“You’re walking around blind without a cane, pal. A fool and his money are lucky enough to get together in the first place”.-Gordon Gekko
Well, we are about seventy two hours away from the first trade for 2013. We make too much of resolutions, they are overrated, but it is good to try to find an edge and make improvements where possible. Information and news flow are key when it comes to trading, and the faster the better. There are plenty of services that give you real time news, some are better than others, but the better ones will cost you a fortune. Not everyone can plop down twenty grand for a Bloomberg terminal.
News happens so fast now that it’s truly mind boggling. High frequency traders have actually built algorithms that read headlines, parse through key words, then trigger bids or offers. How in the world can the average guy compete with that? The answer is…you cant. So you need an ally, you need an edge.
I wrote a brief piece yesterday about Twitter, but Stocktwits is what I use for my trading. I like the idea of having hundreds (thousands really), eyeballs on the market. There are many phenomenal tools that come with Stocktwits (video, chart analysis, conversation, market analysis etc). Often times I will be long a stock that has a sudden move, and I don’t know why. I can type in the symbol on Stockstwits and instantly find the news, I will see comments from traders, and in most cases, valuable links on what may have just happened. That is the beauty of eyeballs, there is always someone out there that has caught a piece of news that I may have missed. That is the beauty of community. Everyone shares, you’re not alone..and that in my mind, is an edge.
Here is an example of what $AAPL looks like on Stocktwits. Here you will find commentary, videos and charts galore if that is your thing. Stocktwits has been called the Human Ticker and I think that is a great description. I like to call it “The New Tape”.
Stocktwits isn’t just for “kids” anymore, as portfolio managers, hedge fund managers and analysts of all types now use the service. It evens the playing field in a very big way.
The people on Stocktwits are generally phenomenal. If you have a question or want to get a read on one of your stocks, go ahead and ask, most of the community “wants” to help and add value. I don’t know to many places on the web where you will find this kind of give and take. If you are new to trading the learning curve for you will be fast and value added.
This market can be an evil mistress at times, and I want to have every angle or advantage I can muster. I get that here.
There are so many terrific tools that Stocktwits has to offer, so set up an account and tool around. I think you will be glad you did. Everyone needs an edge. It works for me big time.
Have a great 2013.
You can get a free trial to the Upsidetrader site right here.
Just as $AAPL has replaced so many mainstream businesses over the last ten years, (remember Sam Goody’s?), so has Twitter. Print media is fast becoming ancient (Newsweek packed it in), and digital media is the new game in town.
News can break on Twitter within a nanosecond, news that could never be discovered by the mainstream news media. I remember when Bin Laden got taken out, someone tweeted in the wee hours of the night that he thought it was strange that a Blackhawk helicopter was hanging around. The rest is history. Now anyone with a mobile phone or a laptop can “break” news on anything. Location, location, location. The mainstream media can’t be everywhere, but we can.
Twitter, for me, has replaced so much noise. I can zero in on where I want to be. Even the evening news refers to events that “broke on Twitter” that day. The world is changing, what was relevant just hours ago gets rendered as “old news” quickly. There are over six billion people on earth, that’s a lot of eyeballs.
I follow some people on Twitter, but mostly news. I don’t care if you had a ham sandwich for lunch or what brand of beer that you just popped open. I certainly don’t care when you Foursquare me where you are eating a freaking bagel. That’s the noise.
So here are some Twitter folks that I like and respect that add value to my day.
@howardlindzon Venture capitalist extraordinaire. Founder of Stoctwits. Seen on Bloomberg and CNBC. No BS, real deal insightful opinions on tech, social and investing.
@reformedbroker Downtown Josh Brown brings it everyday. Who every young blogger wants to emulate. He has figured out how to put 26 hours in a day because the guy is everywhere. A great follow.
@thestalwart Joe Wiesenthal is a writer for Business Insider. He is always writing and breaking news. Great follow if you’re a news junkie.
@niubi- Bill Bishop is my guy on China, and China will play this year.
@JimRikards author of Currency Wars. Great thinking on global macro, politics and currencies.
@abnormalreturns Our friend Tadas puts together the best links on the web everyday. A great place to go to filter out all the white noise and zero in on links of interest.
@adamfeuerstein Great coverage on biotechnology
@talentedblonde Great retail coverage from Kristen Bentz
@ericjackson fund manager with a great insight into technology
@keithMcCullough the best hair in financial media, calls a spade a spade, that’s why I like him
@bclund Brian covers stocks, trading and personal experience. Always well done and very interesting.
@allthingsd All things digital. Just a great tech blog to help you stay current.
