The Gilmo Report

February 21, 2016

February 21, 2016

Wednesday’s alleged follow-through day (FTD) isn’t seeing much follow-through, but it also hasn’t failed as of yet. While the market’s follow-through on January 29th failed just two trading days later on February 2nd, so far Wednesday’s FTD has weathered a two-day pullback in relatively constructive fashion. While the pullback creates some tactical short-sale opportunities as beaten-down former leaders rally into areas of potential resistance, these remain short-term opportunities if the FTD does not fail outright.

The action on the daily chart of the NASDAQ Composite Index, below, shows a two-day pullback with the index closing near the peak of its intraday trading range and up on the day Friday. Despite the fact that Friday was an options expiration day, volume did not come in heavy.

 

GR022116-$COMPQ

 

The S&P 500 Index acted in a similar manner as it closed near the peak of its daily trading range on higher volume and down a half-point, virtually flat. Both the NASDAQ Composite and the S&P 500 indicate that the FTD is still intact. Objectively, from an index point of view the action following Wednesday’s FTD looks reasonably constructive.

Generally, a questionable FTD will fail rather quickly, usually within four days. Therefore this coming week’s action may be crucial in determining whether this is a short-term affair of whether a more substantial bear market rally takes hold.

 

GR022116-$SPX

 

Meanwhile, the primary issue for the market remains one of viable leadership. Unless we see leadership begin to evolve and broaden, I would tend to think that the risk of this rally failing grows. However, many broken-down leaders remain far down and deep in their chart patterns, so we could continue to see a rally that is led mostly by “junk-off-the-bottom.” This would be the proverbial “JOB” rally., and in a QE market JOB stocks can lead a rally a lot further than most think.

Therefore I think it is mostly a matter of staying alert to opportunities on either side of the market. This implies, of course, that we take a bifurcated approach where we evaluate set-ups on both the long and short side in the pursuit of profitable trades. As well, I would consider most such trades to be of a short-term nature unless we start to see a broadening swath of strong, new leadership start to emerge.

In terms of looking for “big stocks” to buy, I am somewhat ambivalent when it comes to my current view of Facebook (FB). On the daily chart below we can see that it is resting along its 50-day moving average after a wedging type of rally back up into and just above the line.

The reality here is that you can look at this one of two ways. The first is as a constructive recovery rally that retakes the 50-day line and which continues to hold the line as volume dries up. The second is as a wedging rally up to and just beyond the 50-day line as buying interest begins to wane. This is also typical of rallies that are seen in a stock right after it has an initial, prior late-stage base-failure, which is what FB became in early February after it busted the 50-day line on heavy selling volume.

 

GR022116-FB

 

The only way that we can determine for certain what type of set-up this is will be to see how it resolves. And how it resolves will very likely depend on what the general market does from here. If we see this latest follow-through day fail like the one in late January did, then the chances are quite high that FB will roll over for a retest of its 200-day moving average. If the general market continues higher, the stock may be able to spring up and off of the 50-day line, preferably with some authority in the form of strong buying volume, and make a run for its prior highs.

My other “big-cap, big-stock hope,” McDonald’s (MCD) is acting much weaker along its 50-day moving average. Like FB, MCD had its own late-stage failure in early February that took it just below the mid-January low before it rallies back up above the 50-day line.

The confusion being created here is that first we see strong volume push the stock back above its 50-day moving average early this past week. That, however, fails to hold, and we see heavy selling volume come in and push the stock back below the 50-day line at the end of the week. This looks like a stock that is seeing alternating conviction from buyers and sellers as it flops around the 50-day line with no clear direction at hand.

 

GR022116-MCD

 

The bottom line for MCD is that it is a de facto late-stage breakout failure that has rallied back up into its 50-day moving average where it is running into selling volume. Therefore, on the basis of this latest information, it starts to morph back into a short-sale target using the 50-day line at 118.14 as a guide for a tight upside stop. How it eventually resolves, however, will likely be a function of where the general market goes from here.

