The buy signal from the Twitter stream for Baidu (BIDU) that was generated on 11/12/13 has been closed. This is the second disappointing signal for BIDU. The previous one was closed with a small gain just before the stock rocketed higher. This signal had a gain of 5.48% and I would have expected it to continue to climb above its 50 day moving average if there hadn’t been so much volatility in the market over the past several days. Update: 1/28/14 – With the bounce this morning you might want to give BIDU some room to run. See how it (and the market — SPX) reacts to the 50 day moving average. If it stalls and SPX looks to be painting a bear pennant then I’d close the trade at a larger gain and wait for another opportunity. If sentiment gets back above the trend line and the stock above the 50dma then falls below again I’d close the trade. I wouldn’t take a loss on the trade so for
Over the past week as the market declined sharply our core market health indicators followed suit. The damage was enough to raise some cash and/or add a small hedge in the core portfolios. The action on Friday should be disconcerting for the bulls since the S&P 500 Index (SPX) sliced straight through the 50 day moving average, paused at a Twitter support level (1800) for only a few hours before slicing through it. Although some damage was done, both in terms of price and internals, the outlook isn’t as bleak as it may seem…yet. When I look at all of the indicators that I follow I get the image of a battle joined, not won. The bears have reasserted themselves, the skittish bulls have run from the field, but there is a shield wall of committed bulls still standing firm. This puts us in a position where the best we can do is wait to see the outcome of the battle. The most important thing to watch over the coming
Over the past week all of our core market health indicators fell sharply. Most notably is that perceptions of risk are rising sharply. Two of the components of our Market Risk Indicator are currently warning. The sharp drop in this indicator shows that investors are dancing close to the door. Our measures of market quality and strength fell quickly as well. Our measures of the economy have fallen back below zero which has us raising cash in the long / cash portfolios. They are now 80% long and 20% cash. We’re adding a 10% hedge to the hedged portfolio. It is currently 90% long with stocks that we believe will outperform the market in an uptrend and 10% short the S&P 500 index (or an ETF like SH). If the current trajectory of our measures of market quality and strength continues we’ll probably be raising more cash next week. But as always we’ll wait for a signal. I’ll post mid week if anything significant happens to any of the indicators.
The Twitter Top 10 portfolio is falling fairly hard during this down trend. It is now down 3.9% for the month. The largest drags on the portfolio this month are 3D Systems (DDD) down 16.97%, Groupon (GRPN) down 13.66%, and Himax Technologies (HIMX) down 6.36%. The lone standout in the portfolio is Solar City (SCTY) up 20.90%. Below is a performance chart and details of the current holdings. Start Date Symbol Shares Start Price Start Total End Price End Total % Gain / Loss 1/3/2014 $HIMX 925 14.63 13532.75 13.70 12672.50 -6.36% $MA 160 83.08 13292.96 80.45 12872.00 -3.17% $DDD 140 96.42 13498.80 80.06 11208.40 -16.97% $BIDU 77 168.71 12990.67 163.14 12561.78 -3.30% $YHOO 335 40.12 13440.20 38.53 12907.55 -3.96% $SCTY 228 59.27 13513.56 71.66 16338.48 20.90% $CELG 79 169.81 13414.99 163.11 12885.69 -3.95% $LVS 172 78.35 13476.20 74.90 12882.80 -4.40% $GRPN 1120 12.08 13529.60 10.43 11681.60 -13.66% $KNDI 1018 13.29 13529.22 12.73 12959.14 -4.21% Cash 437.08 437.08 Totals 134656.03 129407.02 -3.90%
The StockTwits Top 10 Portfolio is lagging this week as the market falls. It is now down 2.01% from the first of the year. The under performance is mostly a result of Walter Energy (WLT) down 28.04%, Groupon (GRPN) down 13.66%, and Baidu (BIDU) down 7.25%. The portfolio still has a few standouts in Solar City (SCTY) up 20.06% and Yelp (YELP) up 14.74%. Below is a performance chart and details of the current holdings. Start Date Symbol Shares Start Price Start Total End Price End Total % Gain / Loss 1/3/2014 $SCTY 168 59.27 9957.36 71.16 11954.88 20.06% $BAC 620 16.41 10174.20 16.58 10279.60 1.04% $YHOO 249 40.12 9989.88 38.42 9566.58 -4.24% $BIDU 57 175.28 9990.96 162.58 9267.06 -7.25% $GRPN 828 12.08 10002.24 10.43 8636.04 -13.66% $MA 120 83.03 9963.72 80.83 9699.60 -2.65% $WLT 626 15.98 10003.48 11.5 7199.00 -28.04% $CELG 58 169.81 9848.98 163.15 9462.70 -3.92% $YELP 148 67.66 10013.68 77.63 11489.24 14.74% $GMCR 132 75.75 9999.00 78.65 10381.80 3.83% Cash 56.5 56.50 Totals 100000.00 97993.00 -2.01%
Just a quick note today. One thing I’m seeing is renewed weakness in our measures of the economy. They finally went positive just a few weeks ago, but have turned back down again. If they are still below zero by Friday we’ll be raising cash (20%) or adding a small (10%) hedge to the portfolios. I don’t like whipsaws, but I’ll follow the indicators as they’ve served me well in the past. At the moment the hedged portfolio is up a bit from two weeks ago so most likely this will be a break even signal when slippage/spreads and commissions are factored in. I’ll post any new portfolio allocations before the last hour of trading on Friday.
Below are charts with the bullish intensity scores for the most bullish stocks on StockTwits for the week and month ending 1/21/14.
Below are charts with the bullish intensity scores for the most bullish stocks on Twitter for the week and month ending 1/21/14.
Below are charts with the intensity scores of the most bearish stocks on Twitter for the week and month ending 1/21/14.
Below are charts with the intensity scores for the most active stocks on Twitter for the week and month ended 1/21/14.