Current position summary : WAB, VTAE, AVNR, WFM

Shorts:
I'm thinking that high volume reversal was significant. Today, it got a 2% move which is a range expansion for this company.   I see that as a great short set up because of the bearish divergence near a 52 week high--meaning this stock is not likely to run hard against me.  I can keep a tight stop and look for a 10% plus sell off.

LONGS:
VTAE:
I bought the range expansion 3 days ago and then added at 19.  This one has the look of something ready to really have some fun.

AVNR:
In at  14.40.  Very pleased that it shook of a CLR FDA letter today. Less pleased that it re-reversed.  Although many biotech's had reversal moves today.  I'll just keep moving the stop up and we'll see what it can do.

WFM:
Bought the breakout today.  Nice consolidate. And now the initial stages of a momentum burst move?  Volume was decent for a 1/2 trading day.

Closed EYES

EYES.  I thought this had potential to stage a scent reversal after a range contracting day.  It decided that more selling was in order.  A reminder of why stop losses are so important because EYES would drop quickly. Kept the loss at 1% of equity despite slippage.  In the future, I need to wait for more contraction on the IPO trades.

Entry (avg) 18.04
Exit 16.50
-1R.

Closed ESI

ESI was another stock I had taken as part of the reversal scan, I came up with.  There was some initial promise to this trade as It ran all the way up to 9.50 shortly after I purchased it but it faded, made another attempt and faded again.   I cut down my position size as I became skeptical. Today  it made it all the way to my stop loss. 

Entry: 9.16

Exit 1 9.33

Exit 2: 8.30 

.7R

Closed EXAS

I closed out EXAS after 3 unsuccessful attempts to closed over 25.20 in a row.  This move reversed today. So I figured it was time to move on.

Entry: 24.23

Exit 1: 25.17

Exit 2:  24.80  

+.37R

Not a great trade by any means. But it proved what i wanted to prove which is buying range expansion following a narrow ranged pull back can profitable with low risk. I didn't get in this trade as early as I would have liked I should have been .70 earlier.  Thus, I took a reduced position size into this trade.  I did get a nice follow through but when it failed to break through 3 times. Especially after giving back nearly all its gains today, I figured it was better to play defense.  So I sold and I'll move on.

opened WAB short

Oil got absolutely killed today.  The oil boom has been driving railroad stocks as oil is shipped out and facing sand is shipped in. Fracking stocks were down really big, and a number of rail roads stocks were hit as well-- GBX, TRN, RAIL, WAB which makes various rail road equipment, freight cars, brakes, etc... had hit a 52 high and then reversed on high volume that's a sign of weakness.  I saw today's range expansion day as the possible start of an extended down turn. 

opened 88.33 short. 

Stop 90.41

Opened WFM

WFM has set up nicely after making breakaway.  It now looks ready to go higher.  I bought at 49.08

Stop at 48.35

Opened VTAE

After hitting a 20% + swing in VTAE earlier last month, I go back into VTAE for Continuation Anticipation type trade.  The volatility has been squeezed right out of this stock and there were a number of very tight ranged days sitting like ducks in a row.  This is a low low risk set ups as stops can be placed tight.  This type of setup can produce very power bursts. Indeed, I've already caught one in this stock.

Entry: 17.48

Stop: 16.50

I did not trade this with the size that I might otherwise have due to the number of positions I have open right now.  If I close some positions, I very well add on this one. 

Closed TSLA short

My best shorts have not come from breakdowns but rather from picking weak tops.  Still, I tried the b/d trade with TLSA. TSLA fought a bounce at 240 yesterday when there was an article that it was partnering with BMW.   Any way TLSA is now in a channel.  I still think it favors the bears but I did not size this where I can let it go 20 points against me to ride it out. As much I would want to give this trade more room to work, I'm much better off taking a small loss < 1% here. 

Entry  242.21

Exit: 248.88

-.8R

Opened ESI, TUBE, EXAS, AVNR

ESI: Looked ready to resume the uptrend.  It bounced off of 8. which provides support
Entry: $9.16

Tube  Staged a nice reversal after hitting support

AVNR: nice range expansion.  Good action going into the close
Entry: $14.40

EXAS:

After some contraction, EXAS got a pop.  It gapped the open and then faded. As it got a late burst of strength I bought.

Entry $24.23

Opened Short TSLA

TSLA is one of those stocks that everyone watches and marvel  at how high its gone.  I've tracked it for a long time.  I was less than impressed by the all time high it made on lower volume. And noted my charts at the time.  