Panera Bread (PNRA) has so far played out as a Jesse Livermore Century Mark long-side set-up as it has cleared and held the critical $200 “Century Mark” price level. The stock ran into some selling pressure on Thursday, looking as if it were on the verge of morphing back into a short-sale target on the basis of Livermore’s Century Mark Rule in Reverse.

Because we have a fair number of new Gilmo members who have come onboard recently, allow me to quote from Reminiscences of a Stock Operator by Edwin Lefevre where Jesse Livermore talks about his long and then short play in Anaconda Copper at the time of the market top in 1907. It is this narrative that provided me with the basic idea for the Century Mark Rule and its use on both the long and short sides of a stock:

“The first thing I saw on the quotation board was that Anaconda was on the point of crossing 300…It was an old trading theory of mine that when a stock crossed 100 or 200 or 300 for the first time the price does not stop there but goes a good deal higher, so that if you buy it as soon as it crosses the line it is almost certain to show you a profit. 

I figured that when it crossed 300 it ought to keep on going and probably touch 340 in a jiffy. My buying it because it crossed 300 was prompted by the desire, always strong in me, of confirming my observations. 

Anaconda opened at 298 and went up to 302¾ but pretty soon it began to fade away. I made up my mind that if Anaconda went back to 301 it was a fake movement. On a legitimate advance the price should have gone to 310 without stopping. If instead it reacted it meant that precedents had failed me and I was wrong; and the only thing to do when a man is wrong is to be right by ceasing to be wrong.”

In this case Livermore immediately reversed his long position in Anaconda Copper and went short, making huge profits as the stock plummeted from 75 to around 53 over the next four weeks. I have used Livermore’s rule both on the long and short sides with reasonable success over the years, and it is often quite handy in identifying ripe short-sale targets when a stock fails at a key Century Mark.

Back in January of 2008, Apple (AAPL) failed at the $200 price level and became a very nice short as it declined -43.1% off the peak in two months. In September of 2012 AAPL failed at the $700 price level, leading to a -45.4% decline over the next 6½ months.

So whenever I see a stock crossing a Century Mark price level, such as PNRA at the $200 mark, I am watchful for the situation to play out as a long or a short set-up. In PNRA’s case, it was a buy this past Monday as it pushed up through the $200 price level, and the stock continued as far as 207.44 before reversing to retest 200 again.

At that point, one could have bought the stock looking for it to hold critical support at the 200 level. If it failed, however, the stock would morph into a short-sale target, in much the same manner as Anaconda Copper morphed into a short-sale for Jesse Livermore back in 1907.

 

GR022116-PNRA

 

PNRA is perhaps having a bit of trouble gathering up a head of steam as it clears the 200 price level, seeing as how it has only gotten as far as 207.44. That’s a little over 3% above 200, and I have to think that it would disappoint the great Livermore. In any case, PNRA can be treated as a long situation as long as it holds the 200 price level. If it busts that level on volume, then it morphs back into a short-sale target. So one simply plays it as it lies.

On the short side of the market, some tactical opportunities have cropped up as stocks rally into areas of resistance. Sometimes this is helped along by an upgrade from an analyst firm. Such was the case with Workday (WDAY) on Friday, at least in the short-term, as a no-name firm, OTR Global, upgraded the stock to “positive.” What that means exactly is not all that clear to me, since stocks are generally either buys or sells as far as I’m concerned. The term probably allows one to pump the stock without really recommending it, I suppose.

In any case, it did send the stock right up into its 20-day moving average, where it reversed slight. This has the look of a slight stall-out at the 20-day line on heavy volume. WDAY suffers from the fact that it is an “infinite PE ratio” stock given that it loses money hand over fist. With no earnings, the PE ratio becomes P/0=infinity. In this environment, a stock with this sort of valuation is vulnerable, as has been the case with the stock so far in 2016.

