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Cut Losers Today – CRON / VFF. Exit ZM. Added to ETSY YETI shorts

I refuse to hold CRON into their earnings. Small upside (shorts covering) versus big downside to $6. I think it drops, and trickles down, offering a new swing trade entry.

Covered all ZM shorts, shorted 10 points ago around 78. This is one heavily shorted stock, and its due for a rally.

ETSY looks weak all over. And YETI is set up for a bull trap. Added to short position on both. ETSY is for a trend down, YETI looks like its beginning a nice long term trend down. Fancy water bottles belong in Ross, and these extreme coolers- just don’t see the growth here. There’s growth, but nothing to get this excited over. YETI to teens.

CARVANA (CVNA) Putting Bears to the Test

I’ve been going to battle with Carvana for quite a while now. And every time it gets knocked back, somehow it manages to rebound. I’ve been short through the 60s, tried again a few times in the 70s, and my currently play is the retracement from the mid 80s, through post-earnings to the low 60s. Right now, its not looking too good.

I’ve been in and out through stops, whenever the stock refuses to break through my target floors, and each set up I seem to get a good entry, only to be fooled and trapped by the bulls. I get the sense, that the textbook rallies from 10-15% above the 200MA are shaking out a lot of shorts which is really testing my patience on this play. I refuse to add to shorts above 78, and will only add on a break down to the 60s, with all those June-July tops (triple).

With a VIX this low, getting long here does not present a good risk:reward setup, hence the long-term play on the short. Let’s see how this gumball car machine company turns out when growth gets slammed and their stuck with excessive overhead costs. It just seems like a step back from shopping for cars on the internet. But what do I know, I’m just trading the greed.

TL/DR CyberArk (CYBR) Cashing in on Security

I am short CYBR. Here are my TLDR thoughts:

  • Financial statements looks healthy. Way better than FEYE which gets more attention and air-time. I don’t even think FireEye has made a profit yet. I should be short FEYE
  • I did the tutorial videos on YouTube for CYBR security software. The training videos completely bored me, but it seems they solved the problem of user access security and admin abuse.
  • CYBR short has nothing to do with fundamentals, because its just a good company filling a business need.
  • Why are you still short? Probably because I’m still in the green, been short near the 52-high, and even though earnings blew investors away, the response was a conservative 8% pop… reflecting more of a reaction by traders both long/short. I feel the price needs to retrace back to the 80s before forming a long-term base.
  • Stop loss on short is $130 for anyone wondering.
  • Adding to short under 100.

… even Noah’s Ark had its volatile fun. But eventually the rain stopped.

Pinterest (PINS) Problem with Making Money

Pinterest is a forum of endless creativity, and while it does get the traffic and heavy usage, monetizing is rather tricky. Many investors are pulled in with the illusion that PINS does well. What can you expect from a company that specializes in images. And the image Pinterest sold in claims of high profit potential, was a myth told with empty promises covering a real landscape of challenges, expenses, and the problem of scalability.

Adding the ability to buy products directly from the app seems like a good idea, but I believe in the future it will turn out to be a bad idea. The typical Pinterest user likes the app because of the personal creativity of the contributors, like a craft fair. Adding the ability for direct sales from the app has invited generic products promoted by commercialization, quick market penetration. The creative contributors that give Pinterest’s appeal will be diluted by dollar-sign-eyed, greedy, drop-shipping, made-in-Alibaba vendors. Try it, I dare you! Look up something you’re interested, you’re bound to be flagged for a product that looks innovative and something you think you need in your creatively ambitious life, and it will come with a price tag saying you have two days left to get it at 60% off, and that there are only 10 items left in stock. A classical play on exploiting human emotion. Well, fight that urge and look up that product on Amazon, and you’ll see the EXACT product photo, with a different vendor or branding, and at 20% cheaper price.

So, Pinterest is first an advertising company (and it does this well), and secondly, a waste of online e-commerce which uses the large net casting technique to make a sale to suckers. Instagram, SnapChat, FaceBook, and Pinterest are all following this same model, using user data to bring the mall to you. There’s a serious flaw in this revenue stream design, and investors need to pin this in their minds, and tame their expectations and view these social media companies as what they are- a shiny advertising platform.

Disclaimer: I am short PINS, FB, and soon to be SNAP . Target for PINS is $16.

Madness:

Cramer Thinks Netflix’s price bump means Amazon, Apple’s stocks are bargains

Saw that dumb headline and I couldn’t believe it. The FANG pumper is at it again.

“Every month I pay Apple to back up my photos and insure my phones. Don’t you? Every month I pay [for] Apple Music,” Cramer said. These are services that will decline in cost rapidly if Cramer took an economics class in high school. Its a consumer attitude like Cramer’s that makes me shake my head. Why should consumers give in? Why should someone give toxic advice to accept whatever the vendor charges. You don’t say, company X did this therefore company Y is this. Netflix created value, and is taking a RISK in raising prices. Price wars don’t happen in the opposite direction. Soon, users of NFLX will flock to Hulu and networks can drop prices on their streaming service or add package deals.

As for the stock, all I see here is Cramer being late to yet another rally, a relief rally at that. With earnings a few days from here, I’d stay far away from NFLX since rallies like these tend to have the price increase already baked in, and if they disappoint on the conference call, then the downside is much more powerful.

As for the other FANGs… AAPL is fat, and will look attractive when it breaks 10-15% from its low of 142. FB trying to be a hardware company makes me puke. And Google, is basically a utility stock, quite boring and probably not worth trading long or short.

The real winners will be content makers, since now those with pure talent (a rare and valuable intangible asset) will be in such high demand services like NFLX will just dump money in their lap. We simply have peaked in the streaming service market, and though it will continue to prosper, its growth and popularity will normalize.

VIX Major Break Down Setting Up Sharp Drop Soon

Market showing false rally last week with a trickle up. A dip below 18 into 16 would verify that the VIX is “broken”, and is normalizing back to its 20-25 range. Good entry to short here, with VIX heading into complacency levels. Market is just waiting for any news item to trigger the event, so careful with longs here.

Fade the Gap: 1/2/2019

The play: short morning gaps as long as VIX continues to decline. Need to understand that a weakening VIX in a bear market create intraday bull traps. A proper squeeze in bear markets start with opening gaps and rise up throughout the day.

The setup: find imbalanced bid/ask stocks that overpriced the stock within the first 30 mins. Short stocks that rise a little then return to the morning open. Stop set to 1% above the pivot point of decline.

Stocks to short:

SaaS profit takers $MDB and weakness $SVMK.

Weakness: $ARLO $FIZZ $CRON

Momentum cool off: $SHOP

Tipping Point: $EA $FIZZ $FATE

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WAVE RIDERS:

Stay short $TVIX

Buy dips on gold/oil. $DRIP $NUGT

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SPEC PLAYS (1/2 Position with wide stops)

$UMRX (watch $LABU)

$YINN $MOMO