What to make of the market?

This site’s philosophy is very simple. I feel (I hope I’m humbled by this ..or rather i hope I’m humbly starting this): This site’s philosophy is sublimely simple : Price is the only true north star. I want to simply mimic the price. Price is rising and i am buying. Price is falling and i am selling.

what i mean by that is this ?

Let me put it in a different way. Say you are conservative. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

QQQ or the cubes which track the NASDAQ – 100 has a beta of 1.10 ..roughly it mirror the NASDAQ – 100. AMZN , Amazon has a beta of 1.71.Netflix NFLX 1.53.

there are ETFs dedicated to High Beta or it’s implications – momentum stocks!

Now QLD , which daily doubles the NASDAQ – 100 has a beta of 2.25 !!

Say Jan 4th 2019 when the market started its rally you bought 100 shares of QLD for 68 dollars.  On Feb  6th 2019 it hit a resistance at 200 day SMA and then next day you sell at market open (it confirmed because there was a gap down). You sold at 79.

So you went in with 6800 dollars and now you have 7900 dollars.

Now if you look at market and it is dropping on high volume end of the day prices you know the market is in downswing. Say it drops down to 70 USD, and you get in based on simple end of day price action. Now you have 112.8 shares!!

See you accumulated assets slowly! In QLD or for that matter NFLX or AMZN wealth is accumulated by accumulating shares by being in cash when the market is falling!! and getting in when the simple price volume actions says the trend is reversing from going down to going up.

Buy at the top sell at the bottom.

Profit in assets are only made at the price you buy not at the price you sell. So you go long (buy) at the beginning or there about of an uptrend or go short (sell) at beginning or thereabouts of a downtrend. Since price is the only true North Star. One ‘exits’ at the top or bottom to make true profit and to accumulate assets. In both cases – long or short – you are buying low and selling high. THIS DOES NOT MEAN YOU ARE ACCUMULATING ASSETS AS PRICE IS FALLING. In fact it is exactly opposite to it. Accumulating assets as prices are falling is buying high and selling low ( you sell low because you can’t bear the pain of loss). You always accumulate assets when price is rising.  You exit assets when it’s price is falling.

Happy trading folks!

 

 

the beast is rousing itself up

it is a big beast – there are big big players with billions of dollars trading the market every day

For Jan 30, 2019

Share Volume Dollar Volume
Total Volume: 2,567,771,292 $129,267,339,122
Block Volume: 507,812,429

 

Number of Issues: 3,397
Number of MPs: 428
Total Trades: 13,602,488
Block Trades: 13,278

Now for small time folk like me, the deluge of money and trading will overwhelm me. that is why i will not day trade. 2.5 billion shares are traded and i am not capable of knowing what is going to happen because my position can be wiped out in a min.

also total dollar volume is 129 billion

that is why end of the day price is so very important . why ? Because after all the fighting and back and forth snd trying to decide on the tug of war and over and over again money and stocks trading hands. at last they come to a market agreed price.

this is the price market has agreed, P/E ratios or sales figures or Forward looking EPS etc all the knowledge is finally found in that price. All the billions of dollars of super computers and auto trading and algorithms and quants have come up with this price.

 

and i should respect it.

2700 was a strong century figure resistance for S&P 500 and then for NASDAQ it is 7000-7200.

On higher volume both crossed that number yesterday at the end of the month

screenshot2019-02-01at11.49.46amscreenshot2019-02-01at11.49.30am

i am long on QLD and AMZN call.

 

Amazon physical stores sales no one is talking about. AMZN much better than advertisng sales

Summary : with no growth at all we can expect a revenue of 75.97 – 79.85 Billion dollars for Q4 of 2018.

amazon AMZN is reporting its Q4 2018 quarterly report at market close on Thursday January 31st 2019.  look at the below table found here . this is from form 10-Q found on page 20. this below is table 1 in this post.

screen shot 2019-01-30 at 12.18.53 pm

For Physical stores line number 2 in 2017 for both 3 months ending and 9 months ending Septemnber sales were 1,276 Million dollars. Why? On page 4 of the annual report

“Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter, which ends December 31. We recognized 33%, 32%, and 34% of our annual revenue during the fourth quarter of 2015, 2016, and 2017. Fourth quarter 2017 results include revenue attributable to Whole Foods Market, which we acquired on August 28, 2017.”