@chartsmarter Doug gives you some great daily levels on stocks.
@daytrend Vic is the king of market stats on a daily basis.
Twitter can be a blast. Have fun with it, find your own levels of interest and tweet away.
The troglodytes in Washington are on my last nerve as they play tag over a few hundred billion. Really, get over yourselves, and allow us to have some semblance of a market again. The election was the last “wet blanket” that hung over this tape and now its the fiscal cliff, The fiscal cliff has always been there, but the market is proficient at prioritizing these mini walls of worry.
You may not realize this, but the S&P is only up about ten points since the election. We dropped about 80 S&P points after the election and rallied back. Many think we have rallied too much, in fact we haven’t really moved at all.
So if the fiscal cliff gets “solved” by these numnuts in Washington, what happens?” Will we just meander around these pre election highs or put on another leg higher? Or do we jut just collapse because it will just be a sell on the news event?
So many questions, so little time.
I think we rip.
Hi guys, I am without voice tonight due to laryngitis, so I will just post some chart setups.
I think this week will be all about what Apple wants to do. I did a couple of posts over the weekend on AAPL so if you missed it you can check them out on the blog. Fiscal cliff nonsense will be equally important as well in the coming week.
Apple has done a fine job knocking the Nasdaq down, (remember the Nasadq looked like it was going to breakout on Tuesday and Wednesday) as well as putting heat on the S&P.
Apple could see a flush down tomorrow and then a rebound, so keep a close eye on it. I’d like to be a buyer around 470-480 if we get the shot. In the meantime, Apple derivative plays like CRUS, ARMH and QCOM got whacked last week. They should rebound nicely as soon as Apple does.
Anyway, here are some setups to watch over the next couple f days.Also please check the P&L for any changes to stop levels.
PSX- The group is hot and all their charts look higher (see WNR, TSO, VLO etc) I like this one over the 54.33 level for a move into the high 50′s
MUR- A $1 billion buyback just started as well as some already announced spinoffs. The chart looks like it wants to go tag the mid October highs in the mid 60′s.
ARNA- We got stopped on this one a few months back, but it acts well and biotech acted very well last week. Maybe this time it can go. Buy the 9.45 trigger price.
SINA- If this one can break above the white downtrend line that I drew, then watch out above,but for now I would enter at the 46.70 level. the downtrend line breakout come sin a few points higher.
So yesterday I gave a list of reasons why $AAPL finds itself in the crapper. I am an absolute and fierce defender of supply and demand and overbought and oversold levels when it comes to stocks. Even stocks that have crumbling fundamentals get to a price, (I don’t mean AAPL) where they have to bounce. In my view it will be the technicals NOT the fundamentals that will tell the $AAPL story going forward short term. We all know they have great products by now in different sizes, shapes and colors. Blah, blah, blah.
Remember $GMCR ? The stock went from $8 in 2009 to a high of about $115 a year ago. The stock was then pulverized to a low of 16 in July, famous short sellers came into the name and made their case for zero. The stock has since doubled from that low in about four months. It’s now semi sexy again, and the analysts are coming back with a more bullish view. The analysts were invisible at 17 and were way stupid at 115. As you now know, you don’t need analysts in a good market and in a bad market they will kill you.
Point is, everything has a price. In the case of $GMCR (I could give you hundreds of examples by the way), the technicals got overdone to the downside as MACD, relative strength and stochastics were all in the dirt. This may be an extreme example.
A better example may be $NFLX. Here is s stock that dropped from a high of about 300 in July of 2011. It was overdone to the upside, the stock ran into some trouble and was taken to the wood chipper. The stock traded down t0 52 in September.
Here is where it gets interesting in the case of $NFLX. On September 26, just about ten weeks ago, I saw negativity at a level that I rarely saw in a stock. The jokes were rampant. People said the stock was done, they had horrible content, Hulu, Amazon and Youtube streaming were eating their lunch on a daily basis, etc, etc. Puke.
Well, here we are ten weeks later and the stock closed Friday at 93.30. Not bad action. Almost a double. Everyone hated it. Everyone. The shorts got taken out on stretchers.
Back to $AAPL. I am seeing negativity in this name that is eerily similar to what I saw in $GMCR and $NFLX and many other stocks that find themselves in the same situation. You folks that follow the blog know I always say “Buy em’ when they”re cryin’. ” The technicals need to line up though.
My bet is that a rip to the upside is coming soon. It will be strictly an oversold technical bounce. That bounce could be huge. If that bounce can hold, then I will feel better about Friday being a successful double bottom. It’s getting time to be greedy and buy the fear.
