Champico33 (over at the Abandoned Artic Outpost) did some buying today (if I’m understanding his post correctly). He writes:
"Added the following Trading Blocks today:
SNOW - Added at 138.75
BILL - Added at 101.81
DDOG - Added at 67.34
NET - Added at 43.9
CRWD - Added at 98.47
S - Added at 13.90
GLBE - Added at 24.76
MDB - Added at 182.04
Drained the cash bucket down to about 1/3 and just took my beating on the rest. All the Best."
It’s not my intention to say whether those were shrewd buys or not, nor can anyone, for each investor having his/her own means, needs, goals, purposes, interests, oppontunities, and intended timeframes. But the eight can be charted. Suggestion. Chart them using daily bars with a 2-month lookback and then with weekly bars (which defaults to a one-year lookback).
The daily does not look that great but on the weekly it looks to me like bill, ddog, nnet, crwd, s all have had major inflection points , if I understood it correctly about the smiley face from Quill.
But I like the looks of the charts from Swav and Enphase better, at least on the daily, the weekly not so much
I can’t keep track of all your versions of Simon Sez. I just know I don’t agree with your calls on those stocks.
Using HA Smoothie with daily bars, a 2-month lookback, and no indicators, here’s how I’d call 'em.
SNOW. In 1/12 and still in.
BILL. In 1/17 and still in.
DDOG. In 1/17 and still in.
NET. In 1/13 and still in.
CRWD. In 1/18 and still in.
S. Maybe in on 1/13, for sure on 1/17. Out on 1/24 only to have to get back in 1/25.
GLBE. In 1/4 and still in.
MDB. In 1/13 and still in.
As for calls based on HAS with weekly bars, here’s how I’d call 'em.
SNOW. In on 7/11/22. Out on 10/10/22 and still out.
BILL. In on 7/18/22. Out on 9/26/22 and still out.
DDOG. Got whipsawed the weeks of 7/18/22 & 7/25. Got back in 8/15/22. Out 9/12/22 and still out.
NET. In 7/25/22. Out 9/19 and still out.
CRWD. In 6/27. Out 9/12 and still out.
S. In 7/11. Looking shaky by 9/19. Probably out by 9/26.
GLBE. In 7/4. Out 9/12. Back in 12/19 and still in, though looking shaky.
Holy Moly! Walking those stocks through charts by hand is mind-numbing. If I had to do it again, I’d write a program and let it do the work. In fact, that should probably be my next project, to get this stuff scripted and automated.
You like ENPH? On a weekly chart, it’s breaking below support. On a daily, it’s crashing. The stock’s a short technically, but seems strong fundamentally. To try to resolve that divergence, I’d have to grind through its financials and dig into the whole energy/utilities/solar sector to figure out why ENPH is rolling over .
My guess is that ENPH is correcting back toward ‘fair value’ [which SWS estimates to be 33.9x] E.g., ENPH’s current PE is 96.5x when the industry’s avg is 18.3x? You gotta be kidding. A debt to equity ratio of 211.2% in a rising interest-rate environment? That’s another red flag, never mind the whole “green energy” thing is mostly a scam. (IMHO, 'natch)
re: GLBE. Is there a reason for the 2-month chart, you selected +3 GREEN bars, sometimes +2 GREEN bars after the last RED.
re: setup for HA Smoothie
You wrote the following which is confusing.
Here’s how to set up the chart template. Go to ‘Settings’. Select ‘Display’. Pick any bar format you want and then turn it off. Next, go to ‘Studies’ and select ‘HA Smoothed’. Lastly, save the chart as a ‘Template’. (Free accounts are allowed five templates.)
I removed the “Select 'Display” words and inserted " stay in Symbol tab". “Pick Colored OHLC Bars bar format.”
Will the following work. The Display tab does not have formats.
Here’s how to set up the chart template. Go to ‘Settings’. Stay in Symbol. Pick colored OHLC bar format and then turn it off. Next, go to ‘Studies’ and select ‘HA Smoothed’. Lastly, save the chart as a ‘Template’. (Free accounts are allowed five templates.)
Yesterday I had two rookies over to teach them how to read the charts and setting up all the files and a few basic EXCEL sheets.
Copper is hot and told them to buy FCX, SCCO and GDX
Now how do I send them a Bar chart to start doing some homework with a dozen recommended stocks to own forever. My brother sent me an email complaining nothing is working. I don’t want to drive 10 miles.
etc. etc.
next project is earnings reports day after. Keeps climbing up and up. They appear to be good plays for my Petty Ca$h strategies. Ca Ching Ca Ching.
re: CHUY on 11/3/22. Bamm and takes off.
Hi Arindam,
Looking at the Smooth HA daily it just had a smiley face below the red bar. I am not sure how to look at where the support would be. Right now they are sitting at a P/S of 15.21 and the lowest their P/S has come down to is 10.65 which would give it a price of $179.23 which is completely possible.
Yes the P/E is high but they are growing Revenue at 80.56 percent. The IRA is going to take effect this next year and more people will be using their product. They have cash of 1.4 billion and debt of 1.3 billion. Their fcf margin is 26.7 percent which is really good. I appreciate your view and will look into it more.
You like ENPH and think it has promise. I think it has problems. Who’s right? Probably both of us. ROTFL. So turning a profit is a matter of getting the timing right, and that depends on what the future holds.
