Saturday, April 22, 2017

Taking Out The Trash

There's a big difference between the best-performing stocks and the best growth stocks, many times one has nothing to do with the other especially in the short-term.

So far 85% of this year's best-performing stocks started the year under $10 and most if not all are unknown and without any great fundamental characteristics.  This was the case last year, the year before, and probably will be the case next year. Here is a post from 2013 talking about this very same thing; LINK

You can narrow down the stock universe in many different ways; by market cap, price, fundamentals, PE ratio, above moving averages, or by what works the best within your timeframe. Due to liquidity factors, you might be forced to only deal with stocks that meet certain liquidity, market cap requirements but that does not make them the best stocks, that makes them the best stocks for your own pre-requirement universe.

CHECK OUT THIS VIDEO FROM STOCKBEE OF WHAT WORKS. Believe me, it's worth it.

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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. 

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.

Friday, April 21, 2017

Sell'em Tight Buy'em Loose

The market had a great day yesterday. However, some possible stiff resistance sits right on top of us. The Small Caps led yesterday's rally, but in the grand scheme of things, it is still trading in a range that is now 85-days long.


Follow through has been an issue lately, in other words, it has not paid to chase gains.

Trading is a numbers game, it should be done within a portfolio of passive core index ETF holdings. Because stocks move in short-term bursts, they can be timed, in the short-term momentum and mean reversion is why most stocks move.  Scans can be created by looking at the most recent winners in the last 30-days if your timeframe falls into that window.

Here is my watchlist for today;


I have an interest in these stocks on the long side if and only if they go through yesterday's high plus .10-cents. This single criterion will narrow down the list and get you involved only in the stocks that are on the move. The primary drivers of stocks in the short term is momentum and mean reversion. Stocks that have a significant move in the short term tend to rest and move sideways for a few days and then resume higher more often than not. These momentum bursts typically last 1-10 days. 

SIGN UP HERE FOR OUR STOCK PICK OF THE WEEK.


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. 

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.

Thursday, April 20, 2017

Just Own The Freakin SPY

One of Raymond James's Chief Market Technician Andrew Adams is out with a note today talking about the bear market that has happened underneath the surface while the SP500 has held up well and masked all the weakness underneath the surface. These negative breadth divergences have been discussed ad nauseam on fintwit.

I’ve used this stat before, but it still astounds me that during 2015 if you had put all your capital into the largest ten companies in the U.S. stock market, you would have ended up making about 20% on the year, yet if you had held the other 490 companies in the S&P 500 instead, you would have actually been down about 3%. Talk about a strangely narrow market! Of course, that period culminated in the stealth tactical bear market in early 2016 when, at the February 11 low, the S&P 500 stocks were down an average of 26.7% from their 52-week highs and stocks in the Russell 3000 were down an astonishing 37.3%, on average. We still contend that was probably the “bear market” that many are still predicting even now, but it does not qualify in the eyes of some purists since the S&P 500 itself was “only” down about 15% from its previous all-time high instead of the requisite 20%.--Andrew

Joe Fahmy discussed this back in December on Fox Business;



Very simply, I have stated this before and will state it again; it makes sense to own the index ETF's has core holdings. By owning the SPY, you will be involved in all the biggest winners that you always hear about on TV like FANG (Facebook, Apple, Netflix, Google) without their respective individual risk. And certainly, you won't be dumbfounded, frustrated, etc, when the negative divergences persist for months, but the SPY is doing well.

Owning the indices; SP500, QQQ, IWM, allows you to participate in most if not all of the great companies that come public. You won't get the full participation on the way up, but you certainly won't live through gut wrenching drawdowns that are impossible to live through.

Before you sell everything and go 100% into the SPY make sure you are aware of this (below) and take advantage of them.


The average intra-year decline since 1980 has been -14%.
I personally don't believe in being 100% passive, 60% passive, yes, we can probably all agree that you can't time the MARKET, but you can time stocks.

HAT-TIP; TheReformedBroker

SIGN UP HERE FOR OUR STOCK PICK OF THE WEEK.


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. 

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.

Gains Are Being Faded

The SP500 gapped higher yesterday and peaked at 10:00 am, this has been a recurring theme over the last couple of days.

Energy and the metals took on the chin with the miners (GDX) ending the day -3.63% and Energy (XLE) was down -1.47%.

I have a few stocks on my watchlist today.



I have an interest in these stocks on the long side if and only if they go through yesterday's high plus .10-cents. This single criterion will narrow down the list and get you involved only in the stocks that are on the move. The main drivers of stocks in the short term is momentum and mean reversion. Stocks that have a significant move in the short term tend to rest and move sideways for a few days and then resume higher more often than not. These momentum bursts typically last 1-10 days. 