Technically speaking, relative strength is 30 and stochastics are below 20 (it’s 15). The playbook says you when the former is around 30 and the latter is around 20 you’re a buyer. I’ve seen these readings get worse before they get better though.
So I look at two highly inferior names to $AAPL, not even close, $GMCR and $NFLX and I analyze their price action. AAPL isn’t bad coffee and antiquated movies. Apple has an ecosystem that defies logic and will probably never be broken.
Monday will be interesting. Lately when $AAPL has a crappy close it continues into the following open. Ideally, a flush lower on big volume would be perfect. The one thing I haven’t seen, which worries me, is a capitulation day, meaning volume is epic, and the baby, the bathwater and the piano player get thrown out. This would tell me that a tradeable bottom is in place.
Circle the 470-480 (weekly trend line support), if it tags that level you have to go deep…..for a trade. Even if $AAPL has jumped the shark, (I believe it has) you have to be all over it there. Everything is a trade at a price. Everything. Even bad coffee. The “buy it and forget it” days are over for AAPL in my opinion, but that doesn’t mean you can make huge money trading it. And this trade will be big. AAPL may indeed tag the low 400′s, but it wont do it in a straight line.
Gene Munster is lost at sea on this too by the way, so just watch the charts. The easy money has been made on the short side, so you need to be picking spots to get long.
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“The fact that a great many people believe something is no guarantee of its truth.” W. Somerset Maugham, The Razors Edge
Everyone is talking and writing about $AAPL today, everyone on planet earth seems to have an opinion, I thought I saw a post from a Trappist monk on the Vatican website all pissed off by the action last week. Let’s just say there is a confluence of negative events contributing to AAPL’s woes right now.
1- Tax selling-This is probably partly true, or maybe just a cop out by the perma bulls. It does make sense though.
2- Evidently the China launch of the iPhone 5 was met with a deafening thud yesterday. Gene Muenster rationalizes the lack of store traffic to a few things: He said the phone was carried in twice as many stores than last time, so traffic just “looked” diluted. He also said, the stores were more organized, anticipating this launch, so pre-orders and special invitations were the culprit.
3- $AAPL will see much tighter margins going forward.
4- The growth players are leaving the stock, as we wait for the baton to be passed to the “value” players, we all know that the value guys move a turtle’s pace. The battle cry that APPL isn’t innovating anymore is growing roots.
6-Canabalization of themselves.
8- Droid phones are kicking some bad ass and taking names…… and market share.
9- There are more shapes and sizes to the product line now than a lincoln log set.
10- When was the last time you saw an $APPL downgrade? They are starting to come fast and furious now. Downgrade cycles suck when you’re a trapped long.
11- Steve Job’s two year blueprint is getting long in the tooth and is starting to grow hair.
Everything is great at a price and that’s all that matters. We won’t know for a little bit if $AAPL put in a double bottom yesterday or not. I nibbled ultra small yesterday, and my plan is to layer in on dips. I do believe though that the halcyon days for $AAPL are over. It will however be a great “trading” stock.
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My Dad was a New York City cop for thirty years. As a young boy I would watch him get ready for work, the last thing he did was snap his gun to his belt. I still remember smell of the holster leather, it was old, weathered and scuffed. Safety on, strapped in tightly.
At night, he would come home, take off the gun, and put it in safe at the top of the closet. He would say to me, “I’m locking up the roscoe for the night”. Cops called guns a roscoe back then. I don’t know why.
In over thirty years he never fired the weapon on duty, except in mandatory target practice exercises. Mt father despised violence of any kind, the only reason he became cop was because the job was available after the war and I guess he liked the idea of a pension and benefits.
One time when I was very young, maybe five or six, he took me to a public pool to see some friends. I was with the parents of friends, but couldn’t find my father for over an hour. It turns out, that some wild man, jacked on booze and amphetamines, waving a broken bottle was terrorizing people at the pool. My Dad, off duty, and then about fifty years old with a heart condition, held this animal down until the cops came.. The maniac took a four inch bite out of my fathers arm, and I still remember my father, that night, laying on the sofa with an ice pack after receiving a monster size tetanus shot.
I asked him why he didn’t use his gun, and he said there were too many innocent people around. He had disarmed this psychopath of the broken bottle at this time.
I could easily put yesterday’s shooting tragedy in Connecticut right up there with 9/11. Fewer folks were killed, but the theme is the same, the lives of innocents were inexplicably snuffed out. Defenseless human beings just going about their daily lives. Poor, sweet children. Innocents were terrorized.
Unfortunately this will become political fodder for the anti-gun and pro-gun people. All I know is that we need to do better. How we get there? I have no idea.