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Friday, August 26, 2016

DART v2 System Start

I recorded a video how orders where placed and reviewed reasoning of my decisions during opening trades of DART v2 strategy. While on a surface everything sounds benign and almost sleepy, in reality I had a full-blown crisis on my hands. Never mind kids raising a ruckus around a house, I can live with that. But when internet went out I didn't know what to blame. My network is fine and all computers are in order, but of course I went ahead restarting, reloading and powering on-n-off stuff, until I heard some scribbling outside. THIS is the day when Comcast decided to rewire whole neighborhood and send a big and mean looking (but very polite) man to scale a wall of my house in order to cut my fucking internet cable. Took them 2 hours, which was pretty good considering... like I said here (link): "System start is always rocky. Always!"

But, as evident in this video, everything went swimmingly on my end. Orders went thru, positions were filled, all according to plan. This is a beauty of the Market - the game is always on. You can go ahead, do your thing, be busy with everyday nitpicking, while Market continues to work for you. Observe:
DART v2 Opening Allocation

DART pick

Every week, in this space, I intend to highlight one of the stocks picked by DART method.
It may come as a surprise (at least it was to me), but many of these 'DART picks' are not popular stocks. I personally have never heard about many of them on TV, or read in blogs. Even surveying Twitter and StockTwits did not return many results that were not an advertisement or some mindless click-bait. This makes me very curious - what is this strategy really investing into? I want to stress that I am not attempting to have an opinion or personal bias about any of these stocks. DART portfolio functions just fine without convoluted predictions about uncertain future prospects of it's components. It doesn't mean I will seize to ask questions: "What If...?" And you, dear reader,  shouldn't either. Really.

BRCD - Brocade Communication Systems - is a kind of business internet runs on. It is also a kind of a business - the more I read about them, the less I understand what they do. "Solutions", "innovations", "automation" and such meaningless generalities litter their business description. Company website didn't offer any help either, being an endless re-direct nightmare, I couldn't get to a page with description of a kind: 'this chunk does this', 'this hunk connects in between', 'this is how much it will cost' etc. Methinks, they either want to baffle investors with bullshit, or dazzle themselves..., but never mind that. DART doesn't need to take these conflicting points into consideration at-all.

Here is what DART Strategy does:
On August 26, 2016, right after open, BRCD collapsed by 12% on earnings announcement and became a 'worst' losing stock of DART portfolio.
According to selling rule 'b' from Original DART article post (link), BRCD has to be sold immediately. Observing a waterfall decline in a first half an hour of trading, I patiently wait for a local low to form, in order to put a Good Till Canceled (GTC) on-stop sell order just a couple of ticks below. This order will be aggressively trailed up, until caught.

I want to note, that it is not uncommon for these stocks to reverse their entire earnings decline and more. Let the Market sort it out, by banishing all wishful thinking! 'Usually' does not mean 'always'. Nothing is 100%. Just like i said here(link): "Most of Best List stocks don't react much to earnings...", well, this one did. 'Most' is not 'All'. So, for now, we have a clear task at hand - selling BRCD and finding new candidate for replacement. Real time updates are available on a private Twitter feed @SWID_iBergamot or wait for next episode of this series in a week or so...


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