TSLA has since made a higher low and now again another higher low. As the selling is increasing with volume to the downside I entered my short.  If this works, It will work remarkably well.  If it doesn't, I feel the risk here is manageable, but the trade favors the bears here.

Closed LRAD

This one didn't work out as I had hoped.  Despite the post earnings pop in after-hours yesterday, it never materialized into buying today.  It then sold off and I bagged it out for a loss.   I should have sold more off in the 3.30s after I saw some size on the asks but I figured that buyers would over come the sellers.  After the push through 2.20 failed, I probably should have just closed this trade for minimal profits instead of waiting for the stop to hit.

Entry 1: 3.15
Entry 2: 3.13
Exit 1: 3.39
Exit 2: 2.95
-.45R.  Kept the loss small

Closed HCLP, +8%

I didn't like the action in HCLP today as it reversed from a high of 50 and went lower. That is the type of action that has lead to more down days.  I think this is possible that it retakes to at least 46 to test the breakout. 

Entry: 44.34

Exit 1: 48.07 (3.73) 

Exit 2: 48.10 (+3.76 ) 

+2.26R

This turned out to be a nice little trade to get back on track. 

Longer view

Opened SAMN

I like these narrow range pull backs after a big move. I drew a bunch of trend lines and thought SANM looked like a decent risk/ Reward trade here.  I got a trend line alert.

SAMN looks to be breaking away from the 3 week down trend it has been in.  This type of action suggests that the sellers are exhausted.  Once some buyers come in this could work pretty well.

Enter: 24.98

Stop: 24.11

Opened LRAD

This is a pretty interesting company.  I looked at it in depth after its q3 quarters and determined that it had potential.  I made a decent post earnings swing trade on it.

I returned to this well again today. I like that it had a great breakout move and then it rejected 2 attempts at a sell off.  I knew it had earnings but I figured they would at least be decent given q3 cc comments.  So I bought in advance at 3.15.  Earnings came in about what I expected but the great thing about these micro caps is not many people know whether they are good or bad when they first come in.  I was able to pick up more at  3.14.  Eventually it gets bid up.  I had planned on selling a 1/3 of my position off at 3.39 and I sold a  few hundred shares at that point but decided to lift as bids came in . LRAD  is likely will go higher as this earnings move validates the Fishhook set up over 3.21.

Fuel closed: There is no Joy in mudville

I went for a home run in Fuel. I swung for the fences and struck out.  Here's my post mortem review of the trade.

  I suppose everyone has done it at least once. You get a little too confident and you decide to go big, really big.  I come across FUEL when it looks like this: 

I see an extended base with a breakout on very high volume.  I liked seeing the down day with a decent tail as I figured that would mitigate the selling pressure.  If it could retake the close on the breakout day. I figured this was a go.  The numbers looked good enough to make it happen and go for the gap at 25.   So I planned to enter on the trade if it retook 19 with a buy stop. 

I believed that the 60% plus revenue growth along with positive guidance during the CC that social media would be the next big revenue driver could make this an EP type move.  I became even more confident in my analysis of the trade when I see Jesse Stine post the following chart:

So with that in mind, I planned on going into this trade in a big way--80% of my equity big. My YTD profits were up over 60% which I reasoned gave me the room to take this shot.  If my initial profit target is acheived I'd be up over 100%. 

I felt (like Jesse Stine) that there was a well defined risk here.  I reasoned that the top of the consolidation was where it was likely to stop if the ret-racement 17.50  .  Since I did not view this as a swing trade, I was prepared to let it come in and make that test.  I also figured that my stop should be at the point where I'm clearly proven wrong.  So I set that at 17.05  figuring that will at least get me out above 17.00 if its hit.  

 In sum, as I planned this trade I went in prepared to lose nearly 9% of my portfolio to make 25% or more if this trade worked.  (Yea, I know my risk rule is 2%. )  I did this trade because (1) I have big gains this year, and the number of trades I have made this year is wearing on me.   I've built my gains this year by hitting singles and doubles,  but I haven't let trades develop that would have go on to be massive winners. I bought AGIO at 65 (now in the 95s) and BABA at 88 last month  (hit a high of 120). I could go on but, the frequency I was trading wore on me. For that reason, putting on a position trade appealed to me. 

Anyway, on Monday it looks like this trade is going to work in a big way.  I buy as the downside consolidation breaks to the upside in a big way (last green bar on chart)... until the very next hour bar gave it all back.

