Author Archives: Scalper1

Market Lab Report – Pocket Pivot and Buyable Gap-Up Weekend Review for the Week of 11/23-11/27/2015

Trading Journal Notes from Dr. K an Gil regarding this past week’s pocket pivot and buyable gap-up reports. Euronet Worldwide (EEFT) GM – this stock is still forming a base, but Wednesday’s stalling pocket pivot provides an early entry point at the black 10-day line following the prior bounce off of the blue 50-day moving average. The small pullback on Friday provides a lower-risk entry point closer to the 10-day line. DR.K – While this is a seasonally strong time of the year, keep in mind just because the S&P 500 has been up from here until the end of the year over the last 12 years, individual stocks should still be bought as close to major support as possible in context with the strength of the general market. In other words, should market strength push such stocks higher on strong volume, your entry may be at a higher price which is okay in context with the behavior of the general market. Weibo (WB) GM – Chinese social-networking name WB got hit on Friday after Chinese markets dropped -5.5% the night before, gapping down to its 10-day moving average on very light holiday volume. This brings the stock into a lower-risk entry position, as long as a continued decline in Chinese markets next week doesn’t drag the stock down with it. This means that one must use the 10-day line as a very tight selling guide. DR.K – The risk in buying this stock is small as it is very close to its 10-day moving average. Any break below 17.58 which is the low of Wednesday’s action should be sold.Â Maxilinear (MXL) GM – Tuesday’s stalling pocket pivot has led to a further upside drift into the highs of the three-week price range. I would prefer to buy into a pullback to the 10-day line at 16.56 as a lower-risk entry opportunity, should that occur. DR.K – Note moving averages adjust, so the 10-day will be slightly higher on Monday. if buying this stock, buy as close to the 10-day as possible.Â Dycom (DY) GM – An interesting outside reversal to the upside after the company initially sold off in response to its earnings report. The outside reversal was also a pocket pivot, and the stock’s downside drift into the 10-day moving average on light volume provides a lower-risk entry point following the pocket pivot. DR.K – The stock is in a good position to be bought given its constructive two-day pullback closer to its 10-day moving average.Â Palo Alto Networks (PANW) Stock is now about 4% beyond the 178.47 intraday low of Tuesday’s BGU. This remains within buyable range assuming it is still within your risk tolerance levels using the intraday low as your selling guide.

ETF Update: 5 New Funds To Be Thankful For

Summary Every week, Seeking Alpha aggregates ETF updates in an effort to alert readers and contributors to changes in the market. There were 5 ETF launches over the last 2 weeks, a slowdown from the 17 launches in the first half of November. Have a view on something that’s coming up or a new fund? Submit an article. Welcome back to the SA ETF Update. My goal is to keep Seeking Alpha readers up to date on the ETF universe and to gain some visibility, both for the ETF community, and for me as its editor (so users know who to approach with issues, article ideas, to become a contributor, etc.). Every weekend, or every other weekend (depending on the reader response and submission volumes), we will highlight fund launches and closures for the week, as well as any news items that could impact ETF investors. I hope all my American readers had a delicious Thanksgiving and a great holiday weekend. Mine is always a great event with +20 family members converging upon Chicago (I’m still celebrating the fantastic Bears/Packers upset from Thursday). However, every Thanksgiving since the beginning of my career has inevitable involved the following vague question: “So, what do you think of the market?” My solution last year was to sign questioners up for Seeking Alpha’s Wall Street Breakfast , and I must say the conversations about the economy were much more rewarding this time around. Now if only we could skip “so, who are you voting for in 2016?” Always my cue to get seconds of sweet potatoes. Fund launches for the week of November 16th, 2015 Fund launches for the week of November 23rd, 2015 Deutsche Bank (NYSE: DB ) launches a pair of multifactor smart-beta ETFs (11/24): The Deutsche X-trackers FTSE Developed ex US Enhanced Beta ETF (NYSE: DEEF ) and the Deutsche X-trackers Russell 1000 Enhanced Beta ETF (NYSE: DEUS ) track benchmarks derived from their indexes, but with a smart beta twist. According to the press release , “both FTSE Russell Comprehensive Factor indexes weight each stock within their respective underlying benchmark based on five academically-proven characteristics that influence the risk and performance of stocks: Value, Quality, Momentum, Volatility and Size.” FlexShares rolls out a fund of funds ETF (11/24): Northern Trust’s (NASDAQ: NTRS ) FlexShares Real Assets Allocation Index Fund (NASDAQ: ASET ) seeks to achieve optimal exposure to the three underlying ETFs while limiting volatility by investing in three FlexShares ETFs. This are the FlexShares Morningstar Global Upstream Natural Resources Index ETF (NYSEARCA: GUNR ), the FlexShares STOXX Global Broad Infrastructure Index ETF (NYSEARCA: NFRA ) and the FlexShares Global Quality Real Estate Index ETF (NYSEARCA: GQRE ). According to its homepage, the fund will “provide investors with a core real assets allocation that helps address their inflation-hedging, diversification, and income needs.” There were no fund closures for the weeks of November 16th and 23rd, 2015 Have any other questions on ETFs or ETNs? Please comment below and I will try to clear things up. As an author and editor I have found that constructive feedback is the best way to grow. What you would like to see discussed in the future? How can I improve this series to meet reader needs? Please share your thoughts on this first edition of the ETF Update series in the comments section below. Have a view on something that’s coming up or a new fund? Submit an article.

