So Cal Prop Trader

I don't know but this is an interesting article from some guy that was at M&N Trading in Newport.

I would like to be back in OC or SD but judging from this guy's article, kind of sounds like a sink or swim place without much teaching. Just sounds like someone volunteering their services (like an intern) yet learning little.

Probably similar to what Kurt experienced at his prior prop shop.

http://www.wallstreetoasis.com/forums/prop-shop-info-mn-trading-some-thoughts
 
Quote from sfbayarea:

I don't know but this is an interesting article from some guy that was at M&N Trading in Newport.

I would like to be back in OC or SD but judging from this guy's article, kind of sounds like a sink or swim place without much teaching. Just sounds like someone volunteering their services (like an intern) yet learning little.

Probably similar to what Kurt experienced at his prior prop shop.

http://www.wallstreetoasis.com/forums/prop-shop-info-mn-trading-some-thoughts
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Interesting article. Thanks for posting. Kurt, please disregard this recommendation. LOL.
 
As you all know, I am not a fan of the S&P above 1400. As I see it, we had a cap form on the squeeze above 1400, just as I predicted earlier. See attached chart. Now, I am really hoping for a break down below 1350, which looks like a critical level. Indicators rolling over.

Take it for what it is.

I will get aggressive down at S&P 1200 if it comes.

I missed the last buy when I called the last sell-off. Want to make sure I get this one. Though, I am conscious that the next sell-off could be something significant. Interesting times ahead. Ease in, keep cash around.

Dating the girl again.
Job hunt.... lol.
Probably should just go get my MBA.
 

Attachments

Attached is my prediction for FB IPO. Might happen same day, might take a few days. Rush to buy off the start just like all the noobs who flood the servers on Diablo 3. Price becomes too expensive too fast. Sell off brings FB below IPO price, panic sell ensues, the real buy point arrives.
 

Attachments

This is an e-mail I sent to my boss about the FB IPO:

"Here are the two recent predictions I made. Chart.png shows a technical prediction of the market dip we had / are having, along with potential areas the market can find support.

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fb.jpg shows my prediction for Facebook's price activty off the open of its IPO. In my online post, I said it could take a few days for a real sell-off to occur. That is exactly what happened. FB's actual IPO price was 38. It opened higher at 42, sold off to 38. Underwriters tried to hold 38 but couldn't. FB drops below 38. Retail panics. The hedge fund flippers panic. New buyers become skeptical. Hopefully, FB takes a big dive, eventually becoming emotionally oversold. That price will be the short-term buying opportunity.

Though, long term, I see Facebook more as a buyout target than a growth stock. Facebook makes its money by offering targeted advertisements. Companies can focus on location, relationship status, interests, etc and get a good bang for their buck. In order to grow with the current model, FB would need to get more and more users (which is why they want in China) or they would need to create more ad space around the site. Creating more ad site would work against the company and send users elsewhere. We all saw what happened to MySpace.

Now that Facebook is publically traded, the CEO must act in the best interest of the shareholders. This is where they screwed Zuckerberg, who seems to have no interest in selling. A hostile bid by say Apple or Microsoft could send Zuckerberg packing once shareholders take him to court. He is going to need to come up with a strategy to make Facebook worth its obscene valuation. Another option for him is to continue making acquisitions of rising social media companies, which would improve the Facebook product and create more online advertising space. Also, Facebook could start integrating more ad space into the mobile environment, or perhaps charging companies to own pages. For instance, they could charge Westfield Valencia to even have a page, since we are a company rather than an individual user. If I were him, I would charge companies for FB accounts.

Even then, Google is trading at 18 times earnings and Facebook is trading at 99 times earnings. Seems insane. The bubble has to burst. The stock has to go lower under current conditions.

I think Facebook's most valuable commodity is its user data. Its user data is probably the only thing that makes Facebook attractive. Selling this data to outside marketers would definitely create a jump in revenue. Corporations would LOVE to get their hands on the "biggest consumer database in history." If there is a chance at growth, that is probably where it lies. And, unfortunately for Zuckerberg, corporations will most likely get ahold of it, as it is probably in the best interest of the shareholders.

