Daily Watch-list, The Loop

Right off the bat I felt that we were not going to have a lot of actionable ideas from yesterday’s watch-list based on the gap up pre market.  I’m not a big fan of buying gap ups especially one that comes after an extended move.  What ended up happening is a gap and crap, the $SPY traded as high as $201.75 before settling at $200.50.

A few things that you should know about this swing strategy;

1. 1.  It’s 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.
2. 2.  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.
3. 3. 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 like yesterday because the market did not get you in. We are not looking for any action, we are looking for the right action.
4. 4.  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.
5. 5.  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.
6. 6. 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.

Today’s list is short as well, not many names and I felt like I stretched a little to put some of these names on the list; (yesterday’s cautionary signal came and went)

$TXTR $WWE $SCTY $CAMP $TWC $XOMA $NYT $GEOS $FRAN $VRA $BCOV $PLUG $CRCM $ACAT

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 5,000 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…

These are what I consider “tight set ups” that will trigger a buy signal for me if  and only when they break the previous day’s high.  On a regular trading day I would indiscriminately take every trigger because you just don’t know which one will be the big winner, you might have an idea but in the end you don’t know.

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.

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Frank Zorrilla is the founder of Zor Capital LLC a New York based investment management firm.  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

Daily Watch-list, Overheating

The list was somewhat lackluster yesterday with only a few standouts that took off right from the open which made them hard to own; $GOOGL $BIDU $BABY were the few that stood out.

The market is gapping higher this morning and will become officially overheated today by the close based on one of Pradeep Bonde most trusted indicator.  What you usually see when this indicator flashes a caution signal is junk stocks start to fly for the next few days and then you see choppiness / retracement over the next week or so.  So far this year this indicator has flashed a signal on (1/2-1/3), ( 1/8-1/23), (2/25), (3/3-3/12), (6/18-6/19),(6/30, – 7/2).  This signal is most dangerous and actionable shorting wise when it persist for a few days like it did at the beginning of the year.  But at the same time it provides a big opportunity for oversize gains in what many consider junk stocks.  I will keep you updated on this indicator.

The watch-list today is rather short and based on this morning gap up I would assume not many will be actionable;

$TNXP $HNR $BOFI $PNRA $TRIP $LULU $ULTA $WFM $CCIH $LEJU $KNDI $QIHU $CRCM $Z

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 5,000 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…

These are what I consider “tight set ups” that will trigger a buy signal for me if  and only when they break the previous day’s high.  On a regular trading day I would indiscriminately take every trigger because you just don’t know which one will be the big winner, you might have an idea but in the end you don’t know.

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.

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Frank Zorrilla is the founder of Zor Capital LLC a New York based investment management firm.  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

Daily Watch-list 9/2

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 5,000 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…

These are what I consider “tight set ups” that will trigger a buy signal for me if  and only when they break the previous day's high.  On a regular trading day I would indiscriminately take every trigger because you just don’t know which one will be the big winner, you might have an idea but in the end you don’t know.

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.

$LEFU $PLUG $WTW $AMRC $SOHU $WFM $ANIP $PF $HOV $BIDU $CCIH $BABY $CRCM $AMBI $GOOGL $FLTX $MDSO $ULTA $LAYN $KING $FCEL $CMG $GWPH $SCTY $PNRA $Z $NEON

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Frank Zorrilla is the founder of Zor Capital LLC a New York based investment management firm.  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

THE XLF BREAKS-OUT, NOW WHAT

A big deal is being made in the social media front about the $XLF “breaking out” technically today as if that is suppose to mean something.  ETF’S are for the most part mean reverting vehicles, in which I’m more incline to buy them once they pull back and look “ugly”, not when they breakout after being up 4 days in a row or up 9 out of the last 10 days  like the $XLF currently.  The context of the breakout is more important than the actual breakout. The $XLF is up over 5% in the last 10 days and this has been the most dominant pattern over the next 5 days since 2009 when the XLF is up 5% in 10 days;

Via @MarketMemory

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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

Liquidity Is Completely Relative

Liquidity is completely relative to the size of your portfolio.  I know that most people have this arbitrary number to say what is or what is  not “liquid”.  Some people say at a minimum a stock has to trade 1 million shares or 500k shares, but the fact is, a stock that trades 1 million shares per day might be liquid for many but maybe not for a 25 billion dollar portfolio manager.  And vice versa, a stock that trades 100k shares daily might be plenty liquid for a trader that only has a $30k dollar portfolio.  So forget the arbitrary numbers and define liquidity based on your portfolio size.  If you are not a mutual fund then don’t try to trade like one or use their or anyone else’s definition of “liquid”.

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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

Myths, Fact, Fiction About Momentum

There's so many myths in the market place, mostly coming from people who have failed investing/trading a certain way or are only allowed or want to do a certain type of investing.  It’s like a manager who only runs a long only gold fund that has to be fully invested at all times, he will obviously like gold under every circumstance and cycle.  Or a bank stockbroker who can only recommend mutual funds, of course he will steer you away from individual stocks, he will give you every reason on why its stupid to buy individual equities.

There has always been myths about momentum trading which has been around for 200 years and its probably one of the few strategies you can actually quantify.  There’s a million way to skin a cat; value investing, momentum trading, buy and hold, asset allocation, mean reversion, etc…It all comes down to risk management, avoiding large draw-downs, and finding out what strategy best suites your personality.   But always be wary of those one way street guys, the ones that tell you it can only be done “this way” and every other way is a fools’ approach.

Fact, Fiction and Momentum Investing academic study will tell you all you need to know about momentum trading, enjoy.

Fact, Fiction and Momentum Investing

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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

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.

Buy The Dip

The SP500 is down roughly 3.4% from its 7/24 $1987 high.  If you bought the dip and you are temporarily down regardless of the outcome you did the right thing.  Buy the dip is what the market has conditioned everyone to do since 2009, and buying the dip has worked tremendously over the last year or so.  The discipline based on recent market action (last few years) was to buy the dip not to short in the hole since that has not worked for a long time.

But once you buy the dip if you did how you handle it afterwards is what will make all the difference in the world and this is when risk management and awareness of the current situation comes into play.

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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