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ADA Journal

Discussion in 'Trade Journals' started by anotherdevilsadvocate, Jun 19, 2016.

  1. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I'm thinking I'll post market thoughts, and stock/company thoughts.

    Past performance is not an indicator of future performance, but past actions can tip off future performance.
     
    OldFart and T0rm3nted like this.
  2. T0rm3nted

    T0rm3nted Moderator
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    Good luck. Will be watching!
     
  3. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    One of the great things in life is how so many things are normally distributed. Watching Shadow Trader analyze the futures market, one thing that stuck with me is how they talk about tapering in volume. And if the market hits a high (or low) without taper before pulling back, then they call it a poor high (or low) with the expectation that the market will come back to fill out the distribution by going past that extremum. At the endpoints of the distribution you are to have low volumes. And if there is a gap in price, then they expect price to pull back and fill the gap -- think they call it a liquidation break -- and that this pullback can often be strengthening the market, eg if the pullback is orderly.
     
    Onepoint272 likes this.
  4. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    REGN looks like it's ready to go down. It's been in a range of 350-430.

    [​IMG]
    In the above chart I've boxed 4 parts where REGN went to the low part of the distribution/range and had high volume. The last box is a big red candle.

    Let's look at a weekly chart:
    [​IMG]
    The weekly candles have not been bullish at all in this range. But before last week, they at least had bottoming tails when they hit the lower range.

    For those who like patterns, there's also a head-and-shoulders pattern with lower right shoulder and higher volume in the right shoulder.

    I believe lower prices are in its future, but this may pull back to 390
     
  5. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Tough to find long plays this week. Here's a swing possibility in CRUS.

    [​IMG]
    I've boxed 4 days where it's had big volume above 36.18.

    This is a semiconductor company which has been one of the stronger sectors lately, but some have been encountering selling pressure (MTSI, SYNA, MSCC). If the sector does stay strong, CRUS has been holding up better than a lot of others.

    Stop at 36.18 for the swing, solid buy if it pulls back to 33.85
     
  6. Ciao (Sheppy)

    Ciao (Sheppy) Well-Known Member

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    wonderful idea ... well done ... even if isn't my type of trading I always appreciate a good work-ideas of others
    good luck .... nice place there :cool:;):D
     
  7. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Swing play in LITE

    [​IMG]
    First box shows swing low with low volume.
    Second box is a gap up after the swing low, with high volume.
    Price is now coming back to a trend line.

    Just to mention some patterns:
    There's a kind of inverse head-and-shoulders pattern.
    If you take a bigger view of the chart you can see a cup-and-handle (and this previously made a cup-and-handle that worked out in February)
    [​IMG]
     
  8. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    LITE taking a bump today, but 23.98 is not being taken out.
     
  9. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    LITE has a downtrend resistance, meeting it on light volume is not a good sign.
    [​IMG]

    REGN gapped up from yesterday and has light volume, so it's heading up. Look for the 6/17 high ~370 to get back short.
     
  10. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    MNST is at the end of a wedge, it looks to break out to ATH
    [​IMG]
    In the same sector as a couple of hot names (COT, FIZZ).
     
  11. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Have an eye on GBX, which just happens to have excellent price ratios.

    Weekly chart:
    [​IMG]

    Will be backtesting the 50-week ma soon.
     
  12. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    LMNX had a good day, big volume and closed near the high. Also, it's starting to peek out of the range it's been in for half a year
    [​IMG]

    Estimates say earnings will grow 56% per year for the next 5 years. I don't think that accounts for the completed acquisition of Nanosphere for all cash, that will be accretive to earnings by next year.
     
  13. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    FUN may be starting to run.

    [​IMG]

    Pays a 5.6% dividend, and is estimated to grow earnings 25% per year for the next 5 years.
    Chart-wise, it tested the 200-day sma and promptly shot up past all the moving average resistances. Above-average volume the last two days.

    http://finance.yahoo.com/news/cedar-fair-reports-4-increase-080000428.html
     
  14. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    This one is looking less convincing as a head-and-shoulders short now, as it has found an uptrend AND the IBB is making a basing pattern. Biotechs is a sector that promises growth, which is so hard to find around the world nowadays.