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And so, my grand conspiracy theory to contribute to the pot:
Internal FB peer pressure and manipulation tactics by big bank business analysts finally convinced Zuckerberg to go public. FB pre-IPO stockholders wanted a payout, and the banks want a route to that user data. The underwriters pump the stock and sell their shares to retail clients who buy into the hype. Soon after the IPO, the FB bubble bursts as smart money wants no part in these valuations. Retail panic sells, insiders panic sell, hedge fund / street flippers panic sell, FB stock tumbles and becomes either oversold or fairly priced. Big money gobbles up these shares at a significantly discounted price from the IPO, creating a price floor.
During this sequence, a number of things can happen.
1. Zuckerberg dishes out more shares on the company's way down to lock in capital, potentially losing his majority stake.
2. FB receives takeout bids. As FB finds a floor thanks to big money, watch for headlines that discuss FB being an attractive buyout.
3. Poor business decisions made out of desperation.

Unless Zuckerberg has something in store for his company, it seems to me the Facebook IPO is a massive multi-way scam designed for big business to oust Zuckerberg and break into FB's consumer information. Banks like JP Morgan already list Zuckerberg as a liability for the company. They want him out, and a clasically trained CEO in. Ivy Leaguers will only aim to create profit rather than enhance the user experience. The new set of shareholders at Facebook's bottom will welcome and vote for any changes that increase share value.

Basically, money on the IPO, the collapse, and the eventual bounce. Everything is already planned.

---

But that is just a silly theory. LinkedIn (LNKD), an already public social media company, is trading above its IPO price and at 626 times earnings hahaha. (Most likely because FB will use its IPO money to buy it)
Facebook could just be another classic tech bubble stock, though I tend to think it is not given its massive reach.

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Ok, there's my Facebook rant!"
 
Got a new demo account today, I'm going to begin backtesting intraday moves along with tracking discretionary swing trading, which I believe to be my strength.

But for now, more of my Facebook commentary:



May 29:
Me: Facebook continues to get smacked haha. Probably not a terrible idea to start buying some in the 25 - 26.55 area, but boy oh boy, a panic sell to 20 would be ideal...

Internet User: "you think 25 is low enough to buy? I thought that might be representative of what it's actually worth"

Me: it's low enough to start a position, maybe 15% - 20% of what you want to throw at it. At 25 you get a 34% discount from the IPO price. I think it is at around 25 where fund managers who didnt buy the hype begin to see risk / reward. FB WILL set up for a technical bounce, ideally, you want to wait for a panic sell off to happen for the best price. as far as what it's worth... if you valued FB at a similar multiple to Google, it would be worth as low at 5.50 haha. Value is perception. if you buy up here, you are buying to join the camp of new shareholders who HOPE the price can reach the IPO price again. Best way to play is probably through option spreads rather than stock itself. I wouldn't be surprised if FB bounces above 20 and touches 32 again. With all the shorts piling in, FB is going to get a lot of volatility... If you want to buy FB as an investment rather than a trade, make sure you save some cash for the teens. Though, it could take a long time for FB to break 20. I imagine the banks will step in and defend the stock somewhere in the 20s, they have enough trouble brewing with regulators.


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June 18

Here is that bounce in Facebook I was talking about. The bottom was my first buy point... It is important to watch the strength of this bounce. Expect the late shorts to enter this trade around the mid 30s, though you can never rule out a short squeeze. It would be standard for the price to test 38, though the buying fear and short value there make it unlikely. I would draw the absolute line ...in the sand at 35.50 - 36, marking a 50% retracement from 45, but the trader in me says it doesn't break far or long past 33 before retesting lows down near 25.50. With a IPO showing like that buyers want to see confirmed support. Price is drifting up with the market, both are flimsy moves. The next dip is very important for potential buyers. Likewise, this pop is very important for shorts. While considering all probabilities, like Griffin in Men In Black 3, a breach of 38 would indicate a beautifully engineered scam by Wall Street.
 