The V20 Portfolio – Relative Calm

Summary The V20 Portfolio declined by 0.51%, less than S&P 500’s gain of 0.04%. The share repurchase program will continue to support Conn’s. I wouldn’t worry too much about MagicJack. Despite lower activation, the company continued to produce good cash flow. The V20 portfolio is an actively managed portfolio that seeks to achieve annualized return of 20% over the long term. If you are a long-term investor, then this portfolio may be for you. You can read more about how the portfolio works and the associated risks here . Always do your own research before making an investment. Read last week’s update here ! The S&P 500 was essentially flat this week, rising only 0.04%, beating the V20 Portfolio’s performance of -0.51%. While the V20 Portfolio didn’t beat the index, considering its historical volatility, the “decline” was inconsequential. Portfolio Update Our biggest position, Conn’s (NASDAQ: CONN ), continued to rally, rising 5% from $25.72 to $27.02. This echoes my sentiment in my previous update, that the company’s share repurchasing activity will continue to buoy the share price. As the company inches closer to its Q3 earnings in December, it would appear that investors are quite optimistic (or at least more optimistic than before). Month to date, shares have risen by 42% from its low in October. Last week I also mentioned that we should pay attention to the consumer sentiment index, which could impact investor expectations, especially for the retail sector. Recently we’ve seen several retail stocks fall (e.g. Walmart, Best Buy). The final consumer sentiment index for November was 91.3, which was higher than October’s reading of 90.0. This hasn’t stopped investors from dumping retail stocks however. Fortunately for us, Conn’s buyback program will offset this near-term downward pressure. MagicJack (NASDAQ: CALL ), previously our largest position, continues to account for a substantial portion of the entire portfolio (~20%). It was quite surprising when I heard of news of a short attack on the stock. MagicJack can possibly take the title for the worst short candidate in the world with its high cash balance and high cash flow generation. These are the reasons why I still want the V20 Portfolio to get some exposure to the stock in the first place. I haven’t bothered to write a piece rebuking the short pitch, since it doesn’t reveal anything that we don’t all know already. The facts are right, but everyone is entitled to their own interpretation. Ever since day one, I believed that MagicJack’s value is derived from a core group of customers that will renew year after year. Now that shares have appreciated from a few months ago, more value has to come from growth. But this doesn’t change the fact that the company still has a good business (albeit declining) that is generating cash flow year after year. Furthermore, growth opportunities come at almost no cost to MagicJack. There aren’t expensive projects that would require a truckload of cash or any upfront commitments that would put a drag on the company’s current operation if things don’t go their way. In other words, the company can’t really lose with these expansions Looking Ahead Conn’s will report Q3 earnings next month. From a sales perspective, we know that Q3 numbers will experience a boost from new stores. The company releases monthly sales data, so the revenue increase should be expected. The determining factor will be the company’s bad debt expense, which forecasts future delinquency rates. The company has made significant improvements in its credit policy, so I believe that the number could improve. After all, the company is now lending to more credit-worthy customers. Dex Media (NASDAQ: DXM ) is still undergoing restructuring negotiations. The forbearance period was supposed to expire on Monday, but it was extended since the negotiation is still ongoing. It would seem that the forbearance period is really just a legal nuisance, and could be dragged on while negotiations take place. Nevertheless, I do believe that Dex Media is very close to its end-game, and shareholders will soon know the results of the restructuring. The amended forbearance period expires on December 14th, so keep your eyes peeled for any new developments. Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.