Thursday, August 25, 2016

The Mid-Week Manhattan. Thursday, August 25th, 2016

Chill Pill

As promised last week, I've returned to my beloved Maker's Mark. In fact it's more than that, I've graduated to Maker's 46, which is aged a tad longer than the original. The gentleman at the Liquor store tells me customers who buy it usually return for more. And while clearly the Manhattan has begun to tickle my fancy and the placebo effect is in full bloom, I'm admiring this older bourbon from their distillery in Loretto, Kentucky,

The Recipe (As usual)

Recipe is: 3 Ozs bourbon, 1 Ozs sweet vermouth, couple of drops Bitters, and a cherry. I use 8 ice cubes and mix bourbon, vermouth and bitters in separate glass. I mash cherry over ice with my fingers then pour over booze. I pour it back to mixer 1 more time, then return it to the glass. 


Evening Listening, et. al.

Rodrigo y Gabriela from Mexico City, muy bueno. Muy bueno.

Presidential hopeful Hillary Clinton took a swipe at Mylan Labs yesterday, and the Bio/Drug regime has been swooning ever since. It's election season ya' know, and populism is in full swing. Fear not shareholders, politicians can resume breaking bread with the money crowd after November, and profiteering in the drug sector will be back in full swing.

My money instincts hint as much. Hillary will waffle on drug pricing, and we can put this price-pessimism to rest. Rest-assured, when the tea leaves settle into the bottom of the cup and reveal a bull, I will step a toe or two into LABU (Biotech 3x Bull) and hold on for dear life. I might even phone the  bankers for more leverage.

For your viewing pleasure a LABU (Biotech 3x Bull) weekly quadruple-bottom basing at its neckline, I think it smart to buy some as soon as we are over this rough patch and the market gives us a signal.

Soros called it "Reflexivity" I believe. I understand this particular biz/politico scheme and how it works. I seek to buy when the scheme appears threatened, and sell when it has been universally accepted. It continues so long as a majority of its participants are rewarded (insurance cos., drug cos., doctors, patients, bankers, and traders).

Alan Greenspan once said, "when a trend can no longer continue, it stops". Predicting the financial end to this whole mishegoss we call the healthcare  system is above my pay grade, and beneath my intelligence. As a trader if I wish to survive, I must simply go where the money is.

Speculation is never pretty. Betting on humans taking more pills and politicians taking more bribes doesn't rest easy with this fellow. And should I profit, the spectre of my small role in the whole scheme may tap me on the shoulder late one night.

But that's what Manhattan's are for.

Saturday, August 20, 2016

The Saturday Replay August 20, 2016

BIDU 081516 Long

Aug 12 Daily: Rising 8 EMA, volume break above 60 EMA (080516), $175 plus possible.

Aug 12 15 Minute: Tight range after Aug 5 move with clearly defined, tested levels above.

Aug 15 Trade Day: Bought 10:10 a.m. break of flag that formed on top of 5M 8 EMA, paying $173.42 thinking $1 stop. Sold half $174.42 and sold second half at $172.88 late in day (3:19 p.m.).

Silly mistake on 2nd half, always stop out on either 15M low or 15M 8 EMA on 2nd half. That cost $1.50 on 2nd piece. This became a challenging trade after a $4+ dollar move in the first 5 minutes of the day. Psychologically, what I was doing was hoping for more from less. The entry was good, it was just late in terms of proximity to target. Pre-mkt I'm thinking $175+ is possible on day, but I entered $173.42 which only left $1.58 on table. It was correct to take this trade, but I used an incorrect stop on its second piece which cost me and resulted in a break-even trade that should have been profitable.

In the future use the 5 day high (seen best on 15M chart) if choosing to enter a trade right at the open. In this case BIDU peaked at $169.49 on Aug 8 after Aug 5 move. With round number $170 above, the smart move would be to say "I will enter half the position on an early break of $170, using a low of day stop assuming it's reasonable." This gives you 3 clear choices, I can either stop out (in this below $169), exit higher on both halves at appropriate levels, or add to the position at an opportune time.

Additionally, on a 15M time frame I could have used the 2nd 15M bar of day for similar trade. If I did this, using first 15M low as stop would have resulted in a break-even trade. Had I used the 15M 8 EMA as a stop I would have netted plus $1 on first half, and just under a $1 on second half.

Finding the setup is the easy part, the trade is where things get messy.