Looks like the buying is done in FB, got several downgrades. Gapped down while market gapped up. At lows while market still in positive territory. Looks like it topped out at 33.50, the exact point I said it wouldn't break. Now it will go test its 52 week low and a new low will signify a confirmed downtrend, making things pretty bearish. Downgrades give it a 25 dollar target, just about where it recently bottomed out. The short I called at 33.50 was sick along with the buy at 25.50 I called. Shorts will now hold their positions, waiting for a new low. This is where things get tricky as there are 3 general possibilities with unknown probabilties in the NEAR TERM. Stock can hold lows and attract buyers forming a reversal pattern. Stock can hold lows but meet sellers on each bounce forming a triangle pattern. Or the stock either blows through lows or consolidates and then breaks. In this situation you just hold your short position and wait and see. The outcome depends on what occurs as you near the low. Whales will battle and the minions will follow. The price behavior down there will determine the next move. "Let the charts do the work for you." They will indicate whether to buy, sell, or hold. Persnoally, my bias says the short trade works and a new low forms. Probably a panic sell to the low 20s, and that is where shorts cover the first portion of their trades bringing a bounce and buying chase. The strength of the downtrend then lies back at 25.50, if it can't break above things will be very bleak for this stock, high teens for sure.

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But damn, really? A part of me thinks the banks can't let this happen... A near 50% sell off from IPO in such a public stock. I'd like to think there is more of a sideways-downward thing that will happen than a legit downtrend.
 
haha, here comes the panic sell in Facebook. Those who sold the bounce are in for some serious profits, while those who bought the dip, gamed earnings, or have been holding since the IPO are done for. It will be interesting to see what happens in this tomorrow. A further decline beyond 10% will imply holders are bailing since the shorts can't pound the bids due to new circuit breaker restrictions. The circuit breakers give great info. New lows will stop out all the traders and scare the shit out of any investors. Normally it is a good idea to buy a capitulatory sell-off, and it may very well be if it occurs. However, given the absolute pain this stock has brought its holders, I doubt many will be keen to jump in. Stock is in a DOWNtrend until it proves otherwise and that is how it will be gamed. Those who have been on the right track, selling runs in the stock, are going to be patient in calling a bottom. In these high emotion situations, technicals rule over fundamentals, and the technicals will bring a sharp decline, a brief pop, and then a new low. The safer buy is to wait for that new low. Wait for capitulation conditions. Only other entry indicator would be a mountain of bids down near 20 bucks. The order books will run the show, everyone will be glued to them looking for whales to make plays. Some shorts will get covered tomorrow, some at the open, others toward the close depending on the stock's movement. People will not be keen to enter new short positions on a gap down like this, though a wall of offers may be enough to prevent a pop. A few different variations are possible, but FB has been a very easy play from the bear side.
 
Quote from ksmetana:

haha, here comes the panic sell in Facebook. Those who sold the bounce are in for some serious profits, while those who bought the dip, gamed earnings, or have been holding since the IPO are done for. It will be interesting to see what happens in this tomorrow. A further decline beyond 10% will imply holders are bailing since the shorts can't pound the bids due to new circuit breaker restrictions. The circuit breakers give great info. New lows will stop out all the traders and scare the shit out of any investors. Normally it is a good idea to buy a capitulatory sell-off, and it may very well be if it occurs. However, given the absolute pain this stock has brought its holders, I doubt many will be keen to jump in. Stock is in a DOWNtrend until it proves otherwise and that is how it will be gamed. Those who have been on the right track, selling runs in the stock, are going to be patient in calling a bottom. In these high emotion situations, technicals rule over fundamentals, and the technicals will bring a sharp decline, a brief pop, and then a new low. The safer buy is to wait for that new low. Wait for capitulation conditions. Only other entry indicator would be a mountain of bids down near 20 bucks. The order books will run the show, everyone will be glued to them looking for whales to make plays. Some shorts will get covered tomorrow, some at the open, others toward the close depending on the stock's movement. People will not be keen to enter new short positions on a gap down like this, though a wall of offers may be enough to prevent a pop. A few different variations are possible, but FB has been a very easy play from the bear side.
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Kurt, what's going on with the job front? Any updates?
 
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