I'm excited about $KITE, it gapped higher on 2/27 on the back of some CAR-T results, since then it's been trading sideways while the entire sector has been under pressure. $KITE, has tightened up recently and it looks ready to resume higher, I have an interest in the stock if it can get through today's high plus .10-cents.


SIGN UP HERE FOR OUR STOCK PICK OF THE WEEK.


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. 

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.


Wednesday, April 19, 2017

When Is The Russell Going To Wake Up

The Russell 2000 has been trading sideways for 83-days, breadth hasn't been great, but at the same time, it has not been horrible. Maybe the earnings season will be the catalyst to get the Russell out of its dull drum, maybe it will be Brexit, or perhaps it will be the sell in May and go away seasonality.


Here's another view from AlphaTrends.


FANG; Facebook, Apple, Netflix, Google, have been holding up well and doing a great job masking some of the weakness. According to Fundstrat 40 stocks out of the 500 SP500 stocks are responsible for the entire year-to-date gain in the SP500. Half of the entire SP500 gain so far has come from 10 stocks. This is just another reason why it makes sense to hold the index ETFs as core holdings. Here's the article WSJ.

Here are the names on my watchlist today;


I have an interest in these stocks on the long side if and only if they go through yesterday's high plus .10-cents. This single criterion will narrow down the list and get you involved only in the stocks that are on the move. The main drivers of stocks in the short term is momentum and mean reversion. Stocks that have a significant move in the short term tend to rest and move sideways for a few days and then resume higher more often than not. These momentum bursts typically last 1-10 days. 

FLXN is a recent example;

Mean reversion plays are not as easy to play, however, what you are looking for is for a stock down 3 or more days in a row, the buy point is when it goes through the previous day high, PLSE and FMI are two recent examples.


Size and risk management are very important when swing trading, in certain markets one strategy will work better than the other.

SIGN UP HERE FOR OUR STOCK PICK OF THE WEEK.


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. 

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.

Wednesday, April 5, 2017

How To Deal With Bad Breadth



Now more than ever, there is always a lot of mention of "bad breadth." This is when the indices traded or are holding up a lot better than the majority of individual common stocks.

For example yesterday I tweeted that it was an interesting day, the major indices were up, the small caps barely down but yet we had more declining issues than advancing issues, we had more 1 and 3-month new lows than new highs. We also had more stocks down 4% or more for the day than up 4% or more.


CLICK TO ENLARGE

But yet the indices masked what was happening underneath the surface by closing green for the day. This is going on quite often. Here are my thoughts on it;


  • Negative divergences are not a great timing tool, positive divergences are.
  • One has to keep an open mind to the fact that the lagging stocks can catch up to the indices and negate the negative divergence.
  • More importantly above else, it reiterates why you should own the index ETF's as core positions, YOU WILL NEVER FEEL LEFT OUT.
Persistent negative breadth will eventually catch up to the indices, however, more often than not you have to give the benefit of the doubt to the bulls.

SIGN UP HERE FOR OUR STOCK PICK OF THE WEEK.


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. 

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.

Tuesday, April 4, 2017

Your Stock Gaps Down, Now What



What do you do when the STOCKGODS bless you with a gap down? If you are like me, you probably determine your positions size based on the difference between the purchase price and your stop loss divided by how much you want to risk. Let's say you have a 100k dollar account and you want to risk 1% of your total capital that equals $1,000. If you your purchase price is $25 and your stop is $22, you take $1000 divided by $3 which equals 333 shares, that is the amount you can buy based on how much you want to risk.

Now you get the gap down, the stock opens up at $22, what do you do?

I think at a minimum you should shoot first and ask questions later, either sell 1/2 your position immediately or the entire position and move on. Your stop loss was already pre-determined, and gap downs are part of the game. What happens on the days to come will either make you feel good about your actions or it won't. But based on the fact that you will only be right on half your trades you should already be prepared mentally to take losses. I know--it sucks.

SIGN UP HERE FOR OUR STOCK PICK OF THE WEEK.


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. 

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.

Monday, April 3, 2017

Don't Fear A Stock Market Crash

Trader's linkfest with some actionable ideas.

Don't Fear The Stock Market Crash--Tony Robbins

Here is Tony in 2010 with a note of caution--Tony Robbins

Best Stocks To Buy In The 2nd Quarter--Schaeffer Research

Bull Market Top Checklist--Strategas Research

Top 10 Best Performing Hedgefunds in the 1st Quarter---@Hegdemind

SIGN UP HERE FOR OUR STOCK PICK OF THE WEEK.


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. 

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.