What I Learned on Sunday August 21, 2016

The crickets were out with cooler weather last night. Fall is here, and the bankers are packing their luggage for Jackson Hole.

Cooler weather will continue this week in New Jersey. 

Syria, what horrible mistakes we've made there. The impact of this crisis will be felt for decades. Unimaginable sadness.

On a happy note, the Justice Department acted to eliminate private contractors from jailing Federal prisoners. Apparently the government is way better at incarcerating people. Hmmm.

I believe it currently wise to own shares of Chesapeake Energy and Nike.

"Brooklyn", the movie, is worth checking out on HBO Go.

Oh, according to DEA, marijuana still no good. 


Life, Politics, Weed

1. The ripe time to buy a vineyard in Bordeaux

In wine, "$230 a throw" means $230 a bottle. By 2025 300 million Chinese will be paying between 30 and 50 Euros for a bottle of Bordeaux. You can produce a bottle of wine in France for 1 to 1.5 euros, after taxes and shipping to China, you're in for 7 to 9 Euros per bottle. Estates popular with Chinese buyers produce between 100,000 and 400,000 bottles per year that can sell for 40 Euros "a throw". Despite total hectares planted in France declining since 2000, and Chinese buyers stepping in, estate prices are still unchanged since the 2008 financial crisis.

2. Brooklyn (The Movie) by @Lefsetz

The movie "Brooklyn" with Saoirse Ronan was overhyped, and felt a bit flat early in the film. However, it is well worth a late-night watch when it's just you and your mind. Ellis (played by Ronan) has no future in Ireland, so her sister petitions the church to make a place for her in America. After settling here, her return to Ireland brings up the struggles and choices we all face as independence-seeking individuals. Do we live our own lives, or a life that meets our family's needs? "Brooklyn" can be seen on HBO Go.

3. The destructive, decades-long war on pot hobbles along, thanks to DEA

The Obama administration's decision this week to keep marijuana as a "Schedule 1" drug was met with disappointment by the plant's proponents, but the doors were opened to expand scientific research into Cannabis. Problem is, the government grows lousy weed. The best growers in Colorado and Washington will not be allowed to contribute their harvests to science/universities because they are currently breaking Federal law. This disappointed medicinal marijuana patients, as it keeps the best product and widest variety of strains away from researchers.

4. The Babies Are Dying In Aleppo by @wrightr

Infants are dying in Aleppo hospitals that are being intentionally bombarded by government war planes. There were forty-two airstrikes on Aleppo medical facilities in July alone. 3.7 million Syrian children under the age of five have known only war and displacement their entire lives. All told over 8 million kids depend on humanitarian assistance to survive the day. "The numbers are unparalleled" said Unicef spokesman Chris Tidey.

5. What Team USA's Olympics uniforms could tell us about Nike's impending NBA takeover by @samcmlaird

Nike's new men's basketball uniforms will be on display this Sunday when Team USA square's off with Serbia for Olympic gold. The uniforms were designed at Nike's sports laboratory in Oregon and are made from recycled plastic bottles. Nike claims they have saved 3 billion plastic bottles so far. The company signed an 8 year, $1 billion dollar deal with the NBA and their swoosh will be on display for the first time in the coming 2017-18 NBA season. 

Trading & Money

Justice Department seeks to end contracts with private prisons. Corrections Corp. (CXW) got 33% of revenue from such contracts last year. Their CEO's stock options went underwater today.

Fed policy since the Greenspan years has overwhelmingly benefited the owners of financial and capital assets (Top 10 Pct of wealth owners). The University degree may not be the golden ticket it once was, as Median real wages of college educated 25-29 year olds have gone down since 2000. Post-Brexit maybe isn't so bad, UK retail sales are booming. European banks continue to hold bad legacy debt, and the Chinese reserve drain continues.

8. Chipotle's Food-Safety Crisis May Be Over But the Stock Is Still Way Down by @PattonLes

CMG's market cap has been cut in half over last 12 months. Before the food safety crisis, the restaurant chain had one Investor Relations employee who worked half days. After 3 straight quarters of sale's declines they stopped issuing monthly sales reports. The current marketing campaign is the largest media buy in the Cos. history, and to date it has not worked. Chipotle Board lacks gender, geographic, and ethnic diversity. 9 of 10 board members are white and from Denver area. Expect board shake up, re-issuance of sales reports, and more marketing from Co.

