February 5, 2014

Twitter Stumbles and Falls, Green Mountain Sprints Higher – Tuesday’s Charts, $TWTR, $P

twitterbirdlogoThe headlines were all over the map on Wednesday after TWTR reported earnings.  Here are just a few demonstrating the dichotomy of interpretation:

“Twitter Ends 2013 With a Surprise Profit”

“ Market Wrap for February 5: Markets Unsure of Which Direction to Take” 

“Twitter tanks on weak user growth, timeline views”

“Twitter Guides Q1 Revs $230 – $240 Mln vs. Est. $218 Mln; Q1 Adjusted EBITA $10 – $16 Mln vs. Est. $18 Mln; Despite Outlook, Shares Slide 14%”

“Twitter reports a profit as revenue surges”

Now for the really good news / bad news – seriously the call got glowing as the CEO reported search usage up 120% YoY and “Favorites and Re-Tweets” were up more than 35% since introducing changes on Timeline.  And if that wasn’t enough just think about how much easier Twitter will be to use once Topic-Based Discovery is in place.

debbie-downer-300x230But then, Debbie Downer slouched toward the mike and said, “While Q4 was strong it was driven by seasonal factors. Advertisers typically spend more during the holidays. We need to reset budgets in Q1 – wah wah!  The stock took another 10% dive lower reaching $53.74 – Ouch!  Even though the city and county of San Francisco continues to jump for joy that Twitter is located within its boundaries – traders did not agree with the sentiment nor the double speak to cover the fact that TWTR continues to operate at a loss.  In other words it continues to cost the company more than $240 million to keep the tweeters tweeting.  Important to note is that they have jumped on board the advertising train and that does hold some promise to raise revenue substantially.  But hey, being you are only as good as your last trade, the stock stumbled, fumbled, and down right dropped after hours on Wednesday.   Check out today’s chart for details.

2-5-2014 2-51-43 PM_TWTR

Pandora (P) also reported on Wednesday and also disappointed. The ensuing sell off though was much more “orderly” as compared to what happened in the more anticipated reaction over in TWTR.  It was much easier to set trades in P and then return to the chaos that was TWTR trading post earnings.  I’m not sure if it is just me or if other traders would agree that trading against the algo programed computers was difficult in TWTR this afternoon.  Where as over in P the aggressiveness was better rewarded.  2-5-2014 2-13-46 PM_PANDORACheck out the chart on Pandora through the eye of the Eagle.  And at the other end of the earnings spectrum, Green Mountain Coffee Roasters (GMCR) used their earnings platform to announce Coca-Cola’s 10% stake in the company.  Watch out here the stock halted right after the close on Wednesday at $80.88 and reopened at $105.55 quickly dropped to $99.95 and then turned higher with a vengeance – I’m talking over 50% here folks – as of 6:30 PM EST the stock had traded to a high of $131.41 and was again moving lower reaching $117.80.  Blindsided shorts were likely calling their lawyers crying “insider trading” all the way home.

Join me Monday thru Friday from 9:30 AM to 10:30 AM EST as I continue to review trading equities using DTS.  The room is open to all and is a great place to review how the DTS birds are easy to use and will make consistent trading profits.

The good news is that the current atmosphere remains prime for day trading.  And while the $264 billion trade remains elusive there are solid opportunities to trade profitably.  I expect there will be numerous opportunities from a growing list for both traders who approach the market from a bullish prospective as well as traders who approach the market from a bearish prospective.

Remember the key is being able to reduce and separate the “noise” from opportunity.  This takes knowing and executing a well-defined strategy and allows you to see opportunities amongst the “chaos” and by trusting the mechanics of your strategy, be able to take advantage of them.

The trading opportunities should remain abundant within equities, futures, ETFs, options, treasuries, and precious metals.  Opportunity continues to knock on our doors.  While it doesn’t come without risk, risk can be defined and more manageable.  Volatility and broad moves are exactly what a day trader desires and being able to respond without questioning is a luxury many are unaware of.

Using the Hawk Micro ScalperFalcon Swing Trader, and the Eagle Trend Trader within the various markets can produce strong results.  The combination of any of the “birds”, the Hawk, Falcon, or Eagle platforms with Trade Manager provides a solid, more stress free way to building profitable trades.

