weeks; Captial Markets (banks), Oil & Gas, Semiconductors.

Rest of the list;

Knowing the top 20 sectors is a starting point, what you want to do next is narrow down stocks within the sectors to a manageable list. You can narrow down the list in many different ways; market cap, price per share, earnings/revenue growth, etc. I like to narrow down the list by creating a scan that shows me the stocks that are not extended based on how far they are away from their respective 20-day moving average. This particular scan will only show me the stocks that are within 3% of their 20-day moving average.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

Volatility Is Going To Rise

The consensus right now is for a higher $VIX (Volatility), and I’m in full agreement. Unfortunately, there aren’t many great ways to play this consensus besides opportunistically and occasionally shorting the $XIV.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

The Thundering Herd

I came across these two awesome charts that needed to be shared. Over the last year or so a tremendous amount of money has gone into passive investing and rightfully so. At the same time, it’s pretty amazing how many have given up on trying to beat the market. Like Kevin Durant; if you can’t beat’em, join them.

This chart has gone parabolic.

But investors are a fickle bunch, easy comes, easy goes. In other words, those who threw in the towel without having any conviction behind their move will be the first ones to bail on the first setback. 

A great many either don’t know, turned a blind eye, or have yet to accept the fact that everything goes through ebb and flow. Good times, bad times, hot and cold, peaks and valleys, etc.

I get the feeling that many who jumped on the passive bandwagon forgot that the market while it mostly goes up, it also goes down. It won’t always be sunshine and rainbows. 

The chart below shows you the ebb and flow of funds outperforming the SP500.  A very astute observation was made by @Babak; “notice the lows seem to correspond to market tops, early 1970′s, 1987, 1999.”

Before you lose your wig, I am not implying that we are going to top, what I’m pointing out is that this all a natural process. This is the way things work, good times are followed by subpar times, and it is always darkest before dawn. You should not be surprised when we have the inevitable retracement.

Top performing managers from 2000-2010, the top quartile who ended with the best record 97% of them spent at least 3 of those 10 years in the bottom half of performance. 79% spent at least 3 years at the bottom quartile of performance, 47% of those who ended up with the best record spent at least 3 of the 10 years at the bottom decile of performance.

To reiterate something that I have said before; many managers (hedge funds, endowments) need the market to have down years in able to outperform. A lot of the outperformance from funds comes from avoiding down years, I wrote about it here (WHY HEDGE FUNDS NEED DOWN YEARS).

source; Cheap Beta

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

Your Starting Guard, From New York, Number 45

Big day today, President-elect Donald Trump will be sworn in as the 45th president of the United States.

The market has been trading sideways since December 13th, the close on the SP500 on that day was 2,271, the close yesterday 2,263. Underneath the surface, there hasn't been any real damage to individual common stocks.

I have a long watch-list today but I'm going to focus on $DNR, $GUSH $CRR, $WIFI.

Here is the rest of the list;

We have an interest in these names if and only if they go through Friday's high plus .10 cents. We want to buy these stocks on the move and not anticipate the move. These ideas are what we consider swing trades that can last anywhere from 1-10 days. Most stocks if not all go through a momentum burst that lasts 1-10 days and that is what we look to take advantage of.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

The Bigger The Base The Higher Into Space It Goes

Diana Shipping, $DSX, is trying to emerge from a one year. I'm always intrigued by bases because typically a prolonged period of contraction leads to an extended period of expansion. We have covered bases extensively here (SEE BELOW) on the blog, and it's my favorite set up.

Stan Weinstein, the author of Secrets For Profiting In Bull and Bear Markets, has a great definition the "basing area," specifically the one's that are formed after being down for several months.

The Basing Area: "After XYZ has been declining for several months, it eventually will lose downside momentum and start to trend sideways. What's actually taking place is that buyers and sellers are starting to move into equilibrium, whereas previously the sellers were far stronger, which is why the stock had plummeted. Volume will usually lessen--dry up--as a base forms. But often volume will start to expand late stage 1, even though prices remain little changed. This is an indication that dumping of the stock by disgruntled owners is no longer driving down the price. The buyers who are moving in to take the stock off their hands are not demanding any significant price concession."

That's exactly what is happening with $DSX, it has been going sideways for a year and now you see a pattern of higher lows. Very simply, the buyers are no longer waiting to buy the stock near the bottom of the base, they want it now, they see greener pastures ahead.

ETSY BASE TAHO BASE ICON BASE ZGNX BASE VHC BASE

COH BASE HZNP BASE PVA BASE QSII BASE

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

Oil Names In Play

The futures are off a little this morning and the sell the inauguration is getting a lot of attention on the social media front.  In other news, Noble Energy$NBL bought Clayton Williams $CWEI at a big premium, this might put the sector in play today. We have a few oil names on the list today; $HOS $DNR $BBG $ERX $GUSH. We have an interest in these names if and only if they go through Friday's high plus .10 cents. We want to buy these stocks on the move and not anticipate the move.

Here is the rest of the list;

These ideas are what we consider swing trades that can last anywhere from 1-10 days. Most stocks if not all go through a momentum burst that lasts 1-10 days and that is what we look to take advantage of.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

The Russell Is Resting

Momentum has slowed down a little bit, breadth has been somewhat weak, this is mostly due to the fact that the Russell 2000 has been down for three days in a row.

Inauguration day and the beginning of earnings season are two catalysts some are pointing at as possible triggers for a pullback in the market. That remains to be seen and only time will tell.

With earnings season right around the corner, it is important to check the earnings date of your holdings.