Now look at Net sales for the year ending 2017 in the following table found here on page 69 of form 10K

this below is table 2 in this post

screen shot 2019-01-30 at 12.34.53 pm

In the above table, it would not escape your attention that they had 0 dollars sales in physical stores in 2015 and 2016 and year ending 2017 it is 5,798 Million dollars.

Now in the first table by the 9 months ending September 2018 the sales is 12,824 Million  US Dollars

Just 9 months sales increased 121 % growth! this is better than the advertising segment growth (the other ) which is just 6,720 million from table 1

2015 to 2016 – the other advertisement segment grew 72.5 % and then from 2017-2018 it grew by 57.7 % but for first 9 month of 2018 it grew by 44.4 % compared to entire 2017.

Physical stores sales for Holiday season 2018 is going to add billions of dollars since amazon released here

Amazon today announced a record-breaking holiday season thanks to its customers all around the world, with more items ordered worldwide than ever before. Amazon customers shopped at record levels from a wide selection of products across every department, discovering top holiday gifts and trending products offered at deep discounts and low prices. Some of the best-selling products this season included, all-new Echo Dot, L.O.L. Surprise! Glam Glitter Series Doll, fashion items from Carhartt, and Bose QuietComfort Wireless Headphones, among others.

So from table 1 we have net sales for 9 months ending 2018 is 160,504 million US dollars. Now last quarter revenue was 56,576. let’s just for fun add them both. we get revenue based on no growth whatsoever 217,080 million us dollars. Now if around 35 % of annual revenue is got from 4th quarter. then without any growth Q4 revenue would be 35 % of 217, 080 which is equal to 75,978 million us dollars!

Now lets assume very reasonably for revenue growth comparing Q4 quarter 2017 to Q4 quarter 2018 of a growth of 32 % (Q4 2017 to Q4 2016 was 38.3 %) then we get revenue  of 79.86 Billion in Q4 of 2018

 

 

 

 

What a upswing yesterday!

Wednesday, September 12th 2018, around 8:30 am Hyderabad, India; and around 11:00 pm Wednesday, September 12th 2018 New York Time

futures before opening did not look nice…NDX opened lower about 40 points! but immediately started going up and up 100+ points at close. That is a good upswing!

NDX solid support and bounce above 9 Week EMA. FFTY – top 50 growth stocks in the market good bounce above 9 Day EMA!.

Accumulation distribution line for NYSE – not as good as yesterday, but 1430 stocks up (majority of stocks) in good volume of 1.56 billion (better volume than yesterday)

most spectacular advance was NDX – low of 7401 and closed around 7507!

only red flag was the breath – IBD calls it ‘curiously soft’ ! Decliners led advancers by 15-to-13 in NASDAQ. Well there is one other red flag – % of S&P 500 stocks above their 50 day SMA declined by not that much to 64.55

One another thing – Apple, Amazon, Microsoft, and Google is 26 % of NASDAQ! Now these stocks are institutional darlings and heavy weight!. How are the institutions treating them ? Screen Shot 2018-09-12 at 8.45.50 AM

decision : I’m staying in QLD

and i am long on NQ 1 Contract

Happy trading

5th straight week of bearishness for the market

Both the 50 day SMA and 7200 level has been a good resistance for Nasdaq (pic 2 below)

Last week The S&P 500 came to within 4 points of its 200-day moving average, currently around 2,609.

It has now at the end of the week an Accumulation and distribution scale of D. the worst in the scale of A-E is E.

Look at volume – above the last 15 days but it has not budged Thursday and serious plunge on Tuesday. On Friday despite the wonderful slaughter of analysts expectations by AMZN stock.. AMZN actually declined by the end of the day !!

Amazon and Intel staged ugly reversals.

Amazon gapped up 7.9% but then retreated to a 3.6% gain. Intel rose 5.1% and then erased everything to close with a 0.6% loss.

Next The rising 10-year rate is causing the yield curve to steepen.  In the past week and a half, the spread between the 10-year and 2-year treasury rates increased by 32% from 0.41% to 0.54%. Investors have been worried about the flattening of the treasury yield curve and the potential for a yield curve inversion (2-year treasury rate greater than the 10-year rate).  An inversion of the yield curve has been a reliable signal that the economy is approaching a recession.  Investors have also been worried about rising interest rates. (Source of this para and below pic is Delta market sentiment )

Sidelined for now – the picture is getting uglier