And gave more back the next day and then the next. I get stopped out:

Now that the gap is filled, I would not be surprised for FUEL to bounce off the 50Ma and then continue to make the run I thought it would.  I will not be upset if FUEL bounces in a big way tomorrow. Shit happens.The funny thing is I'm not nearly as upset with myself as I expected I would be. I had my plan and I traded it as flawed as it may have been.  

The question is now where do I go from here?  Do I take a short break to refocus or do I get right back on the saddle and get back to what was working.  I has tempted to close out my HCLP trade since it is profitable to get back in the win column.  But I ultimately concluded there was no reason to sell.  It continues to consolidate and could breakout in a big way if it gets over 46.  Do I want to miss that so I can make a 1.5R profit? Not really.   At this point, I'm going to see what the market gives me.  If there is a compelling trade I'll take it, if there isn't I won't.  What I will do is tighten up my risk parameters.  I'm going to put myself on a diet of .5 R. 

Closed HKTV, SNSS

I closed out HKTV in premarket at 11.06.  I could see that it closed down 6% on the Heng Seng and The rationale for the trade was now gone.  I wind up with a .5R loss. 

Entry: 11.74

Exit. 11.06 

I also traded SNSS today.  I thought I had a valid fishhook using the close of the big move rather than the top of the wick.  I bought the break ant got filled at the high 2.36.  From this I learn wait until the initial burst has settled in. In any event, the initial move failed I set a .20 stop and got stopped out, with slippage .22 loss.  - .5R.

I bought as this looked to be breaking out bas the prior day resistance, had this worked I believe it could have gone to 3.00 or higher, but it was not to be today.

Opened FUEL

I have gains that exceed 60% this year.  That has set me up to do something that I normally would not do.  Take a big trade with size.

I had targeted FUEL as it announced great revenue growth and surged on high volume. Although it put up a wick, I've seen that before and stocks go on to spectacular gains after the day 1 move.  Day 2 pulled back nice.  So I had a fishhook type of analysis for it.  I planned on a buy stop at 19.05 I wind up getting a fill at 19.24 (never again will I use that type of order).  That hurt because I bought big. It then preceded to fade.

Despite the pull back today there is nice support at the top of the bottom pattern.  I would have liked Fuel to kick off that formation.  That didn't happen yet, but it also didn't fall past it.  So this remains a work in progress.  This will wind up either being my biggest loss or my biggest gain of the year.

VGGL Fishhooked it for profits.

So although I shorted VGGL after its first run and made good profits,  I was impressed with its resiliency. Despite what I might think of this stock, It's chart was showing the potential for a perfect Fishhook. I resolved to buy if it popped 3.50.  It did and I got filled @ 3.60.

I sold off my first lot at 3.80 and then 3.71.  I made .5R on the trade.   I was a too skittish to hold for the second move over 4 as one of my other trades was going against me.  Too bad because this wound up running all the way to $4.50

Opened HKTV

At the end of the day on Friday.

FIshhook at 11.70

HKTV also trades on the Heng Seng, looking at this chart gives a better idea of the volume coming in.

Opened HCLP

I opened HCLP at 43.34. 

Last month I caught that V shaped recovery.  I don't think this one will have the same trading action. but it has held up well the past few days as big volume has come in late after HCLP was down in the mornings.  What I like about this set up is the bullish divergence on the sell offs to 40 on a double bottom type move.  If it breaks out of this consolidation range a 10-20% move is likely. 

Closed VGGL Short

My VGGL trade played out as planned.  After a short morning push it faded throughout the remainder of the day.   I placed a buy to cover at 3.05 which was filled.

Entry: 3.43

Exit: 3.05 +11%

.5R

I did not put a lot of size on this trade as I shorted the fade on the initial day's move.  That can be somewhat of a risky strategy but I felt that the close was weak enough after a huge move to warrant a short position.

Opened (and then almost immediately closed) BBRY, CYBR, URRE

I made a number of poor decisions and jumped in to stocks that were moving without a well formed plan.  I made money on all of them, but not much. A big $15 on BBRY. lol I need to figure out what is going on or I next time I won't be that fortunate.

My $15 gain in BBRY was probably the best decision I made as I came to my senses and  realized that I was just chasing a stock that was already extended and hoping that I would be lucky. When I realized I was relying on hope.  I realized there was no purpose of being in the trade so I cut out.  Now had I held I probably could have made a few100 bucks before it  reversed (which it did) and I could have wound up with a big loss.

