Fed Rate Increase

12/13/17

Overall Market-

Stocks resumed their upward movement, with the S&P 500 and Dow hitting fresh record highs ahead of the widely anticipated interest-rate increase from the Federal Reserve, and following news that Senate and House representatives had arrived at a deal on tax reform after days of negotiations aimed at resolving discrepancies in their respective bills.

Details of the consensus are not yet clear, however. Tax reform was a key promise made by candidate Trump, with pledges to lower corporate taxes adding to the positive sentiment among companies and investors in 2017, when stock markets surged to record highs.

Typically for markets rising interest rates benefit bonds more than stocks due to the nature of a risk adjusted return favoring bonds in a higher interest rate environment. However, In my opinon interest rates have been low for so long the only recourse is to raise rates. Due to the length of time between increases, there is a good chance the market completly ignores this incramental increase.

VIX (Volitility) VIX up off lows and slowly moving higher, looking for a spike as we remain historically low levels.

NVDA (update 12/13/17 weakness continues here, strong bearish candle formed today. Expect further selling and potentially a retest of $180) Daily chart failing to break or even test critical moving averages to the upside. I am seeing this as a signal for continued weakness. On watch for a potential long if price action remains and holds $180 level.

FCX (Freeport) (Update 12/13/17 Bulls in full control. Potential to test 52 week highs with this strength $17.06, great trade with strong technical support.) Bulls in control here, trade thesis working. I am not in this position and was stopped for breakeven. Great idea and technical, execution wrong for me. Hopefully someone has this for continued strength. Of note in his chart is the DOJI that formed in Fridays sessions. Sellers may jump in to test resolve of bulls tomorrow.

CHK  (Chesapeake) (Update 12/13/17 as discussed, resistance is looking to have formed on previous support. Price action under $3.77 would signal bears to fire at will. Credit Suisse announced a price target of$3.00 which matches technical signals called below.)  Bearish channel formed and showing to be true here. No position. Techincals showing potential to test $3.00 in coming weeks. Only caveat to that is Natural Gas, if bullish action on NG pushing price, there may be come sympathy in this beaten down name.

XLE (SPDR Sector energy) Pin bar and bullish hammer on daily chart. Signal for move higher, will need commodities to move higher and give this some steam.

MRO (Marathon Oil) No chance still long - (Update 12/11/17 - weak candle, still long) Long signal, target to test $15.75-$16.00 level.


AMD  (Advanced Micro Devices) (Update 12/13/17 conflicting indicators here. Most likely will need some news even to decide direction. Sector rotation here is really hurting any recovery rally.) Last two trading sessions here are showing some weakness. Shorts are looking to remain in control here without some significant news.

SNAP (snapchat) (Update 12/13/17 price action cooling off a bit. Consolidaiton at this level will be good for a move to test 200dEMA) Bullish move continues here as discussed based on techincals. Still room to move higher here $15.40 will be battle ground for price action. Congratulations to all longs here. I am still bearish on snap in general, this is just a personal bias on the business. I will not pretend to understand what is "fair value" or price targets based on fundamentals.

Natural Gas (JAN 18 contract): (Update 12/13/17 I am full on bull at this price level, I understand this is contrarian to price action but this price level is way over done in my non professional opinion . Doji formed yesterday, consolidation today and a nice intra day volume reversal signal at 9:45 am. Will enter at lows for inventory report play. Anyone unfamiliar with inventory plays should avoid as additional risk will be on the table tomorrow. Weekly reports are released 10:30am eastern, inventory can be found here Following recent weakness, my interest in this commodity has grown. Massive volume during Thursdays session and a key price level held from July contract $2.75 area. Colder weather expectations had this trading positive friday. As of writing, futures price gap up and moving higher. Will look to hold for seasonal/weather rotation. I am long 3 futures contracts 2.775 well as long UGAZ in the robinhood challenge based on this theory (Result, closed all positions for a very small win, exited with volume before flush). There is significant risk here as I am attempting to "catch the falling knife". Although using key price levels to do this, please note that a real bottom has not been put in here, we can still flush and retest lows. Should price action continue bullish I will keep a close eye on inventory report Thursday as a signal for longer term potential here.

