My Favorite Follows on StockTwits

In the three years I’ve been a market participant, StockTwits has quickly become an invaluable tool for me. This community is home to some of the smartest market participants out there, and the platform allows for a constant flow of market information, healthy debate, and knowledge sharing. With that being said, in order to fully take advantage of this powerful tool, it’s important to curate your own stream with users who provide the information that helps you to navigate the markets and improve your own process. Regardless of your timeframe, strategy, or education level, I can guarantee that if you take the time to curate a stream of your own, StockTwits will become a valuable tool for you as well.

Before I get into my 5 favorite follows, I just want to echo the recommendations that Ryan Detrick and J.C. Parets made in the posts that preceded mine. I agree wholeheartedly with their favorite follows, but in an effort to avoid repetition I’ll focus on five that have yet to be mentioned.

Without further ado, here are my 5 favorite follows on StockTwits:

Howard Lindzon @HowardLindzon – I know this one seems like a total copout, but hear me out on my reasoning. When you follow Howard, you’re essentially following 100s of the best market participants on the site.  Not only does Howard share his own trades and commentary on the markets, but he’s constantly sharing work from, and interacting with, some of the best and brightest minds on the site. Plus, Howard has a vested interest in the site; therefore you know he’s going to be consistently adding value to the stream.

SeeItMarket @SeeItMarket – Though this second one may seem like a plug since the members of DRC and I have started to contribute to this site recently, the reasoning for its presence on the list is very similar to Howard’s. When you follow this account your stream is going to be filled with quality, timely content from all of their contributors. The list seems almost endless and ranges from folks like Ryan Detrick to Ben Carlson and Venky Srinivasan.  Andrew Nyquist, the site’s founder, has done a great job at building a stream that offers a variety of perspectives on almost any market you can think of. Regardless of timeframe, strategy, or education level, there’s bound to be something for everyone on this stream.

Jon Boorman @JBoorman – If trend following is your thing, Boorman is a must follow! He was one of my first follows when I first began learning about markets almost three years ago and I can honestly say his insights have been invaluable. Whether you’re looking for thoughts on position sizing and portfolio management, or for stocks setting up for big moves, Jon’s stream is the place to be. Also, if you happen to catch his streams on Periscope you can witness him crushing the music game as well!

Greg Harmon @HarmonGreg – If you’re interested in incorporating options into your process, Greg Harmon is the guy to follow. He’s consistently sharing great charts and market analysis for a variety of asset classes from around the world. Greg is always looking to utilize options in a way to manage risk and express his market views in a more capital-efficient way, which offers a nice change of perspective from those simply trading the underlying.

Ivaylo Ivanov @Ivanhoff – Whether it is interesting charts or setups, quotes and insights from the best market participants, or just quick comments or analysis of a particular market or stock, Ivan’s shares are always timely and insightful. I find myself constantly referring to his stream for stocks making moves that I may have missed during my own analysis, as well as to gain a perspective on where the momentum in the market is.

There are a lot more great follows on the stream, but these are a few of my favorites. Check out the full list of people I follow on StockTwits and build your own curated list to help you navigate financial markets and accelerate your learning process.

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The Power of Social

For better or for worse, social media has become an integral part of our personal and professional lives. Whether you’re applying to college, searching for a job, or just trying to find the “perfect” significant other, you can rest assured that your counterparty will be combing through your online presence at some point. In fact, in the “Recruiters Nation 2015 Survey”, 92% of recruiters said they used social media in at least part of their process of recruiting candidates. Roughly 86% of respondents reported using LinkedIn, followed by Facebook and Twitter at 55% and 47% respectively.

Additional studies have suggested that recruiters and other third parties will even Google your name as part of their process, likely giving them full access to your whole online presence: everything from your blog to that selfie you posted on Instagram a few years back. This can be a huge positive, or negative, depending on how strategically you curate what information you post on the interwebs. While you might think that selfie might not make you appear to be a more attractive candidate, industry data suggests that simply posting to a personal website on occasion can give you a big leg up. In a study conducted by Workfolio in 2013, 56% of all hiring managers stated that they were more impressed by a candidate’s personal website than any other personal branding tool; however, only 7% of job seekers actually have a personal website. Moreover, it wouldn’t surprise me if both the numbers discussed above have increased in the two years since the survey was conducted, but either way, it’s clear that candidates with a personal website have a quantifiable edge over their peers.

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Technical Analysis Guide

A few months ago I created a Technical Analysis “crash course” to help one of my good friends prepare for his summer internship. I’ve shared it with a few people and it proved to be of value to them, so I decided to clean it up and share it via PDF below.

Please feel free to download and share it with those whom you think may benefit from the information it provides.

