Changing Sites

This site is migrating to http://www.thegodoftrading.com/.

Advertisements

#MarketTiming – Stocks To Short

With the general market trudging toward a overall sell signal, several big-cap stocks gave sell signals today and are probably worth a short on tomorrow’s open for a scalp (and maybe more).

Likely, the AAPL miss on earnings today, will be a trigger for a broader market decline tomorrow.  Must keep in mind that the Federal Reserve Open Market Committee will conclude its April meeting tomorrow also.

In other words, there are cross currents galore but…when is it not so?

These are liquid enough for options trading (buying puts, shorting calls, verticals, etc…).

The stocks are:

  • WMT
  • T
  • VZ
  • GOOGL
  • MDT

Interesting that both T and VZ registered sells today, possibly in reaction to the sell-off reversal day in T-Mobile (TMUS) on earnings.  TMUS itself is obviously also a worthy candidate for a short, looking for follow-through on today’s action.

(right click on the chart for a larger view)

TMUS

 

#Greed top could lead to #SPY stumble

CNN Money’s “Fear and Greed Index”, a calculation of seven key market indicators in order to gauge the primary emotions underlying the stock market, appears to have put in a double top at an extreme greed level.

Historically, this pattern has led to significant sell-offs in the general market as investors’ and traders’ greed, fueled by the market’s recent rally, cycle down once again to a prevalent fear level.

There is really no way to tell how far the S&P 500 index (SPX, also the SPY ETF) will fall but the last time this down cycle took place the SPY fell from a high of 211 to a low of 185 (about 250 SPX points, a 10% or so correction). There is no guarantee it will stop there.

Regardless, this is an excellent shorting opportunity across the face of the stock market, just as it will eventually lead to an fine buying opportunity later on.

Market timing.  They say it can’t be done but a study of the chart below should make it rather obvious “they” don’t know what they are talking about.

(right click on the chart to view a larger image)

FEAR_AND_GREED_2016-04-11_1609

#MarketTiming – stock shorts

Market Context: Bearish. 

All trades on sells or shorts from open of 4/5/16.

Swing ETFs: UVXY (from 20.65), SQQQ (18.51), TZA (44.30), UPRO (62.50), NUGT (59.00).

Day/Swing Trades (short) for open of 4/11/16 (options-liquid stocks):

  • WYNN
  • SBUX
  • LLY
  • MRK
  • RTN
  • LMT
  • JNJ
  • MCD
  • BMY

Notable that so many big pharma stocks have triggered sells.

Featured short (put play): PFE.

(click on chart for a larger view)

PFE_2016-04-10_1937

$COMPQ – chop, chop, finally plop!

December’s Nasdaq composite ($COMPQ $COMPX) closed lower than November on higher volume.

In the past that was as simple and elegant a longer-term sell signal for the general market as there was (see red vertical lines on the chart below).

In the past two years, however, it gave way to chopping up and down with alternating buy signals (closing higher on higher monthly volume, the green lines on the chart below)…it seemed almost monthly.  Not quite sure, but I suspect that was because of the Fed Reserve QE efforts in the market making it hard to get any traditional bull-market correction against cheap credit constantly infusing the market (also suspect we may be paying dearly for that Fed manipulation now).

But it appears the simplicity and elegance of the sell is back, and compelling.  If so, the market’s general indexes  (DOW. SPX, NDX, RUT) are going down until further notice, a bear-market trading and investing environment of “sell the bounces” (one is coming up soon) instead of the bull-market dictum to “buy the dips.”

P.S. I first learned the value of this from a poster named “SemiBizz” on Traders-Talk.Com. when he ended up calling the top prior to the 2008 bear market (see the blue oval in the middle of the chart).  He deserves all the credit for his contribution to that most difficult of market tasks — calling tops.

(right click on the chart for a larger image)

NASDAQ_PLOP

$GPRO – not much go anymore

Nick Woodman, the founder and CEO of GoPro Inc., is obviously a fun guy.  He got the idea for the action-camera company on a surfing trip to Australia. He’s reportedly an adrenaline junkie in every which way but loose.  Since GoPro was founded in 2002 and went public last year, he’s racked up an estimated $1.3 billion net worth.  He’s generous privately and a philanthropist publicly. CNBC says he’s ordered a $50-millon yacht that can have a crew of 13.  Practically every photo shows him either smiling from wall to wall or laughing uproariously.

