Friday, October 6, 2017

Your Watchlist Is Everything

My rolling five-day watchlist is my best barometer to measure the health of the market for short-term swing trades. My watchlist is everything, it tells me more than watching the indices ever will. As a matter of fact, I don't even have the indices on my screen, I have no idea during the day what the market is doing. I encourage you to take the indices off your screen and allow your watchlist to do the talking.

Your watchlist is everything, it will tell you;


  • Are you looking at the right stocks?
  • Are you flagging them at the right time?
  • Are they moving immediately in your favor after the buy trigger is hit?
  • What sectors, industries, etc are in play.
  • It will tell you whether you should be aggressive or not.


The performance of your rolling five-day watchlists is also very telling.

  • It tells me whether or not gains are sticking.
  • It tells me if I should take profits sooner or hold a little longer for more significant gains.
  • Whether I should be aggressive or not.
This type of post analysis work will tell you all sorts of things about your trading, and at times it will have you second guess your approach. The key is to find a happy medium.

We flagged $JP on 9/28, the buy trigger was $12.41, the stock immediately started to move immediately,  the stock was up 20% two days later, enough gains in such a short period to lock in profits. However fast forward four days later and the stock is now up 40% since our trigger was hit. These type of situations always leave you second guessing, should hold onto a piece until the stock break the previous day low, and hold on to another piece until it closes below its 10-day moving average, etc.?



But then you come across a situation like $AVEO, technically the stock looks great, it hits our buy stop and immediately goes up 8% the same day. The next day it pauses beautifully, and then it takes off in the after hours on the back of some FDA trial news. The stock was up 30% from our buy stop in the after hours, I was counting the ka-chingas, we rang the register on a few shares but wanted to hold onto a bulk of it looking for a $JP type move. Well, that move did not come, the stock faded all day today trading back to our buy price. So on one trade left us with sellers remorse and the other bag holders remorse. Welcome to trading.



The point is to find a happy medium, your watchlists and trades will help you get there. If your entries are strong, maybe you can consider sizing up more than usual on your entries to take advantage of your good timing. If you see that stocks are moving longer than usual then maybe you start leaving a piece on until the stock breaks the previous day low or closes below its 10-day moving average.

Here's how our rolling watchlists performed;




Some of these stocks triggered, some didn't, some had gains initially and then faded. What you want to do is to look at the tracking dates of the names and see how the stocks looked technically that day, I can assure you that if you do that you will find some commonalities that you can reproduce yourself.

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.

Thursday, September 14, 2017

This How You Will Find Your Next Winner

Contraction in stocks with high momentum typically leads to more upside, it's that simple.

Here are a few recent examples.




The best way to find stocks with high momentum is to sort the universe of stocks based on year to date performance (high to low), or the best-performing stocks of the last 3-6 months, look at the top 200 stocks. Once you do that you want to wait until the stock consolidates (don't chase) to within a couple percent from its 20-day moving average, then it's just a matter of waiting for the first hint of expansion to jump aboard.

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, September 13, 2017

You Have To Believe



When it comes to trading and investing you have to do what you believe in, and what you believe doesn't even have to be true, you just have to believe.

Some people believe that the only way to make money is by buying stocks that trade above $15. Others believe that stocks under $10 is where big money is made. A few believe that stocks need to have accelerating sales and earnings growth. Some believe that stocks with low PE is the answer to picking winning stocks. Whatever it made be, you have to believe in it.  Fact is that with the proper risk management the market will give you enough wins to reinforce your beliefs, regardless of the fact if those beliefs are true or not.

I like to focus on the things that are the most important things that make a stock move within my timeframe.

  • What are the things that matter the most within your time-frame? 
  • Is it stocks being above certain moving averages? 
  • Do the stocks have to be above or below a certain price? 
  • Do they need to grow their sales and earnings at a certain minimum amount; +15%, 25%? 
  • Do they have to be a certain percent off their highs?  
  • Do they have to have a low PE?
  • Do they need to be in a current top 20 sector?


This is what you need to figure out, not by reading books from 1920, the 60's,80's, etc. but by actually looking presently at what is working NOW within your timeframe. What are the factors that matter the most within your average holding period?

Things change, and what worked in the past won't necessarily work in the future. If your beliefs about trading and investing come from your own work, then it will be a lot easier for you to have conviction during tough times. If you want to know if stocks need to have to meet certain criteria's to do well like some book or blogger said then just look at the best-performing stocks within your timeframe to see if it is true or not.

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, September 8, 2017

It's Too Late


The popularity of shorting volatility has risen exactly when the most popular short-based ETF'S have lost momentum. A few articles in the last couple of months have highlighted how easy it has become to short volatility.  As you can see in the chart below, SVXY has traded lockstep with the SP500, hitting highs and lows almost simultaneously until recently. The SP500 is off -1% from its recent highs and the SVXY is -16% off its highs. This is a character change for SVXY and XIV.


"Each morning, at the market’s open, Seth M. Golden, a former logistics manager at a Target store, fires up the computer in his home office in northern Florida and does what he has done for years: Put on bets that Wall Street’s index of volatility, the VIX, will keep falling".--NYT


Wall Street’s “fear gauge” has neared all-time lows this year. That hasn’t stopped retail investor Jason Miller from making a nice chunk of change betting it will go even lower.
The Boca Raton, Fla., day trader says he has made $53,000 since the start of the year by effectively shorting the CBOE Volatility Index, nicknamed the VIX. That includes a white-knuckle day on May 17, when the VIX spiked 46% following reports that President Donald Trump had pressured former FBI Director James Comey to drop an investigation into former National Security Advisor Michael Flynn.--LINK
INVESTORS HAVE NEVER BEEN MORE SHORT VOLATILITY FUTURES.

Here's the bottom line; With the can't lose short volatility ETF'S losing momentum this trade just got a little harder, and I would not be pressing my bets nor venturing out into this strategy right now.

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 29, 2017

Now We Can Point Our Fingers

The market is under pressure this morning due to the missile launch by North Korea. Fact is; we've been saying in these pages for the last couple of weeks (here and here) that there's been a slight change in character in the market, the North Korean missile is just something we can blame.

Unlike previous times when the market sold off we did not see a V-bottom nor did we see an uptick in stocks rebounding hard after the sell-off this time around. As you can see in the chart below, anytime we had a spike in 1-month new lows we typically had a day with a lot of stocks going up 4% or more immediately after, that was not the case this time around. Overall, breadth has been slow to rebound, unlike previous times.


The indices are below their 20-day moving averages and set-ups are scarce, act accordingly.

$DVAX $GRUB $NEWA $PLUG are the stocks of interest on the long side for me today if and only if they can get through yesterday's high.


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.

Thursday, August 24, 2017

Today's Watchlist


I have an interest in the above stocks on the long side if and only if they can get through yesterday's high +.10-cents. Stocks move in short-term momentum bursts that last 3-5 days. The returns within those days could be anywhere 5-20% or $5-$20 dollars, low price/small float stocks have bigger percentage moves and higher price/large float stocks have bigger dollar moves. The return within the 3-5 days depends on market conditions, market cap and float of the stock.

Here are two recent trades, one high priced and the other low priced; $GOOGL, $IMGN.


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 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.