I view it as a short here using the 20-day line as a guide for a tight stop. WDAY is scheduled to announce earnings on “Leap Monday,” February 29th. In the meantime, I would look to short the stock as close to the 20-day line as possible while keeping it on a tight leash. Given how beaten-down it is, a further reaction rally is always possible, and this is something we want to guard against.

 

GR022116-WDAY

 

Amazon.com (AMZN) was another tactical short-sale situation that ran into the confluence of its 20-day and 200-day moving averages on Thursday and reversed on light volume. This sent the stock down a good 25 points by early Friday before the stock reversed to close up on higher buying volume.

For now I would continue to view the 200-day moving average as potentially solid resistance for the stock until proven otherwise. This would make it a short at current levels using the 200-day line at 540.99 as a guide for an upside stop.

Keep in mind that as with other short-sale targets rallying into potential resistance, any failure at resistance is likely to be highly dependent on what the general market does from here.  However, as the market rallies, it is important for those who play the short side to remain mindful and aware of where short-sale targets are at within their overall chart patterns. AMZN therefore qualifies as one that is pushing right into a potential area of upside resistance.

 

GR022116-AMZN

 

We can also see that after reversing hard from the 20-day/200-day moving average confluence, AMZN found support near the opening lows on Friday. It then reversed to close up on the day on higher volume. A reasonable question to ask is how one handles this sort of quick break followed by a reversal back to the upside in order to ensure a profit on the short side.

It’s instructive to review AMZN’s 5-minute “620” intraday chart to show how I look to handle situations like this monitoring the 5-minute chart. I originally began to use the 620 intraday chart to keep me from squandering short-sale profits as a stock reversed back to the upside. For those unfamiliar with the 620, please refer to our glossary.

In studying my own short-sale trades over the years, I noticed that my biggest mistake was not having any mechanism for determining cover points and nailing down profits before a reversal to the upside was at hand. I was already using the 620 chart to analyze intraday movements in forex, or foreign exchange, and I found that it was also quite effective and adaptable to trading stocks, especially on the short side. Let’s see how it worked in AMZN over the past two days.

After finding resistance around the 20-day/200-day moving average confluence on Thursday, AMZN began to trend lower right into Friday’s open, reaching a low of 515.35 a mere ten minutes after the opening bell. That led to a short bounce and then a retest of the 515.35 low about 25 minutes later.

Note that this retest came on much lighter volume, and was accompanied by a MACD cross to the upside. That’s my cover point. If I wish to give the stock more room. I can wait for the moving average cross to confirm the turn, but by that time I’ve given up another 6-8 points of upside. So in this case, I’m using the first signal, the MACD cross, combined with a type of intraday “Wyckoffian Retest” and low to determine a cover point. This enables me to peel off a good 20 points or so off of the original entry near the 540 price level and the moving average confluence.

This example also helps to illustrate that the 620 intraday chart is not a “trading system.” It is simply a tool that I use to interpret where a turning point might be developing so I can nail down profits. The precise manner in which I use the chart can vary slightly, but it generally entails a combination of various interpretive factors beyond just looking for a MACD and moving average cross one way or the other.

For new members not familiar with this chart, it is quite simple to set up. You just take your standard 5-minute intraday chart (I prefer candlesticks over plain bars) and overlay a 6-period and 20-period exponential moving average. You then add MACD lines and a MACD histogram with settings of (6, 20, 9, C).

This, of course, is the simple part. Over time, one must learn to use the chart as an interpretive tool. It is not as effective to take the simplistic route of trying to use it as some sort of mechanical buy/sell signal-generating system. Smart, creative traders might also find that they can modify the chart somewhat to suit their own interpretive needs. One might even come up with their own version, like a “721” or “922” intraday chart that uses slightly different moving average and MACD settings.

Over time, I have also learned to utilize the 620 chart tool to help time entries on long ideas that are pulling back into a lower-risk buy position. In this way I have found that the chart is not only useful for trading forex or shorting stocks, but also for the long side of stocks as well!

