Tuesday, August 15, 2017

BOOM

BOOM! just like that the market takes back 75% of the losses it dished out last week. We showed the chart below on Friday of last week, what we saw was a spike in 1-month lows. Typically these short-term spikes lead to dead cat bounces that lately have been turning into V-shape rallies.

Here's the chart; SPIKES IN 1-MONTH LOWS.

The hardest part about these quick sell-offs is finding stocks to buy that are technically set-up properly. The easiest thing to do is to buy the indices. You won't miss the bounce if you buy the SPY, QQQ, DIA, or IWM, and if you have some index ETF exposure you won't feel like the market is running away from you, your back won't be against the wall to put on some positions just to keep up with the Joneses (SP500). The index ETF's will give the necessary exposure you need until stocks technically set-up again which can be days to weeks later.

I only have a few stocks on my swing trading watch-list today, it looks like my index exposure will have to do for now.


I have an interest in the stocks above 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.

Friday, August 11, 2017

The Dog Days Of The Summer

Like always, the indices only tell you half the story, the market has barely gone down, in fact, it's only a few percent off the high, so minuscule that is not worth commenting on. However, individual stocks are telling you a different story. We had a large spike in 1-month new lows, we also had a breadth flip; 430 stocks are up +25% or more vs. 509 that are down -25% or more in the last 65-days. This is pretty amazing considering that we are barely off the highs, what it tells you is that a majority of stocks were holding up well but not really going gangbusters on the way up; low volatility on the way up and high volatility on the way down.

Here are some charts;

Breadth flip via stocks up and down 25% or more in the last 65-days.

Spikes in 1-month new lows often lead to a dead cat bounce.

When we get to 200 or more stocks down -25% or more in a month the bounce will have more sticktoitiveness.

Bottom line; I would tread carefully here. I were looking to play a bounce I would first start with the indices, then I would look for stocks that reacted great to their earnings report and try to buy those, for example; GRUB.

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 9, 2017

Breadth Has Been Weak For Days

The market is under pressure this morning, many will point at Donald Trump's "FIRE AND FURY" threat to North Korea yesterday right before the close as the reason for the weakness. The fact is that breadth has been weak for the last 11-days measured by the number of stocks printing fresh 1-month and 3-month lows. You can also see some of that weakness in stocks down 13% or more in the last 34 days, the pattern has been an expansion of new lows.

The charts below tell you the whole story; CLICK TO ENLARGE.

STOCKS PRINTING FRESH 1-MONTH LOWS.

STOCKS PRINTING FRESH 3-MONTH LOWS.

STOCKS DOWN 13% OR MORE IN THE LAST 34-DAYS.

Based on the number of stocks down -4% or more versus the number of stocks up 4% or more on a daily basis you can clearly see that there has been more distribution than accumulation.


Here's the bottom line; you have to give the benefit of the doubt to the bulls, it has been a losing proposition to side with the bears. However, there is time to press, and there is time to sit back. The best thing to do right now is to look at stocks that reacted well to their earnings release, find out why and put them on your personal watchlist to buy when they set up technically, for example; GRUB, and TWLO.

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.


Monday, August 7, 2017

Kids Are Almost Out Of Camp



The market is holding up well, the Dow Jones is working on a very nice winning streak, the Q's have been consolidating for the last 11-days, and the small caps are lagging.

There's not much to say, we're in August, kids are almost out of camp and many parents are looking forward to vacation this month.

August is known to be a shaky month for equities, but so far it has been smooth sailing. As far as individual stocks we are not seeing a whole lot of momentum. We've seen a few earnings blow-ups in some of the high-flyers; PI, AAOI, COHR. Holding through earnings is always a crap shoot.

IRBT, NFLX, AAL, AXON, and VSTM are the stocks on my watchlist today. Stocks, for the most part, move in short term momentum bursts then trade sideways to down and then they repeat the process. Just go through charts, and you will notice the pattern.  What we want to do is take advantage of those short-term bursts and repeat the process over and over again. Believe me, it can be done.



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, July 27, 2017

Regrets, I Had A Few



Trading is full of regrets:


  • I regret not selling on the way up.
  • I regret selling too soon.
  • I regret taking such a small position
  • I regret taking such a big position.
  • I regret holding through earnings.
  • I regret not holding through earnings.


The list of regrets from trading could go on and on. And the fact is that all these regrets, for the most part, are due to the outcome of the trade which you have no control over.

Focus on what you can control, take full advantage of your strengths, minimize your weaknesses, know that there is no perfect system and that a lot that happens in trading could be chalked up as random.

On another note; I love the trading videos that over scrutinize and analyze losing trades like if they are not supposed to happen. Losses are unavoidable, tweaking your method every time you have a loss or series of losses is only going to drive crazy and make you chase something that does not exist.



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.

Don't Chase Facebook

The market is slightly extended in the short-term and Facebook's positive earnings reaction is adding a little more fuel to the fire.  Facebook is up $12 dollars pre-market, this is a huge gap for a stock that has 2.3 billion shares in the float. Chances of Facebook digesting this gap up for a few weeks is a high probability event, don't chase it.

With the market so extended in the short-term, good risk-reward swing set-ups are drying up. There aren't many out there right now. Over the next 5-days or so I will be extremely selective with new buys.

We are in the middle of earnings season and it's going to heat up next week with over 1,400 stocks reporting, check the earnings date for your holdings and potential buys. Holding through earnings is a crap shoot.

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, July 26, 2017

Bitcoin Is A Fad

Howard Marks's memo is out and it's a doozy, he covers EVERYTHING; FAANG, PASSIVE INVESTING, DIGITAL CURRENCIES,  and the high level of stupidity we are witnessing right now.

In my view, digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme), based on a willingness to ascribe value to something that has little or none beyond what people will pay for it.  But this isn’t the first time.  The same description can be applied to the Tulip mania that peaked in 1637, the South Sea Bubble (1720) and the Internet Bubble (1999-2000).  

I absolutely am not saying stocks are too high, the FAANGs will falter, credit investing is risky, digital currencies are sure to end up worthless, or private equity commitments won’t pay off.  All I’m saying is that for all the things listed above to simultaneously be gaining in popularity and attracting so much capital, credulousness has to be high and risk aversion has to be low.  It’s not that these things are doomed, just that their returns may not fully justify their risk.  And, more importantly, that they show the temperature of today’s market to be elevated.  Not a nonsensical bubble – just high and therefore risky.--Howard Marks

Read The Whole Thing

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.