Chasing

The market had a very nice day yesterday with the SP500 gaining +1.37% and the Russell 2000 +2.15%.  This morning the SPY is building on that gain with a 1 point gap up.  It's a little hard to get excited after huge up days because the market has had a hard time following through to the upside when most see it has a good "technical set-up".  We've enjoyed the best follow through from oversold levels, by the time most consider the market in "good shape" it has run out of juice.

This time like always could be different.

With that being said, AREX, DNR, RYAM, YELP, BTE, VMW, OLLI, AGN, WLB, LGCY, GNW, are the stocks on my swing trading watchlist for today.  GOOGL +$15, LNKD +$3, were the big standouts yesterday.

The rules are simple;

• Only get involved if they go through yesterday's high plus a few pennies.
• Based on the chart patterns, the stops are close and clear.
• Either the market will get you in or keep you out.
• I only play this list one way, LONG.
• Stocks move in momentum burst of 3-5 days (stockbee), you want to buy on the first day and start unloading on the way up and on days 3,4,5.
• You are going to be wrong half the time.
• Position size makes all the difference in the world.
• I work with a price stop and a time stop.
• Stocks in the short term move from 52-week lows, 52-week highs, all time highs, etc.
• Contraction leads to expansion; this happens at lows, highs, middle, etc.
• I tend to stay away from buying stocks in the first 15-minutes.

My opinion and outlook are subject to change as new information comes in. 

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.

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Stay Informed

             

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.

Stocks To Buy Today

The market has been very quiet. The SP500 has been alternating days for the last two weeks, the bulls and the bears have shown no interest thus far to make something happen.

In my eyes, the energy names continue to have the best swing set-ups in the short term  Contraction leads to expansion, so a move here is in the cards, the million dollar question is whether it will be to the upside or downside.  If it's to the upside, the stocks below are the ones on my watchlist for today.

GNW, DNV, AREX, DNR, PES, YELP, ERX, GTLS, AMED, EXPE, MBLY, GOOGL, LNKD, BTE.

The rules are simple;

• Only get involved if they go through yesterday's high plus a few pennies.
• Based on the chart patterns, the stops are close and clear.
• Either the market will get you in or keep you out.
• I only play this list one way, LONG.
• Stocks move in momentum burst of 3-5 days (stockbee), you want to buy on the first day and start unloading on the way up and on days 3,4,5.
• You are going to be wrong half the time.
• Position size makes all the difference in the world.
• I work with a price stop and a time stop.
• Stocks in the short term move from 52-week lows, 52-week highs, all time highs, etc.
• Contraction leads to expansion; this happens at lows, highs, middle, etc.
• I tend to stay away from buying stocks in the first 15-minutes.

My opinion and outlook are subject to change as new information comes in. 

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.

Work With Me

Stay Informed

            

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.

The Scariest Chart That Is Not Scary At All

The chart below is making the rounds in the twitter finance world, and it's freaking out the uninformed.

The chart shows two instances when one moving average crossed another moving average (50-week and 100-week) to the downside and coincidently the market went down big. The underlying assumption is that the death cross we are experiencing now will have the same effect.  This is a great chart to get a lot of page views and to meet the daily blog quotas, but it means nothing at all.  Two sample sizes are not enough to conclude anything.  Secondly, you would have to believe that the 2001 and 2008 plunge was because of a cross of two moving averages and not because of the Internet craze and the housing bubble. Thirdly, if you went back to 1950 and calculated what happen every time this "death cross" has happened you will quickly see that there is no statistical edge to the downside at all.

Source; Chad Gassaway

The fact that the "death cross" is just nonsense to put it in a nice way, it doesn't mean that the market can't collapse, or crash, or go down, etc.  The point is that you the reader now more than ever has to cut out a lot of noise that now fills blogs, business websites, etc.,  posts are now being written to fill pages and meet quotas.

My opinion and outlook are subject to change as new information comes in. 

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.

Work With Me

Stay Informed

             

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.

Amazon's Next Retail Targets

Retail stocks were down huge yesterday, it all started when Macy's reported their earnings number and the stock took a nose dive dragging the whole retail sector with it; $M -15%, $KORS -11%, $VFC -6.5%.  Amazon, however, was printing a new all-time high, immediately mostly everyone on my twitter finance stream concluded that Amazon is the one killing these retailers.  As a big time Amazon shopper I have never purchased any clothing from Amazon, so obviously I don't buy into this argument.

