Wednesday, August 23, 2017

Notice The Change

We had a decent bounce yesterday in the indices with the $SPY and the $IWM both gaining 1%. However, both have already given up half of their gains in pre-market. Like we said in our last POST, the market is experiencing a little character change.

Traders don't turn your trades into investments and investors don't turn your investments into trades, know your timeframe and the reason why you got into the trade/investment in the first place.

A few Gold stocks (ABX, NGD, RGLD) printed inside days along with the ETF'S $GDX and $GDXJ, I always pay attention when volatile instruments print an inside day, they typically provide good signals when they break the inside day bar. In this case, I have an interest in $GDX and $GDXJ on the long side if they can break through yesterday's high.

The same applies to high price liquid growth stocks, when they print inside days it provides a good trading signal, both $BIDU and $NVDA printed inside days, I have an interest in both on the long side if they can get through yesterday's high.



Stocks move in short-term momentum bursts that last 3-5 days, the return within those days varies depending on market condition, size of the company (float, market cap). The list below is my swing watchlist for today, I have an interest in these stocks if and only if they can get through yesterday's high plus .10-cents.



STOCK OF THE WEEK RECAP

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, August 18, 2017

Change Of Character

Individual stocks are under pressure, there's no doubt about that. It's been a long time since we hit back to back oversold levels in stocks in such a short period. We were a little oversold last week, and that led to a short-term four-day bounce that disappeared in a couple of hours.


Without a doubt, this is a change in character, previous one-day selloffs were followed by V-shape rallies that lasted weeks. Individual stock set-ups have been non-existent for days. Seasonally, we are in a weak volatile period as you can see in the chart below. Forget about taking cookie-cutter breakouts and look for mean reversion plays.


The amount of SP500 stocks above their 3,5, and 10-day moving average is at a somewhat oversold level, but it can get a little more oversold before a dead cat bounce. The tape feels heavy, and this looks more like the beginning of a down move than the end of one.


Here is the bottom line; know your timeframe, trades are trades and investments are investments. Don't turn a swing trade into an investment just because you are down and don't turn your long term asset allocation to index ETF'S into a short-term trade because of a natural pullback.

STOCK OF THE WEEK RECAP

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, August 15, 2017

BOOM

BOOM! just like that the market takes back 75% of the losses it dished out last week. We showed the chart below on Friday of last week, what we saw was a spike in 1-month lows. Typically these short-term spikes lead to dead cat bounces that lately have been turning into V-shape rallies.

Here's the chart; SPIKES IN 1-MONTH LOWS.

The hardest part about these quick sell-offs is finding stocks to buy that are technically set-up properly. The easiest thing to do is to buy the indices. You won't miss the bounce if you buy the SPY, QQQ, DIA, or IWM, and if you have some index ETF exposure you won't feel like the market is running away from you, your back won't be against the wall to put on some positions just to keep up with the Joneses (SP500). The index ETF's will give the necessary exposure you need until stocks technically set-up again which can be days to weeks later.

I only have a few stocks on my swing trading watch-list today, it looks like my index exposure will have to do for now.


I have an interest in the stocks above if and only if they can get through yesterday's high plus .10 cents.

STOCK OF THE WEEK RECAP


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, August 11, 2017

The Dog Days Of The Summer

Like always, the indices only tell you half the story, the market has barely gone down, in fact, it's only a few percent off the high, so minuscule that is not worth commenting on. However, individual stocks are telling you a different story. We had a large spike in 1-month new lows, we also had a breadth flip; 430 stocks are up +25% or more vs. 509 that are down -25% or more in the last 65-days. This is pretty amazing considering that we are barely off the highs, what it tells you is that a majority of stocks were holding up well but not really going gangbusters on the way up; low volatility on the way up and high volatility on the way down.

Here are some charts;

Breadth flip via stocks up and down 25% or more in the last 65-days.

Spikes in 1-month new lows often lead to a dead cat bounce.

When we get to 200 or more stocks down -25% or more in a month the bounce will have more sticktoitiveness.

Bottom line; I would tread carefully here. I were looking to play a bounce I would first start with the indices, then I would look for stocks that reacted great to their earnings report and try to buy those, for example; GRUB.

STOCK OF THE WEEK RECAP

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, August 9, 2017

Breadth Has Been Weak For Days

The market is under pressure this morning, many will point at Donald Trump's "FIRE AND FURY" threat to North Korea yesterday right before the close as the reason for the weakness. The fact is that breadth has been weak for the last 11-days measured by the number of stocks printing fresh 1-month and 3-month lows. You can also see some of that weakness in stocks down 13% or more in the last 34 days, the pattern has been an expansion of new lows.

The charts below tell you the whole story; CLICK TO ENLARGE.

STOCKS PRINTING FRESH 1-MONTH LOWS.

STOCKS PRINTING FRESH 3-MONTH LOWS.

STOCKS DOWN 13% OR MORE IN THE LAST 34-DAYS.

Based on the number of stocks down -4% or more versus the number of stocks up 4% or more on a daily basis you can clearly see that there has been more distribution than accumulation.


Here's the bottom line; you have to give the benefit of the doubt to the bulls, it has been a losing proposition to side with the bears. However, there is time to press, and there is time to sit back. The best thing to do right now is to look at stocks that reacted well to their earnings release, find out why and put them on your personal watchlist to buy when they set up technically, for example; GRUB, and TWLO.

STOCK OF THE WEEK RECAP


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, August 7, 2017

Kids Are Almost Out Of Camp



The market is holding up well, the Dow Jones is working on a very nice winning streak, the Q's have been consolidating for the last 11-days, and the small caps are lagging.

There's not much to say, we're in August, kids are almost out of camp and many parents are looking forward to vacation this month.

August is known to be a shaky month for equities, but so far it has been smooth sailing. As far as individual stocks we are not seeing a whole lot of momentum. We've seen a few earnings blow-ups in some of the high-flyers; PI, AAOI, COHR. Holding through earnings is always a crap shoot.

IRBT, NFLX, AAL, AXON, and VSTM are the stocks on my watchlist today. Stocks, for the most part, move in short term momentum bursts then trade sideways to down and then they repeat the process. Just go through charts, and you will notice the pattern.  What we want to do is take advantage of those short-term bursts and repeat the process over and over again. Believe me, it can be done.



STOCK OF THE WEEK RECAP

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.