    Updated weekly chart:
    [​IMG]
    The MACD went as low as it's ever gone. There's only one way to go once you've hit bottom...

    Short term 15 minute chart that just shows the uptrend support
    [​IMG]

    I thought the high volume that was happening in the lower range of 350-450 was distribution, but if lower lows don't get made then that was accumulation.

    Here's the IBB, that has a downtrend resistance it is bumping up against BUT has been trying to make a base
    [​IMG]
    Same as REGN in the 15-minute chart, you can see an uptrend support.

    In the short term for REGN, that support may be broken but beware of that base. It likely will be tested one more time. But whereas the head-and-shoulders pattern would call for a fall to 270 ultimately, that is looking like a tougher row to hoe.
     
    #14 anotherdevilsadvocate, Jul 10, 2016
    Last edited: Jul 10, 2016
  15. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    No Master Buybacks

    A few days ago Cramer did a segment on corporate buybacks, and touched on many good points. I have been very wary of buybacks, and Cramer was not complimentary about them either. Cramer is no dummy, although he may be a puppet.

    One thing Cramer said against buybacks is they create the PERCEPTION of growth. And that's something I totally agree with, and needs to be understood.

    But from there Cramer got weaker. Next he said buybacks should be replaced by dividends, because that repels short sellers. I'm not so convinced by that because generally speaking dividends are fixed events that can be easily avoided (the only exception: special dividends). Moreover even a 5% dividend (i.e. 1.25% quarterly) can be overcome by a 20% price drop.

    But Cramer's weakest point was when he praised AAPL's buybacks. And that's where I'll pick up.

    At it's essence, a buyback is a company buying into a company. Should you buy into a company that has high growth, or one that has low growth? This is an easy question! You should clearly buy a company that has high growth. The only companies that buy back their own shares should be companies that are GROWING earnings.

    Instead the reality is that a company that is doing buybacks is probably doing so because their earnings are stagnating, and they have resorted to trickery to make it look like earnings are growing (hint: look at revenues for the truth). Shareholders want to see earnings growth from a company, not P/E being lowered (artificially).
    Buybacks contribute nothing to growth.
    Buybacks contribute nothing to shareholders. That money would be better spent buying a company that is growing, than buying a company that is stagnating.

    My disinterest in AAPL buybacks is because AAPL is not growing right now. They should be using their money to buy a company that is growing, not buying back their own shares in a stagnating company. Apple often gets denigrated for lack of innovation, but they clearly continue to blaze new trails down paths of arrogance. It is hilarious to hear AAPL shareholders having so much confidence in their buybacks, thinking "it's just around the corner" when everyone will realize the "true value" of their shares. So much arrogance. 40 million shares every day for the last 2 years have been traded in a range $90-$130, but they say the value should be even higher so they are happy to buy back. Try growing! What have they been doing with their money? Buybacks, and keeping cash overseas. How much value is that cash generating with today's interest rates?

    We are in an easy money period. When hard times come in the future, the Fed will not have anything they can do to spur growth. So then how will companies grow? They will have to create growth either organically (requires R&D) or in-organically (ie M&A). In either case, you do not want to be the company that spent billions buying into a company that was not growing, and was only intent on acts of subterfuge.
     
    #15 anotherdevilsadvocate, Jul 10, 2016
    Last edited: Jul 10, 2016
  16. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    SHW looks like a short.

    Finding this resistance in 15-minute chart, holding for a week that has been pretty good for the overall market
    [​IMG]

    Daily chart just to show there's a gap that couldn't get filled, not even with this week
    [​IMG]

    This could go down below 260. Carries a forward P/E of 21.1 (this is usually non-GAAP on finviz) with only 10.8% eps growth, so at best a PEG of 2, and P/B over 20.
     
  17. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    I have this channel for PLNT, so I had to take the short
    [​IMG]


    Looking at 5-minute chart, when I saw it finally push to the top of the Bollinger Band I had my signal.
    [​IMG]

    Maybe my issue is that I don't think Planet Fitness is a $2B gym, when Globo Gym from the movie Dodgeball was only $4M


    But I wonder which is more fictional. According to finviz, PLNT has a negative book value, only $0.40 in cash-per-share on hand, and 60M shares left to float.
     