Getting back to the long side of this market, we can see that Hawaiian Holdings (HA) is one of the few breakouts that has had any upside thrust since the follow-through day. The trick here, however, was catching the trendline breakout on Tuesday of this past week. On Friday HA broke out on a closing basis to post an all-time closing high. However, volume, was merely average, and the stock is well extended from where its last lower-risk entry point was along the 50-day line or on the trendline breakout.

As I discussed in my Wednesday mid-week report, the trendline breakout occurred at around the 36.50 level. Therefore constructive pullbacks into that price area might present a lower-risk entry. However, be aware of the quality of the pullback. If HA fails on this breakout attempt and selling volume picks up, then buying into such a pullback would be much riskier.

 

GR022116-HA

 

Cree, Inc. (CREE) is another smaller name, like HA, that continues to act well and certainly shows no signs of being as confused as some of its larger-cap brethren. After breaking out of its two-month price range in early February, CREE has been able to move higher as it pushed to a higher-high on Wednesday of this past week.

As I noted in my Wednesday mid-week report, the small price range on above-average volume showed signs of short-term stalling and indicated that a pullback was likely. The pullback has occurred, and I would add that it looks fairly constructive as the stock approaches the 10-day line. Selling volume has remained relatively light. Ideally, I would like to see this come in closer to the 10-day line at 29.65 on continued light volume. This would provide the lowest-risk entry point from here.

 

GR022116-CREE

 

Smith & Wesson Holding Corp. (SWHC) is holding tight after Tuesday’s gap-up move on an increase in volume that was still below average. The stock closed tight on Friday as volume dried up sharply. As I discussed in my Wednesday mid-week report, one could have bought the stock on the basis of Tuesday’s gap-up, using either the low of the gap-up day’s intraday trading range at 23.17 or the 10-day line, now at 22.46, as a selling guide.

Ideally, I’d prefer to take an opportunistic approach by waiting for a pullback to the 10-day line at 22.46, but there is no guarantee that this will occur. The stock does have strong earnings and sales growth to go with its constructive chart, and it sells at 17 times forward estimates. In this market, that probably offers you some degree of safety as I am suspicious of huge P/E or infinite P/E stocks in this environment.

 

GR022116-SWHC

 

Tuesday night I blogged about these little OEM suppliers who traffic in lasers, optics and other related gizmos for the telecom industry, Fabrinet (FN) and Lumentum (LITE). Both of these stocks have acted reasonably well since the follow-through day, but they are smaller names that trade much lower daily dollar volume.

One option with these thinner names, as I noted, would be to buy them as a basket. Speaking for myself, a $25 stock trading 500,000 shares a day is difficult to handle given that I need to buy a relatively large number of shares to fill out a meaningful position in the stock. For those with smaller accounts, or those who might want to try buying a basket of these names rather than just one, they might work. However, I am more interested in buying these on weakness than chasing them on strength.

FN offers a reasonable lower-risk entry point here as it pulls back into the 10-day moving average on light volume. The idea here is fairly simple. You buy the stock at the 10-day line and set a tight stop at the line or give it more room down to the 20-day line at 27.26.

One caveat is that FNB had a buyable gap-up in early February, and has made little progress since then as it has tracked sideways over the past 12 trading days since the BGU. One could argue that the market environment has put a lid on the stock’s upside potential, and if the general market rally continues it could pop. I would tend to agree with this argument, and the litmus would of course be that a) it holds the 10-day line and b) pops to a new high and holds that high within a few days, at most.

 

GR022116-FN

 

FN’s cousin stock, Lumentum (LITE) looks somewhat similar, except that it does not have a buyable gap-up in the pattern. It actually broke out in early February on a move that stalled and closed below the mid-point of the daily trading range.

That, however, did not keep the stock from gapping to a higher high the next day. Since then, LITE has tracked sideways until recently meeting up with its 10-day line, at which point it attempted to break out this past Wednesday. That breakout attempt went nowhere, and now the stock is coming back into the 10-day line as volume picked up slightly but remained at about average on Friday.