CYBR:
Entry 40.77
Exit 41.15
+.25R
Cybr had actually set up well after making an earnings related move.  My trade starts to work and I get nervous at the first wiggle.  Had I had actually committed to a stop this would have been a very profitable trade.  I'm trading scared, which is not a good place to be.

URRE
On Friday morning, I look at my uranium watch list I see that the price of uranium has jumped and every single Uranium stock is up sans one URRE.  Urre has the smallest float and makes big moves.  Although I don't love this type of chart set up, I hit the bid betting that it rises with everything else.

Yep. Within a few minutes its up to 2.18 at 2.20. But then the bid slides to .15 and then .13 ok I'm out for a 6.5% gain.   That's not a good way to trade.  There was no reason to sell at all.  It would hit a 2.35 HOD.

Entry: 2.00
Exit.: 2.13
.4R

Closed NQ as Breaks Range to the down side.

It looked like NQ was going to breakout in a big way in the morning getting as high at 7.88. Unfortunately for me  NQ started to fade --so I knocked it out.

Trade Entry : 8.04

Exit: 8.53

+ 1.15R.

Closing remarks:

I got a fantastic entry on this stock.  Its not in an established uptrend. So selling when the move I caught started to falter is probably the right decision.  

VGGL Bartered Revenue Bonanza with insufficient cash.

So the star of the trading day had to be VGGL closing up 117% after announcing its quarterly report with the following headline:

"Viggle Reports 49% Year-Over-Year Revenue Growth and 112% Increase in Registered Users." 

  I thought it might make an EOD push and took a long trade.  After  it became apparent that would not happened I banged it out for a .06 gain. Wo hoo!   VGGL then proceeded to fade into the close so I took a short position at the close.

Obviously a sizable move on the daily. When you see something like this you have to ask what caused this and take a cynical view. 

So I thought I would start digging through the SEC filings.  Heck, if VGGL is legit I'd go all in.  Based on my research I've concluded that this company is all smoke and mirrors.   

So here's the dirt:

• Revenue increase was driven by "Bartered Revenue"

• The Company recognized barter revenue and barter expense in the amount of $3,010 and $1,385 for the three months ended September 30, 2014 and September 30, 2013, respectively. (all amounts in thousands) 

(source 11/12/14 10-Q pg. 10). In other words their bartered revenue increased 117%.

What is bartered revenue? The FASB explained the practices: 

"It has become increasingly popular for Internet companies to enter into transactions in which they exchange rights to place advertisements on each others' web sites. In some of these transactions, no cash is exchanged between the parties. In other transactions, similar amounts of cash are exchanged between the two parties. Some entities record an equal amount of revenue (for the web space they own and "sell") and expense (for the web space they "purchase" from the other entity). There is no overall effect on net income or cash flows, although the timing of the revenue and expense may differ. "

So to be clear: VGGL never received a penny of the 3 Million they claimed in barter revenue.  Notably, numerous companies have been implicated by the SEC for hatching scams to inflate revenue from web subsidiaries.  The former head of Homestore .com went to prison for his role in such a scheme. 

I, for one, certainly see a big difference between actually getting paid for your ads verses getting to place your ads on someone else's site an claiming revenues when no cash flow is effected.I also find it somewhat suspicious that the bartered revenue increased so much not only from year over year but from quarter over quarter.  I also find it suspicious in how they recognize revenue.

"The Company recognizes revenue when: (1) persuasive evidence exists of an arrangement with the customer reflecting the terms and conditions under which products or services will be provided; "

 The "persuasive evidence" standard has been badly manipulated by some high profile companies such as ENRON.Maybe I'm old school in the sense that I go by the adage "if it ain't in the till, it ain't revenue. "

In any event the non-bartered revenue growth comes out to a 17% gain, which may sound good until you realize that the losses increased by 32%.

• Revenues from related parties

Mr. Sillerman is the majority owner of VGGL.  He is also the majority owner of SFX  a company affiliated with Mr. Sillerman. 

" SFX paid us $5,000,000 to license our audio recognition software and related loyalty platform for a term of ten years."  

In fairness, VGGL didn't break the SFX payment down but $5 mill over 40 quarters would amount to 125K a quarter.

• Losses increased

For all the claims of increased revenue, where's the beef.  The assets are down from last quarter, the cash is down from last quarter, but the losses are up "Viggle reported an adjusted EBITDA loss of $7.8 million as compared to an adjusted EBITDA loss of $5.9 million a year earlier."  