    Onepoint272 likes this.
  18. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Looking at PRMW weekly chart
    [​IMG]
    This was moving in a nice upchannel but seems to have found a major resistance ~12.37, which has stopped progress further up the channel. Meanwhile the supporting trendline has continued to (so far) hold, and we have a wedge now. I think it'll fall out, and hope it'll finally go down to the lower Bollinger band ~10.50.

    Another stock in the same sector is FIZZ, which at a glance had a real good day considering what happened in the general market.
    Daily chart, it's managed to stay in its up channel
    [​IMG]
    Absolutely huge amount of volume today, finished +6.6% but was over +14% intraday. That may be a sign of weakness, considering its decline leading up to today.
     
  19. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    A Rebirth of Retail

    Everywhere I go (by "where" and "go" I of course mean "message boards" and "visit by clicking a bookmark in my web browser") I see the opinion that Amazon will ultimately kill retail. Certainly Amazon has the physical retailers by the short and curlies. But I think there are some things the retailers can do to save themselves.

    When I look at physical stores vs online shopping, I see that yes online shopping is cheaper and more convenient. But so is eating at home (especially e.g. microwave meals), yet people still go out to eat at restaurants.

    Retailers should look toward (fancy) restaurants to see how they can survive. Of course the similarities between restaurateurs and retailers are not exact, but their success can inspire some changes in the retail industry. For one thing, service. Like the server that carries your plates, fills your drinks, and can inform you about the menu; that person really helps you with your meal. Retailers need to attract salespeople that are excellent at
    their jobs. I say excellent because the situation is really dire, and you don't want to risk your survival with marginal servers.

    Imagine phoning in your shopping list to the retailer, and they bring out some clothes for you to try on when you get there. Remember, the nowadays shopper is used to choosing something from an online catalog/menu; so all retailers should have something like that ready. But the store will provide a place for the shopper to try things on before actually buying.

    Another thing is the retail establishments qutie frankly need to make themselves more scarce. Part of the draw to some restaurants is that they are so hard to get in to/are always crowded. Scarcity breeds desire. Also retailers have many more physical stores than is needed in this day and age.

    I'm not saying they need to abandon all those properties either. JC Penney could keep some properties and use them as storage, or as their own little TJ Maxx. Stores like Ross and TJ Maxx have been successful because they buy clearance items from the retailers like JC Penney, when Penney is trying to unload inventory that is going out of season (eg winter coats at the end of winter). Ross/Maxx buy those clearance items and store them over summer to sell next winter. And they do great business like this. Why keep acting like this if you're Penney? Turn some of your excess stores into storage places to hold inventory, instead of selling them at too low prices to smaller companies that are ultimately taking your business.
     
    Syynik likes this.
  20. anotherdevilsadvocate

    anotherdevilsadvocate Well-Known Member

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    Do Businesses Really Want to Go to Robot Workers?

    There is a lot of angst when people consider the future of work. We know that many jobs can be automated; a large number have already been automated (flying planes--humans are only involved in takeoff and landing, reading diagnostic imaging scans, some surgeries, etc.), and many more are being automated away as we speak.

    But one thing we should have faith in is the imagination of humans. There is a podcast I listen to (Money For the Rest of Us) that has made me feel more comfortable about robots taking some jobs. For one thing, when robots take the job of making hamburgers, that gives humans more free time. And that time can be used to create another job that does not exist today. So goes the thinking.

    Here's one episode of the podcast that gets into this; this page has a SoundCloud player to listen to the podcast, and below is a sort of transcript of part of the podcast. http://moneyfortherestofus.net/mny112-retirement-depends-robots/

    Another issue that I think should be considered, is if robot workers would eliminate the companies employing them? Let's take for example a home building company. Companies will switch from human workers to robots because that will improve their bottom lines.
    https://www.cnet.com/news/watch-a-lightning-fast-robot-build-a-house-in-just-two-days/

    But why let such a company make any profit at all? Why not collectives of homebuyers buy the robot and build their own houses? When their houses are done they sell the robot to the next collective and make (most of) their money back.

    Companies are needed because they train workers. If they are just using robots, then we don't need companies to provide their automated service. We can buy the robots ourselves, at least for goods that are common/everyday. And really, who wants that kind of job?
     

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