But…

But GPRO, his company’s stock, is down 80% from its high and down 41% from its IPO close.  (It’s up 65 percent on my latest long-term short signal.)  The stock had a great run but that obviously is a over.  It is a niche gadget company that has likely saturated its customer demand.  It may base down here at 18 or so but there’s no real support underneath it and the downtrend continues.

So, as the pleasant Mr. Woodman sails the seven seas in his new yacht, the rest of us can avoid his stock which may end up no bigger than a dinghy.

(right click on the chart to view a larger image)

Gpro2015-12-24_0601

 

#EnergyStocks – when an entire sector fails to follow through…

Well, to state the obvious, a lack of follow through ain’t bullish…

After virtually giving buy signals across the board yesterday (see ERX post below), the energy sector virtually got hit with more waves of selling today.  Given that energy was a leading sector on the market’s rebound from the September lows, there is a big chance the entire market has more downside ahead.

Of those stocks in the sector I follow, the weakest remain: BHI, BP, RIG, SLB, XOM, EOG, NBR, and NOV.  To my mind these are all shorting candidates but it must be noted that the general market is oversold and could push them up again like yesterday.

A bet on the short side here is a bet that both the market and the sector will continue to be bearish.

(click on image for a larger view)

Oil_sector2015-11-17_1614

 

 

 

 

 

 

 

 

 

 

$GPRO and $FIT – a tale of two “Gadget Stocks”

GoPro Inc. (GPRO) and Fitbit Inc. (FIT) sell gadgets, a versatile moving camera and mount, and a wrist fitness monitor respectively.

Not much to say about these equities that is not obvious now and was obvious from the start — they have limited product lines that appeal to niche consumers who will buy fast and quit buying as quickly. Never fails that the stocks like these run up in a hurry on what is essentially a fad and fade as soon as the fad wears off and/or the market is saturated.

Which is why, once again, market timing and technical analysis prove their worth in profiting from both runs up and sells down.

With my latest short-term market-timing signal to sell the market and short stocks from the open of November 5th, GPRO has a short profit of 8.7 percent and FIT a short profit of 15.2 percent as of the close today.  With the market oversold it is time to either tighten stops to protect profits or just take the money and run.

Should be noted that GPRO has been in a hard selloff of more than 50 percent since August and longer term shows no sign of stopping that decline.  FIT is just coming back into its IPO day, a level it better hold or it’ll soon look like GPRO longer term.

(click on chart for larger image)

Gadgets2015-11-12_1257

ENERGY STOCKS had so many sell downs today from over-bought call it an $ERY buy

11/5/2015

Energy stocks, after a decent run for a massive sector, virtually got hit with selling across the board today.

Of those I follow, WFT, PXD, NOV, DO, NBR, XOM, SLB, and RIG all had short-term sell signals.  Given how strong the sector has been of late, this is more likely a chance to take profits rather than a time to enter shorts.

It should be noted, however, that equipment bellwether Baker Hughes (BHI) hardly rallied with the sector, held no gains, and now appears to be heading for new lows, making it a prime short candidate when the overall market gives a timing sell.

But in case this is the very beginning of a new swing sell, it can be played with ETFs — shorting XLE, OIH, or with 3X leverage, buying ERY on the open tomorrow for scalps with tight stops.

(click on the chart for a larger image)

Oil_2015-11-05_1726

$AAPL could take a tumble right about now…

11/04/2015

Having underestimated Apple’s ability to buy its own stock ($100 billion worth so far since everyone else already owns it), AAPL has rallied higher than I expected after its plunge finally signaled the Aug/Sept down swings (they shoot leaders last) but it is now back up at resistance (sizable) and could sell off again, taking the market with it.

Sometimes it seems there is only one stock in the market.

Anyway, it’s been a nice 20 percent climb (that’s a lot of market cap), and could keep going (they have the cash), but might not, right about here.

(click on chart for a larger image)

aapl_short_term_2015-11-04_1629

A longer view:

(click on chart for a larger image)

aaple_longerterm2015-11-04_1630