9. Chesapeake Energy SEC Form 4 (Insider Buy)

Chesapeake director buys 50,000 shares on 8/17/16 for $5.59 bringing his total holdings to 246,000 shares. I think stock has minimum 30% upside, it closed Friday at $6.09. I currently own 200 shares at $5.92 and will build the position to 2,000 shares in coming days. This will be a multi-day/week hold for me.

10. Hampton Creek, Maker of Just Mayo, Is Said to Be Under Inquiry

The vegan start-up, which seeks to transform the food industry through use of plant ingredients and technology, is under inquiry by the SEC. The agency claims Hampton sent employees to buy their own products off the shelves of the retailers they supply, without disclosing this to investors. The company has raised $220 million to date, but is losing money. They are losing money, for every $1 of "Just Mayo" revenue, the company pays $1.20.

Wednesday, August 17, 2016

The Mid-Week Manhattan. Wednesday, August 17th, 2016

Chill Pill

First things first, a Manhattan is in order. I'm currently a Bulleit man, which I believe isn't even made by Bulleit, but by a company called Four Roses. Marketing people run the world. Now that I've learned my bourbon is phony I will return to my Makers Mark, which is gluten free I might add. 

Recipe is: 3 Ozs bourbon, 1 Ozs sweet vermouth, couple of drops Bitters, and a cherry. I use 8 ice cubes and mix bourbon, vermouth and bitters in separate glass. I mash cherry over ice with my fingers then pour over booze. I pour it back to mixer 1 more time, then return it to the glass. My current brands are pictured above.


The Drunk Fundamentalist (Pandora)

I have finished my drink. Almot 25% of float shore here, earnings not 'til October. Smart money rarely wrong, so the biz obviously sucks. Cacophony of activists, advisers, and management trying to push this pig to the finish line. Traders get interested above $13.50. Buy it in $12 area, sell it to acquirer  for $18.75. That's about 2.5x next year's sales I think. This company has so many balls in the air that something's gotta' work. Did I mention the reverse merger with Spotify? Oyyyy.

The psychic chasm between Main St. and Wall St. continues. The latter is booming, while the former is suicidal. For me the hard part continues to be narrowing things down to the 2 or 3 best opportunities. 

Summer rolls on, the New Jersey heat is unbearable right now but broke a bit today.

Having a good week, trading is surfing. Do you wanna' ride bullshit all day, or do you want to hang out and wait for the big one?

Life, Politics, Weed

1. Colorado Sells $600 Million in Cannabis in Six Months by @bruvs

Weed is booming in Colorado, state collected $88 million in taxes and fees from Cannabis for the first 6 months of 2016. Revenue YOY growth rate for 2016 is 35%.

2. Trump Casinos' Tax Debt was $30 Million. Then Christie Took Office.

Trump's $30 million tax bill with the state was eventually whittled down to $5 million and paid in January, 2012. One month later Page 6 NY Post reported Christie and Trump were dining together at Jean Georges NYC with their wives. Yayyy.

3. What is flakka? The 'zombie drug' that causes terrifying hallucinations by @createcraig

Recently a Florida State sophomore stabbed a couple and ate flesh off one of their faces while on the drug. Flakka is an amphetamine like stimulant that can cause delirium, hallucinations and can give an individual super-human strength.

4. Hemp in America: Will crop ever return to mainstream agriculture? by @APkristenwyatt

Hemp was authorized under the 2014 Farm Bill for "research and experimental growth". Growing Hemp was illegal from 1937 until 2014 because the plant could be manipulated to produce THC. Hemp seeds are expensive, costing $5-$10 and only 3 states have more than 100 acreas in it (Colorado, Kentucky, Tennessee).

Trading & Money

6. Big Surprise, $WFM Has "Huge Interest" in Meal Kits by @Sentieo

Meal-kit services like Blue Apron and HelloFresh hurting Whole Foods, analyst expectations are "optimistic" for next quarter.

7. Chesapeake Energy Seeks $1 Billion Loan to Extend Maturing Debt by @sallybakewell1

Chesapeake re-financing debt, putting emphasis on debt reduction.

8. Turning Up Volume On Deal Chatter For Pandora by @Mergermarket

Pandora has bought Rdio ("Lean Forward") and Ticketfly (Events, Marketing Analytics). They've engaged 2 advisors, management wants $20, and activist (Corvex) might take $15. Facebook maybe interested, but highly doubt it myself. Liberty Media already offered $15, Sirius (Liberty owned) subject to Pandora competition.