With that being said, Investors Business Daily today reported that Amazon is poised to become the number one U.S apparel retailer by 2017;  Amazon is growing in the clothing business, while traditional retailers such as Wal-Mart (WMT) and Target (TGT) are in decline, Blackledge said.  A bold call, and while my apparel buying habits might be different than most this is without a doubt a huge possibility.  This got me thinking about what apparel stocks have held up well against Amazon and are they likely the next one's to feel Amazon's wrath.  Children's Place and Carter's have held up relatively well against Amazon; as an online buyer,  I would feel much more comfortable buying baby clothes on Amazon than a pair of jeans for myself. Children's Place and Carter's might be the next in line to feel some Amazon pain.

5-year chart of Amazon versus Children's Place and Carter's.

Source; IBD

My opinion and outlook are subject to change as new information comes in. 

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.

Work With Me

Stay Informed

            

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.

Churn and Burn

The market had a huge up day on Tuesday, the gains were entirely erased yesterday, and this morning so far we have recovered half of yesterday's losses.  Some people are calling yesterday's action a bull trap; I'm not a fan of making calls based on the action of one day.

The perma-bulls get excited every time the market is up multiple days in a row near highs and then quiet down when the market has a natural pullback.  The perma-bears take every piece of information, data, Candlestick, etc., and spin like if it's 2008 all over again.

The fact is, the SP500 has not been able to break these levels in 15 months, flat is the pain trade, a big churn and burn with most not having anything to show for it except losses.  The market has a tendency to move higher over time, so you always have to give the benefit of the doubt to the bulls.

BV, BLX, ACW, SSTK, BTE, CTRP, CP, LGF, are the stocks on my watch list today.

The rules are simple;

• Only get involved if they go through yesterday's high plus a few pennies.
• Based on the chart patterns, the stops are close and clear.
• Either the market will get you in or keep you out.
• I only play this list one way, LONG.
• Stocks move in momentum burst of 3-5 days (stockbee), you want to buy on the first day and start unloading on the way up and on days 3,4,5.
• You are going to be wrong half the time.
• Position size makes all the difference in the world.
• I work with a price stop and a time stop.
• Stocks in the short term move from 52-week lows, 52-week highs, all time highs, etc.
• Contraction leads to expansion, this happens at lows, highs, middle, etc.

My opinion and outlook are subject to change as new information comes in. 

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.

Work With Me

Stay Informed

           

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.

Resumption Or Change Of Direction

The SP500 has been in pullback mode for the last two weeks; it now sits on top of its 50-day moving average.  Just as the Twitter folks started making fun of the bears and screaming that new highs were coming the market stalled. The Nasdaq composite has not faired as well as the SP500; it's down ten out the last 11 days with -4.4% return. The cheerleaders from the 2100 level are nowhere to be found now that the market has a more favorable risk-reward ratio.

The Non-Farm Payroll numbers are due out at today at 8:30 am, this could be a market moving event and or perhaps will serve as a catalyst to resume the recent trend or as a direction changer.  No one knows.

What I do know is that the selling has not been intense, and a lot of stocks are down multiple days in a row (3 or more) sitting on top of what can be possible support.  If the market can start moving higher many stocks will offer great risk reward trades for the short term.

TNA, TQQQ, HLX, FMSA, BTE, YRD, CENX, PAH, NOW, AVH, R, SUN, PCAR, JCI, MANH, PAY, MPC, PSTG.  Normally I only like to get involved in trades if they can get through their previous day high. However, most of these stocks are down multiple days in a row, what I'm looking for is a green candle, that would be the trigger and the previous day low will be the stop.

My opinion and outlook are subject to change as new information comes in. 

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.

Work With Me

Stay Informed

          

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.

Sector Rotation

The buzz word this year has been "SECTOR ROTATION", the minute one sector takes off for a few days it settles down and then the weakest starts to move up. In other words, it has been a mean reverting market, last year's losers are this year's biggest winners; ENERGY, METALS.

With that being said, the XLE (energy ETF) is down five days in a row, and many energy stocks are as well.  AR, CENX, are two of interest at this very moment. They both are retesting multi-month breakouts which I expect that they will hold, and if mean reversion takes effect again then these are great entry points.

ETF'S are for the most part mean reverting vehicles; anytime they are down 5-6 days in a row it peaks my interest along with the stocks within the sector.

My opinion and outlook are subject to change as new information comes in. 

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.

Work With Me

Stay Informed

         

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.