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.

Friday, August 18, 2017

Change Of Character

Individual stocks are under pressure, there's no doubt about that. It's been a long time since we hit back to back oversold levels in stocks in such a short period. We were a little oversold last week, and that led to a short-term four-day bounce that disappeared in a couple of hours.


Without a doubt, this is a change in character, previous one-day selloffs were followed by V-shape rallies that lasted weeks. Individual stock set-ups have been non-existent for days. Seasonally, we are in a weak volatile period as you can see in the chart below. Forget about taking cookie-cutter breakouts and look for mean reversion plays.


The amount of SP500 stocks above their 3,5, and 10-day moving average is at a somewhat oversold level, but it can get a little more oversold before a dead cat bounce. The tape feels heavy, and this looks more like the beginning of a down move than the end of one.


Here is the bottom line; know your timeframe, trades are trades and investments are investments. Don't turn a swing trade into an investment just because you are down and don't turn your long term asset allocation to index ETF'S into a short-term trade because of a natural pullback.

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.

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.