9. Lumber Liquidators Announces Final Resolution In Proposition 65 Lawsuit

The company resolved Prop 65 lawsuit in California, where by Plaintiff claimed Lumber Liquidators did not properly disclose presence of formaldehyde in their products to California customers. Plaintiffs were required to reimburse the Co. for $100,000 in legal expenses.

10. Pump up the Volume? by @Macr0man

This rally lacks volume, but higher stock prices are likely. When election season gets into full swing it may be the time to sell the rally, and turn off the television.

Sunday, August 14, 2016

Monday 08-15-16

1. $YELP 

2. $RUN 

What I Learned On Sunday August 14th, 2016

Life, Politics, Weed

1. Inside The Failing Mission to Save Trump's Tongue

Put a fork in Trump.

2. Why Self-Help Guru James Altucher Only Owns 15 Things by @jaltucher

Happiness is a fool's errand, satisfaction is everything.

3. Saturday Night at Nobu by @Lefsetz

Hollywood is gross, and the masses don't get it.

4. Wisconsin National Guard Activated in Wake of Milwaukee Violence

Shooting seems justified on face of it, body camera video to be released.

5. What NFL Alum Ricky Williams Does When He Gets Too Stoned by @bruvs

I saw this guy destroy Notre Dame at home as a freshman from Texas. Now he's next to Seth Rogen. Wow.

Trading & Money

6. Can Individual Traders Succeed in Today's Markets? by @steenbab

You need to think differently to win. Self-awareness and adaptability are crucial.

7. Envisioning Bitcoin's Technology at the Heart of Global Finance by @nathanielpopper

Big banks want to take Blockchain technology and use it for non-Bitcoin transactions (Stock Trades, etc.)

8. Yelp Inc. (YELP) Given Outperform Rating at RBC Capital Markets

$48 dollar price target here, institutions are accumulating Yelp.

9. Ruby Tuesday and Concordia Skid; Nordstrom and Sunrun Surge

Retail seems strong, Sunrun outdoing Solar City and Vivant Solar.

10. Sunrun Soars on Beating Rooftop Solar-Installation Forecast by @brianreports

Sunrun has $15  price target from Deutsche Bank and $18 from Credit Suisse. They seem to be the best run Solar installation Co.

Tuesday, August 9, 2016

Wednesday 08-10-16

I like $KRO after this 2 day earnings run. According to Yahoo Finance 5MM shares are sold short which represents 23% of out standing float. The round # $7 and $7.05 weekly trigger (shown on chart below) are catalysts that could initiate short covering/new buying. $.10 cent risk max/2,000-4,000 shares.

$YRD (Chinese Consumer Finance) beat on top and bottom line and raised gudance for the year I believe. I'd look for an early push toward $30, then flag (15M) under $30.65 (ATH) for a $1 plus move. Ideally flag occurs before 12 p.m. I think if $30.65 broken on initial push, trade loses some attraction. I will also try break of first 5M high here and/or first pullback pre 10 a.m. $.50 cent risk max/400-800 shares. 

So if I have this right, $JD has 58MM shares short. This morning the stock is up almost 10% after reporting earnings. Looks like lots of resistance in $25 to $26 area (previous swings/200 sma/ema), so stock is likely to trade into that zone. We could assume given the size of the $JD short base, that there is a chance we trade over that $25 to $26 area today. $.20-$.30 cents of risk for $.80 plus/1,000 to 2,000 shares.

$YELP $37.91 as resistance, pre-mkt high $37.49. Long on break of pre-mkt high/$37.91 area looking for $39 then $40. Could also long on break of first 5M high. $YELP has 55MM shares out with 9MM sold short. $.50 cents of risk for $1-$2/400-800 shares.


I made an amateur chase in $BCRX today late afternoon, buying $5.09 and stopping $4.91. Terrible mistake, the chart below shows how overbought on 60M when i bought. To add insult to injury I had it on my top setup list last night, but then missed the big move in the morning. Real poor organization and execution here.

In general I had a poor day, got loose with stops, money chased, and chased $BCRX. This will all be corrected tomorrow by tightening stops, ignoring P&L, focusing on good trades, and absolutely not chasing anything.