In other words, the losses increased by 32%! 

• VGGL is being Diluted 

In the latest 10Q  there were 16,107,807 shares outstanding, as of  May 9, 2014 there were 13,784,711. In other words, this stock has already been rapidly diluted  a 17% increase  between the last 10Qs.

• More dilution will follow"

I got to hand it to VGGL they actually disclose t it does not have enough cash to continue its current business plan. " In order to meet our capital requirements for the next 12 months, we anticipate that we will need approximately $3,500,000 in new capital (in excess of the cash currently held by us and the $10,000,000 discussed above). (pg. 31)

For that reason:

"Management intends to raise additional funds through equity and/or debt offerings until sustainable revenues are developed."

And of course more skeletons in the 10q closet:

• Auditor Gives a Going Concern Notice

""Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a going concern. (pg. 35.)

• SEC investigation

"The SEC opened a formal order of investigation relating to a matter regarding certain dealings in our securities by an unaffiliated third party. In addition, we have also received an informal request from the SEC for the voluntary production of documents and information concerning certain aspects of our business and technology. Although we have provided documents in response to the SEC's request, there is no assurance that the SEC will not take any action against us."

Conclusion

This quarterly report was terrible.  Growing losses, diminishing assets, a stated need for dilution.  Nonetheless, VGGL's share price rose on phantom revenue. I don't see this pop lasting.

Cleaned the Slate- closed BOOT, NLNK, PIP, RWLK,

In my opinion, the market is setting up for some downside.  I don't want to have as much exposure in positions that were not profitable or only marginally profitable.  So not a fun day but I can reset and wait for my set ups to form.

BOOT   Turned out to be a decent trade but nothing special

Entry: 18.09
Exit: 1 18.90
Exit 2: 18.64.
+.5R

Aftermath: And I prove again that I have no patience.  Although I would have had a tough time seeing all my profits disappear while it makes a secondary charged

NLNK.
After a few attempts at going higher, the bottom dropped out and I got stopped out.
Entry: $34.19
Exit $31.23
1.9R -- This one hurt as I nearly went to my loss limit.

So what went wrong?  I saw this as a pocket pivot trade from my entry.  I see now that I bought the breakout after a big red bar, which means this had not consolidated enough.  Consequently, the entire time I owned this it was still in the whipsaw phase.

Lesson learned, turn the page.

RWLK.  

Entry: 30.73
Exit 1. 28.90
Exit 2. 29.00
-1.4R


 PIP:
It finally broke its support at 1.70 and I had no choice but to sell.
Entry:
Exit: 1.68.
2.2R

This trade was never able to recover from the SIGA bankruptcy news that put the gap in . Up until that point it had traded pretty well.  I needed the court system to work faster, lol.  Didn't happen.
This was a special situation stock that I knew would have taken months had it worked, so I allowed myself a little more risk than my 2% rule.

Current Position Summary

As I've been turning over my positions pretty frequently its been a while since I've done an inventory and an assessment of my current holdings.   The market is showing some signs of tiring on the momentum front

PIP.  I have a small position in PIP.  PIP is a fundamental play. It got hit when SIGA a company that PIP beat in a lawsuit that will be worth 200+ million to PIP declared bankruptcy.  This is not a bad thing as it just stays enforcement of the judgment pending SIGA's appeal, which I do not believe is likely to succeed since it will be determined on an "any credible evidence" standard.

PIP as the largest creditor has tremendous influence in the Bankruptcy court.  The parties are currently mediating the dispute and I believe that it is likely that the parties do reach a resolution as the Delaware state judge will issue a decision any day now.  PIP would also have the ability to credit bid if it successfully defends the appeal and could wind up winning SIGA at auction.

There are risks that I could still get hit on tax loss selling.  And I am certainly cognizant of that for my own purposes.

NQ: I waited until the selling was exhausted and then bought at 7.04.  I've caught a 10% move before NW pulled back a bit today. I'll give it 1 down day but if forward progress doesn't resume tomorrow I'm protecting my profits.

RWLK: It just keeps coiling tighter.  This is going to go hard-- I just hope it goes in my direction.

NLNK:
This had looked like it was going to be the perfect pocket pivot.  The day after I bought it was even trading up premarket on volume. It then got hit with some vicious selling but held the gap and my stop.  Rallied the next then sold off.    For better or worse, I still have hoes for this position but another down day would knock me out of this position.

VIMC: new just added. BOOT: partial closed today.