Closed NQ

I closed my NQ short today.  I was traveling so I didn't put on a full position after it popped to $5. The retracement from the bullish burst is now nearly complete and I've taken enough meat off this bone. Since the selling has slowed, I'm moving on.

Entry: 4.47 (avg.)
Exit: 4.08

OPENED NQ, UCO

NQ got a buyback announcement and the stock rallied hard.  The stock is coming from an oversold position but it is still a short IMO as the rally took it to the top of this recent trend line, which will be resistance. In addition, announcing 80 mill in a buyback will do little as it does not require NQ to buy the shares.  I don't feel this news warrants a 35% move as the news prior was pretty ominous. 

The past history of this company demonstrates that with past buy back programs, the company only bought a small portion of the shares and issued many more shares in multiples the amounts bought back. The company has not retired any stock repurchased.

I'm taking my initial tranche here.  

UCO
I bought UCO today, as a M/R trade.  I feel this has a well-defined risk limit. My prior energy play reversion trades, ERX have worked And this could get going with a small bounce in oil.
Entry 11.74
Stop: 10.80

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.  

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.

Opened NQ

NQ is a stock I've been stalking for a while.  It was hammered after it real eased its 20-F as traders sold the news.  I've noticed that the trading range was tightening over the past few days.  After 2 dojis in a row I bought as it popped back over 7.00.

This presents a very low risk entry as I can risk .20 to make dollars or more.

My entry on the 15 mins
Entry:  7.04
stop: 6.84

NQ is DQ'd Closed the Aug 12c NQ

So this has been a wild ride.  I bought the Aug 12calls on the gap up on the news that the NQ's independent audit came back clean and showed no fraud. NQ sold off from that point when the expected 20F has yet to materailze.  I was still somewhat still an optimist up to yesterday when NQ rallied on a rumor that it would be released shortly.

Today, I woke up to the following headline:

"NQ stated its independent auditor has "communicated [...] that it would need to perform additional procedures and expand the scope of its 2013 audit work." The request, NQ says, came sometime after the June 4, 2014, release of its summary findings of the independent investigation. In that summary, NQ insisted no evidence of such fraud was found. 

Curiously, NQ Mobile says it's only "considering" the auditor's request, and will "provide a further update when available." What's more, the audit update was buried in a single paragraph at the bottom of NQ's lengthy press release, which first justified a shake-up in NQ's board of directors and audit committee. Most notably, NQ's current chair of the audit committee informed the board she would be stepping down "due to personal reasons not related to her role at the company effective on July 6, 2014."

Yea. (sarcasm) 

Upon reading this news, I knew my hypothesis for the trade was wrong--That the 20F would be reported shortly and would be relatively clean driving the NQ up to 30 giving my calls a huge profit, which would put a porsche in my driveway.  (we all dream).

After getting the slap in the face I knew I needed to act. Problem being, the option markets do not open until 9:32.  So I had to wait until the open to bail and bail I did.   I put a limit order in for .15 which got filled immediately--high of the day (yea!).

A tip I've picked up over the years and as my time at the CBOE is a big move down will inflate the price of calls before the volatility is crushed.  Using that to my advantage let me save a few bucks and get the top price of the day on my calls.  

The market loved the news as much as I did ultimately closing down 32.25%.  

Summary:   This trade was never about a price proving or disproving my theory but was to be news driven.  I made a bet and it was wrong.   I limited my risk by buying options as I knew this would be a wild ride. When buying options on a trade like this I take size for the trade with the assumption I will lose it all. I nearly did.  Bot  @ $1.85 Sold .15   This was less than a 2% portfolio loss, which is acceptable under my rules.

In retrospect this is a trade that I shouldn't have taken.  There were so many red flags -- I doubt I would have taken this trade If I had not been on the huge win streak that I have had over the first two quarters. Ultimately,   I gambled instead of speculated and the market called my bluff.  Well played market, Well played indeed.

New Positions: RBCN, NQ

I added two new positions today. First RBCN at 7.52:

RBCN makes sapphire glass for semiconductors and potentially for face plates cell phones.  A competitor GTAT has a long term deal with apple, which has essentially taken all the supply.  Should the industry grow, new players would likely go to RBCN as a supplier.   It missed earnings which caused the dip.   I  like the risk to reward here has 7.50  could provide support a break of 7 and I'm out.   1R risk on the trade.

Dynamic chart:

NQ:  This one is interesting. For months NQ has been dogged by reports by Muddy Waters that the company was engaging in fraud. Today, the company issued a press release advising that the independent auditor found no evidence that the company was engaging in fraud and substantiated revenue growth.  The stock exploded upwards:

I believe that this is a type of episodic pivot event discussed by Stockbee. The volume was huge and the news could be a game changer leading to a multi-week change.  Still it is Chinese  and where there is smoke there is often fire. To that end, I felt the best way to play and manage risk was to buy the calls.  I bought August 12's for 1.85.  For options, I assume that my position will go to 0.00 and take the position size accordingly.