It is a free download. My only request is that you provide feedback so I can periodically update/improve the content to better serve the needs of those trying to learn about the subject.

Technical Analysis Guide

As always, if you have any questions feel free to reach out and I’ll get back to you as soon as I can.

What is Technical Analysis?

What is Technical Analysis?

It refers to the study of the action of the market itself as opposed to the study of the goods in which the market deals. Technical Analysis is the science of recording, usually in graphic form, the actual history of trading (price changes, volume of transactions, etc.) in a certain stock or in “the Averages” and then deducing from that pictured history the probable future trend.

John J. Murphy: Technical analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting future price trends. The term “market action” or “price action” includes the three principal sources of information available to the technician – price, volume and open interest.

Market price tends to lead known fundamentals. Market price acts as a leading indicator of the fundamentals or the conventional wisdom of the moment.

Three Main Premises:

  • Price Discounts Everything
  • Prices Move In Trends
  • History Repeats Itself

Additional premise: Markets are fractal, meaning that patterns (in this case resulting from the psychology of market participants), appear at every scale. This is the reason why using a 200 period moving average or 14 period RSI will produce similar results, regardless of the timeframe they’re used on (i.e. daily vs weekly chart, 5 minute vs 65 minute chart).

One of the largest advantages technicians have is the ability to apply our tools to any liquid asset class, giving us the ability to analyze and invest in thousands of liquid products across the globe. Additionally, as technicians we’re not concerned with the “why”, but rather the “what”, “when” and “how long?”

Sentiment

Sentiment is another factor that is widely used by technicians in their analysis. Concensus can be right for a long time, but is usually wrong at extremes. There are a number of tools that can be used to gauge sentiment for a specific security. It is important to remember that sentiment is secondary to price action and should not be used as the sole reason for an entry / exit into a position. Large unwinds in sentiment can lead to aggressive moves in the opposite direction of the initial trend.

Polls:

There are a variety of polls that are put out by different institutions that look to gague sentiment of different types of market participants. The idea is to watch these polls for extreme bullish or bearish readings, relative to historical norms that is. What happens in the middle of those polls is mostly noise, but the extreme readings can by very helpful in a technician’s analysis.

Commitment of Traders Report:

The commitment of traders report shows the net positions of futures and options for commercial hedgers, large speculators (institutions), and small speculators. This data is important because commercial hedgers are said to be the “smart money” because they are the ones whose businesses deal with the goods in which they are trading. They are essentially the insiders of the futures markets, whereas companies are the insiders of the stock market. There are also indicators that can be constructed using these data points including the C.O.T. Move Index and the C.O.T. Index.  I won’t get into this much further, but this is just another report to be aware of and made use of in your analysis. Check out timingcharts.com for on this subject.

Options Market:

The options market is a valuable tool in identifying the biases of institutions. By analyzing where the largest open interest is as well as scanning for large block trades and heavy volume, we can identify where the “smart money”, or institutional traders, are expecting the stock to go. The caveat here is that we although we may be able to see what position they are putting on in the options market, we do not know who the players are, nor do we know what role that position is playing in their overall portfolio.

Short Interest / Days to Cover:

The largest moves occur at extremes, which is why it is important to pay attention to short interest. This data can be found at Nasdaq.com and is reported twice monthly. How significant an amount of short interest is really is all relative to what it was for that particular security in the past. There are two numbers that are important.

  1. Shorts as a % of float: The float is the amount of shares available to be traded in the public (secondary) markets. If a security has a large percentage of its available shares (float) sold short, it can signal that concensus is overly pessimistic and that under the right conditions, a short squeeze may insue.
  2. Days to cover: Days to cover is used to determine how many days on average daily volume would it take for all the shares that are sold short to be covered. I usually use the 10 day average, but it really is a matter of preference.

Sell Side Analyst Coverage:

Another important indicator of how optimistic or pessimistic concensus is about a security is to look at how many sell side analysts that cover the stock have it as a buy rating. If a large percentage of the analysts are rating a stock a sell or hold, that presents what may be an overly bearish concensus view. The same applies if a large percentage of the analysts are rating a stock a buy, that presents what may be an overly bullish concensus view. Looking at this type of information may assist you in identifying extremes that may present good risk/reward scenarios if price confirms this secondary data.

Stocktwits / Twitter: 

Both stocktwits and twitter provide valuable information on how individuals are currently viewing the market or a particular security. Although it can be hard to quantify what the views actually mean, it may be helpful to use this info as anecdotal evidence to support your thesis. If you think that there’s no value in this, just try to post something bullish about a stock that nobody likes and see the hate and flack you get. Everyone hated treasuries to start the year, and now they’re on of the best performing asset classes of  2014.