Trading SPY

Sold short SPY - 200 @ 199.1

NFLX -200 @ 96.21

 

 

Posted in the $100K Silver Ven's portfolio

market update

Previous market update here

We got a warning sign yesterday from our options tool, hardly 2 days into this "buy" signal. But, no sign of VST/ ST signal change yet. So, we remain put. Especially considering it is a FOMC day. We reiterate again that we don't trade around FOMC. We do have 2% and 5%  stops for ST and IT frames.

I am all ears on what the Fed chief will say about our economy. It is just that we don't trade what they say.....GLTA! 

Market update

Previous market update here

The market was on a sell signal from the previous update. After 8 sessions, yet, the market is at the same point (SPX as barometer). However, we have not gotten a buy signal. For this swing trade (next few days), the signal is still on a sell. The market should see lower prices. This call is only for the IT/ Intermediate term.

Could this be the end of the bull market? May be an initiation. We have stops for the long term market charts much lower, so we cannot call this a sell signal on the long term yet. But, we will see higher prices and this swing trade is a buy the dip. My common sense indicators suggest that this will be a buy on the dip. One of the stocks that is an example of this raging bull market is NFLX. NFLX is near its all time highs. Bull markets don't end when the leaders are hitting all time highs. We will take note when the change happens. 

Netflix Inc. & Tesla

 

From the above Fib sequence charts, it should be very clear what the 1st targets for the current trend are. TSLA had a slight overshoot in its frothiness at the 161.8. Trend change before the support lines? I highly doubt it. But, will keep you informed if trend changes. 

Portfolio performance 2013

Please read Introduction 1st.

For the year 2013, net profit at Silver Ven is 23.5%. I am not impressed at all, considering the shame of getting beaten big by the general market ( SPY up by 31.89%), other peers in 2013 and our own performance from previous years. That goes on to reiterate the fact that past performance is no predictor of the future. Our winners for the year were AAPL, FB, NFLX, TSLA, LNKD, ISRG, RAX, TWTR, Index via SPX while we had small net losses in PCLN, GDX, AMZN, CREE, FSLR. I am only mentioning the top winners and losers, we have a big list out here. Our trading involved much more than the above mentioned tickers. One of the problems why we were not up big like the previous years was that the market swings  have become small and quicker. We had a great beginning with the buy-and-hold mentality till April/ May. Considering that we are positioned as a swing trader to maximize gains both up and down, many of these later swings turned into whipsaws cutting into the gains earned prior.

Few good and clean things that we wish to maintain into 2014:

• Position sizing and risk - We are good at proper risk maintenance and proper position sizing.
• Bias - When the market remains irrational for longer than we think it will be, the good thing about us is to sit out when we are in disbelief. Means we do not take opposite trades based on our beliefs. If we do not have good belief in the market conditions, we sit out but not take the opposite trade.
• Stops - While I agree too many swings can cut into profits when we have stops, we do not mind getting stopped out. Belief is eventually one of those swings will turn into a big one far exceeding the small stop losses.
• DCA - When there is a bad trade, cutting the trade is the best thing. We do not average on the trade digging a bigger ditch.
• Widow makers - Traders have a big list of widow makers like UNG, VXX. We do trade tickers like this but are aimed at very short term trading. Never buy/sell-and hold into these tickers.

I wish all our readers and fellow traders a Happy, Prosperous and a Wealthy New Year 2014. Keep up your good spirit, you will never lose!

Weekly NFLX chart

Bigger short squeezes coming.....on capital gains covering! Long from 83$.

NFLX

As simple as it gets, NFLX breaks out on the hourly chart. Atleast the posture looks like so after consolidation of few days. Right now, as I type, the ticker is back in the channel in thr next hour candle. Apparently the volume is on the light side, breakouts of low volume doesn't last. Nevertheless, keep this under your watch list and buy on a confirmed breakout with appropriate stops. I believe that the breakout is to the upside. Should it be lower, short the ticker.

Shortsqueeze watchlist

The following names (TZOO, RENN, GMCR)
1, have been down big in the last 52 weeks (like 50 - 70%).
2, are heavily shorted with a short interest of higher than 30%
3, low float (not low low) compared to the stocks in the same space as they are in
4, All of them are posting consolidation in the last few weeks.
5, every trader and their mother are bearish and short on this list.

Look at NFLX for the trading cues. Let the stocks consolidate. Let the price cross (and close) the 50 DMA on a daily basis. Buy a small position with a wide stop of 5 - 10%. Add more if the 10 DMA and 20 DMA cross the 50 DMA. If they break above 50 DMA, they have potential to go crazy higher.

If the consolidation doesn't lead to breakout above the 50 DMA, no trade. No problem but wait for the play. Don't jump ahead of the game. NFLX is the example, others to follow. It may take few days/weeks for this to happen.

I have no positions in any of the above at this time but I will enter should the play come to fruition. I am not impressed with the fundamentals of any of the stocks, it is a pure technical play.

NetFlix Inc.

NetFlix Inc. announced that it is cutting its 3rd qtr. subscription guidance by 1 million. Looking for a technical standpoint on its security, currently (in premarket) NFLX is trading at 182$.

The lower trendline of the channel dates back to late 2008. If NFLX closes the day below ~ 180$, you can safely short the stock. If the channel holds, buy above 180$ with a 5% stop.