The analysts/forecasters I follow – Jim Rickards, Doug Casey, Paul Roberts, Ron Paul-- all say we’re in a recession and headed for a depression. If that’s the case, which industries will do poorly? Which will do well, and how should retail investors be positioning themselves and their portfolios? Defensively, right? and not messing with speculative stocks that soon will be much cheaper.
“Do you guys worry about AI being used to make chart reading arcane?”
Andy,
Great question. But the short answer is, ‘NO’.
AI used to fall under the rubric of ‘neural nets’, which are fun to explore and can be surprisingly accurate and useful. But a savvy trader will always beat a machine over the long haul, because his counter-part really is just another human who’s written some code whose effectiveness is only as good as his understanding of how markets actually work.
Trying to use AI isn’t new. E.g., read the book, The Prediction Machine about Doyne Farmer and the Santa Fe Institute.
What AI can offer is proof that a discipled approach is a far better trading plan than most would-be investors bring to the table and the reason --along with under-capitalization-- why they fail.
“But what would you do today, not yesterday? I thought that was the question. Would you still jump in today?”
Andy,
Reviewing past decisions is a necessary part of preventing future mistakes. By now, no one who has been following the back and forth between Quill and me should have any doubt that the person who bought those eight stocks yesterday did so --I’d argue- without the least bit of technical justification. To say it as Quill would, the train had already left the station.
OTOH, the person sold all eight today and scored huge profits. So what’s going on?
What’s at play here are two different approaches to investing and trading: mean-reversion vs momentum. I don’t trade ‘mo’, because it makes no sense to me. Others can and do make the method work for them. That person did, and kudos to him.
Good point Arindam, very good point. Your right if we do go into a recession this company could go much lower, but I thought the reason for doing chart reading was to tell you when to get into and out of a stock? So if it is correct wouldn’t the chart also tell me when to sell so I do not get the big drop?
The old bon mot is "Fundamentals tell you What? Technicals tell you When? Risk-management tells you How much?
What’s ENPH’s chart look like right now? It’s rolling over, right? along with most of the stocks in that industry, for which TAN is a good enough proxy.
Mid December, ENPH was trading around 320. Now it’s down to 220. Ouch! If one uses ‘fair value’ to predict a ‘fair price’, what would it be? Obviously something even lower. Back in 2017-18, ENPH was a true penny stock. trading under a buck. Will it return there? I doubt it. But a fair price for it is the breakup value of the company, not hoped for future sales.
Yeah, that’s a very hard-nosed, Ben Graham-style stance. But value investing methods is how I made my money in this game and in bonds, not stocks, buying across the yield-curve and up an down the credit-spectrum. (Long story. Maybe another time.)
Thank you Arindam. So the only time you invest in a company is when it get’s down to it’s breakup value? That would be a sure way to get a home run if you are right. So I am assuming you lean towards value investing and then use the technical’s to tell you when to get in?
"So the only time you invest in a company is when it get’s down to its breakup value? That would be a sure way to get a home run if you are right. So I am assuming you lean towards value investing and then use the technical’s to tell you when to get in?
Andy,
I’m not trying to hit home runs. I’m looking for singles and doubles, to use the customary baseball metaphor. Buying at a discount to intrinsic value gives me “wiggle room” that buying securities priced to perfection doesn’t.
So looking at the Spy right now would you say that it is bullish or bearish. Just want to see how you see it? I think it looks bullish at this point in time.
" So looking at SPY right now --on a chart with daily bars-- would you say that it is bullish or bearish?"
Andy,
You ask good questions. I’m glad you’ve decided to hang out here for a while. My facitious answer to your question of whether SPY --as a proxy for the broad market-- is bullish or bearish would be --wait for it-- “YES”. ROTFL
Now comes the serious answer. It’s just an unsustainable --but very tradable-- late Stage Three rally. In fact, Michael Burry calls it “a mirage”. But let’s do our own analytical work.
Since the mid-March, '09 bottom, what has been driving stock prices higher? The short, simplistic --but nonetheless true-- answer is the flood of the Fed’s nearly free money. They’ve created the mother of all financial asset bubbles. For sure, as Keynes quipped, “The market can remain irrational longer than you can remain solvent.” But the US’s debt to GDP ratio of 120% --higher if you factor in all unfunded liabilities-- is unsustainable. Period.
The $US is (still, and will be for a long time yet) the world’s reserve currency. But them who don’t like being bombed and invaded --i.e., most of the non-Anglophone world and 80% of the world’s populations-- are rolling out “payment currencies” that are eroding the role of the $US in international settlements and having the effect of exporting ‘inflation’ --maybe even eventually ‘deflation’-- back onto us. In short, the salad days for US stock investing are over.
Check out this explanation of ‘Stage Analysis’ and try to tell me we’re not in a “topping market”. Trading With Stage Analysis Also while you’re there, check out this article on Dow Theory (that, regrettably, doesn’t explicitly introduce the terms ‘ripple’, ‘wave’, ‘tide’).
If those terms are used, then I’d say that the current rally for SPY is just a ripple or wave, but that the tide has turned (from ‘bullish’ to "bearish’).
You guys are giving me some great information and it’s been a lot of fun. But, I agree, I think we will have another leg down but it’s hard to say when so I am hoping your charts might give me a clue. In the meantime I can learn and hopefully make a little money. We will see.