My long-only watchlist consists of a few names with an extra focus on $POT $LC $AIRG and $BCO.

Here is the rest of the list;

We have an interest in the above names if and only if they go through yesterday's high. That one single criterion on most days eliminates a bulk of the names. These ideas are what we consider swing trades that can last anywhere from 1-10 days. Most stocks if not all go through a momentum burst that lasts 1-10 days and that is what we look to take advantage of.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

The Trump Industries

The market has a made a decent move after Trump won the election, one can assume that the industries that have made the largest moves are the biggest benefactors of Trump’s presidency. 

Below you can see the best performing industries on a 5-day basis, then on a 10-day basis and then you can see the full coverage (best-performing industries since 11/9). 

Large banks, Regional Banks, and the oil sector have been the clear standouts.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

This Volatility Fund Is Going To Reverse Split, What Does It Mean

UVXY a volatility fund that has wrecked many accounts is set to do a reverse split next week on 1/12/2017. Since its inception, UVXY has reverse split six times, these funds typically split after a prolonged move higher in the market. The stock market has a tendency to move higher over time, so like every bearish indicator, strategy, etc., they work sometimes but fail a majority of the time. However, when you couple volatility fund reverse splits, a new administration, breadth deterioration, and above all else price action you can start to see what are the probabilities of the possibilities.

Click to Enlarge

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

Citrix Systems Huge Base

The weekly and daily chart of Citrix Systems are aligned. On the daily chart, we have an 8-1/2 month box and a pattern of higher lows. The stock recently broke to new highs and successfully retested the top of the trading range as you can see in the chart below.

On the weekly chart, the stock has been going sideways since 2011. I'm always intrigued by bases because typically a prolonged period of contraction leads to an extended period of expansion. 

Stan Weinstein, the author of Secrets For Profiting In Bull and Bear Markets, has a great definition the "basing area," specifically the one's that are formed after several down months.

The Basing Area: "After XYZ has been declining for several months, it eventually will lose downside momentum and start to trend sideways. What's actually taking place is that buyers and sellers are starting to move into equilibrium, whereas previously the sellers were far stronger, which is why the stock had plummeted. Volume will usually lessen--dry up--as a base forms. But often volume will start to expand late stage 1, even though prices remain little changed. This is an indication that dumping of the stock by disgruntled owners is no longer driving down the price. The buyers who are moving in to take the stock off their hands are not demanding any significant price concession."

Citrix has not been declining for several months. However, it looks like a brand new set of buyers are ready to take the stock higher.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

The Market Is Still Constructive

Non-farm payroll numbers were out earlier today, and the initial reaction to the (1st 30-minutes) is positive.

Here's the short-term look of the SPY from a very trusted source @AlphaTrends, so far so good.

I have an interest in few stocks today if and only if they are able to go through their respective highs from yesterday, 10 names on the list, but I will focus specifically on $Z $CTXS $CWT $AQMS $VEEV $HAIN, the weekly and daily charts are aligned.

Here are the rest of the names;

These ideas are what we consider swing trades that can last anywhere from 1-10 days. Most stocks if not all go through a momentum burst that lasts 1-10 days and that is what we look to take advantage of.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

Combining The Daily With The Weekly

Today we have a decent amount of stocks on the watchlist, I left out many names, and I will be paying a lot more attention to these names today; BTE, CTXS, SHOP. Those 3-names have decent consolidations both on the daily and weekly timeframe.

Here are the rest of the names;

We have an interest in these names if and only if they go through yesterday's high. That one single criterion on most days eliminates a bulk of the names. These ideas are what we consider swing trades that can last anywhere from 1-10 days. Most stocks if not all go through a momentum burst that lasts 1-10 days and that is what we look to take advantage of.

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.

Two Stocks Emerging From Long Bases

Lions Gate (LGF.B) and Potash (POT) are two stocks that are trying to emerge from bases. I'm always intrigued by bases because typically a prolonged period of contraction leads to an extended period of expansion. We have covered bases extensively here (SEE BELOW) on the blog, and they are one if not my favorite set-up.

Stan Weinstein, the author of Secrets For Profiting In Bull and Bear Markets, has a great definition the "basing area," specifically the one's that are formed after several down months.

The Basing Area: "After XYZ has been declining for several months, it eventually will lose downside momentum and start to trend sideways. What's actually taking place is that buyers and sellers are starting to move into equilibrium, whereas previously the sellers were far stronger, which is why the stock had plummeted. Volume will usually lessen--dry up--as a base forms. But often volume will start to expand late stage 1, even though prices remain little changed. This is an indication that dumping of the stock by disgruntled owners is no longer driving down the price. The buyers who are moving in to take the stock off their hands are not demanding any significant price concession."

ETSY BASE TAHO BASE ICON BASE ZGNX BASE VHC BASE

COH BASE HZNP BASE PVA BASE QSII BASE

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. 

See How I Translate My Tweets & Blogs Into Actual 3rd Party Verified Trades

Work With Me

We live in a world in which we are bombarded with information, tweets, blogs, etc., content is the new salesman, content is the new marketing, content is the new networking. With information being so readily available, bloggers try to differentiate themselves with their writing skills, volume, and consistency, putting out blog posts to meet quotas. We are seeking to stand out from the crowd by showing performance, by taking all the information and seeking alpha, that’s the sole purpose of the blog. It won’t always be pretty; it’s never easy, and performance is spotty, but we seek superior risk-adjusted returns, not notoriety for our writing skills.  If this is something you can relate to, then this blog is for you.