Diversified Trading System | Indicator WarehouseIndicator Warehouse

Indicator Warehouse has in my opinion the best platforms available covering a wide range of traders from novice to expert.

The Diversified Trading System from Indicator Warehouse offers cost effective products that allow a trader to enter into the “chaos” and trade more effectively.

Trade Manager from Indicator Warehouse automatically calculates the correct amount of contracts or shares based on your account size or market volatility.  Automated stop-loss management and position sizing eliminates most of the problems most individual traders have.  Day trading and position trading both require (actually demand) good risk management.  Trade Manager does the job across the board and is an essential trading tool that ensures that you take the maximum profit from all your trades.

Profit Finder – System Back Tester.   When implemented it allows the user to:

  • Immediately know the impact of parameter changes.
  • Automatically reads all of your DTS entries and exits
  • Calculates the profit/loss of each trade
  • Performs a wide number of essential intelligence boosting calculations instantly
  • Provides solid details about the effectiveness of your trading strategy/ methodology/ indicators

My point on money rotation and sector rotation is similar to that on parabolic moves that they happen with frequency within many time frames.  As traders these types of moves can be a bonus for day trading or position trading so again don’t get caught up in the “what’s the catch.”    Realizing a rotation is occurring within a stock you trade or a sector is a great source of stocks to plug into the Diversified Trading System.  Allowing DTS to cleanly and beautifully capture the moves though any or all three DTS trading platforms.  Our goal remains to assist traders to make greater profits during all types of markets.  Sector and money rotation is another tool.

The Diversified Trading System used together with Trade Manager should continue to produce numerous trading signals in the DJIA, YM (mini), S&P 500, ES (mini), RUT, TF (Russell 2000 mini), AAPL, AMZN, GOOG, NFLX, and LNKD, GS, and Tesla Motors (TSLA).    In the near future I will be adding options strategies to the trading list. 

Here is a list of the markets where I have found that DTS (all three birds) are producing numerous signals.  Continue to bear in mind that there are days when trading opportunities are not as plentiful.  These are days when not trading is likely more profitable than attempting to “force” a trade”:


  • DJIA future (e-mini available) – highly recommended for experienced traders
  • S&P-500 future (e-mini available) – highly recommended large intraday moves. The SPY options are a valuable alternative to the future.
  • Russell 2000 future (e-mini available) – highly recommended can lead in either direction.
  • NASDAQ 100 future (e-mini available) very highly recommended and dominated by AAPL, AMZN, NFLX, GOOG, and TSLA – will likely continue to have higher percentage moves as the next larger degree decline begins in the NASDAQ first.
  • GS (Goldman Sachs) – good two way volume – usually has $3+ intraday range – Options available
  • AAPL (Apple Computer) – highly recommended – Options trading as well
  • GOOG (Google) – highly recommended – larger accounts needed – options traded
  • LNKD (LinkedIn) – solid intraday range and has picked up recently Options traded
  • NFLX (Netflix) – solid intraday range – volatility has deflated on the rise back to $300 – Options traded and very liquid
  • TSLA (Tesla Motors) – highly recommended  – patience is required if you trade the options – trading the stock remains solid
  • TWTR (Twitter) – both stock and options strategies available.
  • 30-yr Treasury Bond future – highly recommended
  • 10-yr Treasury Note future – solid two way trade
  • TLT (Treasury Bond Long ETF) – very active – options as well
  • TBT (Treasury Bond Short ETF) – very active (moves inversely to TLT) – options as well
  • Gold (futures and ETF – GLD) very active – not suitable for all traders
  • Silver (futures and ETF – SLV) – very active – not suitable for all traders
  • GDX (Gold Miners ETF) – lower priced – suitable for all traders
  • ABX (Barrick Gold) – Large rally potential – capable of sizeable intraday moves.
  • NEM (Newmont Mining) superb volatility produces opportunity laden intraday moves.
  • EURO FX (futures, mini and micro contracts available) very active suitable for all account sizes – Highly recommended
  • Natural Gas (futures) – can be active and volatile
  • VIX Index (futures) – not suitable for all traders, more experienced traders should find a growing two-way trade.