Trend Watch

  • $IMGN (Update 12/13/17 alerted swing to subscribers 12/12/17 at $6.00, stop $5.70, techincals have room to run here, volume and potential squeeze on deck.)(update 12/10/17 most indicators here are bullish, RSI cross mid line, MACD strong, patterns confirming. Be on watch for swing alert on this name.)Looking to add above $6.00 for next leg.
  • QBAK Choppy, will remove after this week if price action continues.
  • $HMNY - panic button smashed, what a flush, potential for a bounce.
  • $ONCS (Update 12/13/17 gap filled, chart now clean, move higher can resume, keep on watch for volume.) continue to watch here. Technicals still cooling off. Watching to long above $1.53 being a key fib level.
  • JP - (Update 12/11/17 -  conflicting signals, daily potential for bounce, weekly showing room to move lower. Trend remains short for now, like this for re-run potential.) Has my attention, volume strong, no position, missed entry at $15 level. Not chasing.
  • VRX - (Update 12/13/17 eating my words on this one, what a breakout!, ugly candle on daily, potential for pull back.) Beaten down biotech darling finally breaking long term resistance and closing above 50dEMA. Long term buy and hold (higher risk over all but could be a 3-5 year type play)

Robinhood Challenge: Sold UGAZ, very small win, currently holding TVIX $6.10

 

Low float watchlist plays

  • LBIX : Stopped out as expected here. Price consolidating $1.50. This one is tight, it will break soon. The question is long or short. At this point its a coin toss. On watch for signal.
  • TNDM (update 12/11/17 Alerted swing here $2.40 entry, stop $2.18, 3k size, target $3.00) Will enter long tomorrow, defined risk. Long term swing. Set and forget. Risk here is $0.26 share+-
  • EKSO back at critical price $2.25 (200dEMA) level, watch for direction.
  • EGLT $1.00 level holding. bounce potential only.
  • SALT - (update 12/13/17 - potential pull back here, will look to enter on signal.) some nice geometry showing potential to move into $8.50 level.

 

BITCOIN/CRYPTO

Major chop in price action on both bitcoin and the below names. Keep this on watch as bitcoin continues to grow strength. Now that futures are available to trade, expect some more momentum in all crypto plays until the bubble bursts or people just get bored because gains slow.

Personal opinion, putting myself out there. All of these names are just starting to feel over played. Pops are now being met by sellers, this typically signals retail euphoria is beginning to slow. I am personally losing interest in these names and feel they are well over traded by this point.

  • GROW: 
  • TEUM:
  • SRAX:
  • RIOT:
  • MARA:
  • DPW:
  • XNET:

Hot watch list 12/13/17

  • CUR (HIGH ALERT for breakout)(Update 12/11/17 - DJOI, reversal potential) (still on watch for breakout day, major gap fill here.)
  • MARK (Update 12/13/17 price action bouncing at 20dEMA, weakness continues)
  • EYES Update 12/13/17 squeeze was on point here, run may be over here, watch for a potential breakdown. (short squeeze!)
  • ROKA (needs volume, breakout price $1.14)
  • IMUC (penny, news release up over 100% after hours)

 

Low Float/Small Cap momentum-

 

Momentum is a bit choppy right now. Names are running fast and falling hard. There is still plenty of opportunity to scalp in the currently environment. Follow through is not as strong as it has been in recent weeks, this is allowing some short sellers to step in and drive price quickly lower.

Stop loss hunting has been obvious in the last few sessions. This is where price is flushing quickly and stop losses are being triggered and price falls very fast quickly. DPW today was a prime example.

To avoid getting crushed in these situations reducing size and increasing stop is helpful, a better cure is to not over stay your welcome. Lock those profits and move on!


Momentum disclaimer:
Use caution when trading these low float names, they can crash even faster then they rise. Lock profits and do not look back, never play the "what if" game on these names. You can be up or down several hundred or THOUSANDS of dollars in minutes and in the case of a T12 material halt, you could be in for massive pain or worse be trapped in a position for days or weeks until material evidence is sufficient to remove halt.
 

Closing Notes:

I will be interested to see how price action and volatility trade tomorrow for SPY, DOW. Overall market to me feels over extended and is in desperate need of a pull back from a technical perspective.

My trading has slowed as the year comes to an end, this is mostly just my desire to protect my profits. As well as day trading being incredibly choppy. I am focused on risk at the moment. This is coming from a place mostly of wanting to enjoy the holidays and mantaining momentum into the new year.

Good luck team, Remain humble and hungry!

Disclaimer: We are not responsible for losses for any reason. We are just an investing club here, seek financial advise from a professional before acting on any of this information. This information is strictly my opinion and what i am seeing in the market. The information above is not a trade recommendation to buy or sell. I am not a licensed broker, dealer or finical adviser. Trading comes with considerable risk and my not be for everyone. Past performance is not indicative of future performance. Never trade with money you can not lose and paper trade to prove profitability before using real money.