Doom and Gloom For September

It's no secret that the month of September historically has been a bad month for stocks. With information so accessible nowadays investors have something to worry about every day, nothing slips by social media and blog quota driven sites.  However, the data is enticing enough to write about it. The charts below tell you all you need to know.

SPY seasonality chart of the last 30-years, via SentimenTrader. Click to enlarge charts.

SPY September stats dating back to 1993, courtesy of PastStat.

Seasonal Chart of the Dow Jones in election years, via @heynow

Here's another great chart via AlmanacTrader that shows the seasonal pattern in eighth years.

We also have a ton of other evidence that September might be a rough month for the bulls; Hedgefund exposure at nosebleed levels, VIX seasonality strong in September, a record number in VIX shorts, record long in SP500 futures by speculators, etc.

All the above facts are irrelevant until we start to see some price deterioration in the SP500. 

The first step would be for it to trade below its 5-day moving average and then have that average act as resistance.

Secondly, we need to see some weakness in some of the momentum names, specifically ACIA, TWLO, and SMH. Until then it's going to be hard to press shorts.

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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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.

Don't Be Fooled

The market continues to trade sideways in a very tight action but don't be fooled, underneath the surface stocks are working. The current action is the opposite of what we saw a year ago when the indices were grinding higher, and individual stocks were stuck in the mud.

AXGN, XPO, ICON, KKR, ATSG, GWR, AIRG, TPIC, CSX, UNP, KSU, PGND, ASPS, CLMT, are the stocks on my list today. Very simply, I'm looking to get long these stocks if and only if they go through yesterday's high plus .10 cents.

Swing trading gives you the opportunity to take advantage of short-term price swings that happen in most stocks, these moves typically last 5-10 days. I find it to be a great compliment to passive investing.

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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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.

A Breakout Is Imminent

I'm always intrigued by huge bases from stocks that are trading near their 52-week low. Normally a prolonged period of contraction leads to a prolonged period of expansion. Iconix Brand Group has been in a range for roughly 11-months, the stock has traded between roughly $6 to $8.75. Previously the stock was in a persistent downtrend since September 2014 after hitting a high of $44. After a massive gap down in November 2015, the stock started losing momentum to the downside and started to trade sideways. This is when the buyers and sellers start to find equilibrium, very simply, the sellers start to run out of inventory and or the buyers are taking all the supply plus a little more.

At the end of the base right before the stock explodes to the upside what you tend to see is the stock hovering near recent highs instead of constantly testing the lower end of the base.  This is exactly what is happening right now with $ICON as you can see in the chart below. Based on the price pattern it is obvious ICON has a new set of stockholders that see greener pastures ahead.

If ICON can clear the top of its 11-month base it has a very good shot at making a significant move in the short-term.

Iconix Brand Group, Inc., a brand management company, owns a portfolio of consumer brands across women's, men's, entertainment, and home industries in the United States and internationally. Its brand portfolio includes Candie's, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Marc Ecko Cut & Sew, Zoo York, Sharper Image, Umbro, Lee Cooper, Strawberry Shortcake, and Artful Dodger.

Previous Articles about bases;

ETSY BASE

TAHO BASE

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. 

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

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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.

Conundrum

Individual stock set-ups are there, they are ready, all they need is a little push and help from the market.  The sideways action in the last six weeks is the reason why I have so many names on my list, however not many have been triggering.  The trigger rule is simple; the stock has to go through the previous day plus .10-cents.

Tomorrow we have the NFP number due at 8:30 am and that can dictate the action for a few days.  At the same time, breadth is and has been deteriorating to the point in which I think will impact the market in the short term.

Below you have the 5-day average of the difference of 1-month highs versus 1-month lows.

Here you have the average of SP500 stocks above their 3, 5, 10-day moving average.

The question becomes; ignore the indices and breadth and just take the set-ups? There's never a clear sign and the outcome will always tell you the answer in hindsight.

NSM, XPO, TTMI, CRUS, ZAGG, NVRO, TWOU, JACK, OSK, ROST, MIDD, SON, CPHD, MGT, VZ, ERII, MITK, YNDX, CGNX, ICON, LC, CHGG, ELLI, TWLO, HLF, TZA, SOXS.

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. 

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

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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.

Trading Is Random

Yesterday was a perfect example why I rather let the market narrow down my watch-list rather than do it discretionally.  Cypress Semiconductor (CY) was on my list, but I decided not to put the order in because I felt that the float was too large and that the semiconductor sector was extended.  Mid-day yesterday a buyout rumor hit the wires and CY at one point was up 10%.  There's a lot of randomness in trading, and while we might have a feeling of which stock has the best chance of being the biggest winner for the week, we never really know.  Long term, the biggest winners share certain characteristics that make a difference, but in the short-term none of that matters.

All my buy orders had an exact buy time which was 10:30 am, out of 23 names only three triggered after that time, 1 (DLTH) triggered before 10:30 am.

My list today is a lot longer than I would like it to be, the recent 6-week consolidation is the reason why I have so many names. Many stocks like the market have been moving sideways marking time.

I have an interest in the stocks below if and only if they go through yesterday's high plus .10-cents.  I consider these swing long ideas with a shelf life after they trigger of 1-10 days.

ATSG, XPO, NSM, CRUS, SNCR, MELI, TWOU, OSK, ROST, MIDD, LOCO, TWTR, VG, CYBR, MGA, SON, AR, ELLI, MGT, ERII, GV, ININ, CPA, MPET, CGNX, SFLY, TWLO, YNDX, CHGG, LC, ICON.

If I wanted to narrow down the list and not allow the market to do it for me, then I would prioritize the list based on their float, the smaller the float the higher in the list it goes.

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. 

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

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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.

These Stocks Are Ready To Be Squeezed

The post BREXIT gains in the SP500 have been consolidated in a very bullish manner by most counts, while the gains in the SP500 have been muted some individual stocks have done very well. To put things in perspective, according to Bloomberg the SP500 has traded in a range of 1.5%, the smallest range since 1965.

In this light volume environment, there are a few stocks that with low floats and high short interest that look ripe for short squeezes, the type of squeezes that happen when individual stocks are running red hot.

DLTH, TWOU, CHGG, ININ, DV, CGNX, BMO (large float) are a few of the stocks that are trading near 3-month highs with small floats and high short interest ratios.  You can get the details about these stocks here.

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

WWW, MELI, ROST, CASY, SON, SKYW, RSYS, CY, LC, YRCW, EXAR, NSAM, YNDX, SFLY, MGT, are also of interest for swing trades. There are many different ways to narrow down this list, you can do it by focusing on the ones that have low floats, high ATR'S, low price, high price, etc.  Or you can allow the market to get you in or keep you out by just focusing on the one's that break the previous day high by at least .10 cents.

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. 

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

Work With Me

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.

Range Broken, Now What

The market finally showed a little volatility today, the SP500 broke its 2-week range to the downside. I believe that breadth gave us a heads up that the recent range was going to resolve itself to the downside; 1-month and 3-month lows were expanding, the advance-decline was also showing less participation, you can see the charts here--> Jul. 28 at 08:24 PM and here Jul. 28 at 08:16 PM.

Here is a possible roadmap for the SP500, H/T AlphaTrends

Underneath the surface, we still have some decent swing ideas that if the market cooperates they should do well.  $MTW $ NTES $HLX $WBMD $AYI $YY $SGYP $MSM $CVGW are some of the stocks of interest on the long side if they are able to break through today's high.

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. 

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

Work With Me

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.