FSLR Update and P/L

As I said last week, I want to start cleaning up outstanding positions, I'm not opposed to adding new ones if they look like a good opportunity, but for the most part I want to be able to have dry powder, to not be distracted by "Speculative" positions and to start looking more to the prize, which means looking at the bigger picture and what I'd call the score positions which I prefer to use straight equity shorts rather than leverage, maybe a leveraged ETF here or there.

In my view, FSLR is done for this leg of the move and even though I think there's an excellent chance that FSLR makes greater gains in the very near future,  I'd rather take the small loss on it than have to look at the clutter and be able to decide if I want to move back in to FSLR (long/call) when the timing is right, but right now I think it's at best, opportunity cost or a distraction and art worse a loss that need not be taken.

At the $3.40 fill, the loss here was -5.5% which is more than manageable.

The charts for FSLR are really simple, I only need two and they also are almost a perfect proxy for market expectations in at least 3 different trends.

The 10 min chart shows accumulation. I know you probably are well aware of this, but I just wanted to point it out. If you look at StockTwits/Twitter, YahooFinance message groups and look long enough, you'll see that the perception by retail traders is that a move like AAPL's move this morning, especially when accompanied by larger volume on the move, is smart money buying and this probably explains why retail waits for confirmation and then chases a move that turns on them shortly thereafter. They get discouraged  rather than take another shot at a good position like professionals will do, retail tried the position once, if it fails they forget about it.

On this 3C chart and almost everyone you see, smart money has accumulated their position LONG before the move starts and if anything, they are more likely to be selling in to the move up than buying it. The volume spike is typically just retail traders all acting in unison as a very specific resistance zone is broken because that's what Technical analysis teaches them and that's the culture.

In any case, the 10 min chart clearly isn't confirming any movement higher, there are faster charts showing the same, but this just looked like better perspective from accumulation to distribution.

So if we look at the market in the same manner, it had it's accumulation, right now there's not much if any confirmation so the correction we saw on the charts Thursday makes sense, but it's still somewhat limited, meaning it doesn't look like a long correction (I don't want to make any assumptions about how powerful it is).

Now...

The 60 min chart tells us two things, first the next trend after a short term correction is likely to be an even stronger move up than what we saw last week (and this still applies to out market analogy) because that's a large divergence that is leading with no damage done to it that is more than capable of sustaining a much larger upside move.

However the next trend after that (the prize or big move down) is right there on this chart as well. The large negative divergence to the left is a monster, it hasn't even really started it's decline, that's not to take anything away from the strength of the 60 min divergence, but in context the 60 min positive is more like a strong counter trend bounce, it in no way takes anything away from the larger picture we see to the left.

So with two simple charts we can see the probabilities of 3 tradable trends. This is one of the trickier areas of 3C to grasp compared to most indicators, but just imagine each one of those divergences is representative of a movement of a herd of wilder-beasts (Wall St. firms).

There's a massive migration away from the area (the former uptrend or top) and then a small band of them wonder back in the direction they came from, maybe to get some water from a nearby watering hole, but eventually (unless a lot more make that journey to the watering hole in which case the 60 min divergence would do damage to the preceding negative) that smaller herd will move back to the main herd as they continue their migration downhill.

I bet you never heard hedge funds and the like compared to Wilder-Beasts! I'd use Hyenas, but as far as I know, they don't move in large herds.