This would put the stock in a low-risk entry point using the 10-day line as a guide for a tight stop. Alternatively, for those who might want to give the stock more room, the 20-day line at 22.52 would serve as a lower selling guide.

 

GR022116-LITE

 

Both FN and LITE are forward-looking stories, and both trade at 20 times forward estimates or less, which keeps them out of the stratospheric valuation category and perhaps adds a measure of safety in an uncertain environment. However, they are smaller names, and hence subject to more volatility if the general market gets out of control on the downside. This is something to keep in mind if one decides to test these stocks out on the long side.

As we’re seeing in these examples it is the smaller names that act better and which are also not JOB types of stocks. They actually have constructive-looking chart patterns and are acting reasonably well. Whether they can serve as solid leadership for a bold, new bull phase for the general market is another question altogether.

The precious metals mining stocks might also be considered “out of the box” long situations as they all, for the most part, continue to rally right along with the price of gold. The general pattern on any given days is that if gold is up, the stocks are up, and if gold is down, the stocks are down. However, within this up/down correlation both the metals and the stocks remain in strong uptrends.

Silver Wheaton (SLW) is my favored name in the group primarily because it has had the most readily identifiable reference points for support on any pullbacks. Most mining names are extended and nowhere near a key moving average that would provide a reference point for support on pullbacks. Initially, SLW’s 200-day moving average served as a reasonable guide for support, but the stock has continued higher and is now extended from the 200-day line.

Notice, however, that the magenta 10-day moving average at 14.18 is now above the red 200-day line, and this now serves as a new reference point for support on any pullbacks. Thus we would look for any constructive pullback into the 10-day line as a potential lower-risk entry point from here.

 

GR022116-SLW

 

The key to success for any of these mining stocks, however, is going to be the viability and sustainability of the current rally in the precious metals, gold and silver. The charts of the SPDR Gold Shares ETF (GLD) and the iShares Silver Trust (SLV) show a similar picture, with both metals continuing to trend higher as they move along their 10-day moving averages. Both ETFs also found support at their 10-day lines on Thursday on above-average volume. Both could be considered buyable along their 10-day lines, using that as your selling guide.

 

GR022116-GLD

 

A critical difference with the SLV, however, is that it is nearer to its 200-day moving average, which provides an added reference point for support on any pullbacks. However, I would expect both ETFs to track together as they have so far along their 10-day lines. One could also argue that the GLD is stronger because it is in fact much further above its 200-day line than the SLV. To me it’s more like six of one and half a dozen of the other as the two should continue to correlate.

 

GR022116-SLV

 

The metals and the miners all began their sharp rallies in early February, which initially led me to believe that this was due to a fear bid more than anything else. Since the metals and the miners have been able to maintain their uptrends even after the market has turned off of its lows of last week, that theory is out the window, as I discussed in my last report.

My updated theory regarding the metals and the miners is that their rally is due to the market’s assessment that central banks, including the Fed, are not likely to be raising interest rates any time soon. And, in fact, they may be looking for newer, more creative ways (okay, maybe not that creative) of QE such as negative interest rates, otherwise known as NIRP. If we saw that occur, then I think we likely see the metals skyrocket.

On Thursday morning I blogged that the solar stocks were flaring out after starting put the day in rally mode after Sunpower (SPWR) reported earnings the day before in the after-hours. As I wrote at the time, the negative and bearish reversals brought them all into play as short-sale targets.

SPWR had the ugliest flare out as it staged a big-volume outside reversal to the downside. This quickly brought the stock into play as an actionable short, and it continued lower on Friday on heavier selling volume. From here, my initial downside price objective would be the 19.68 low of mid-January.

 

GR022116-SPWR

 

First Solar (FSLR) also reversed off of its morning peak on Thursday as SPWR reversed, but its sell-off was far less severe. In fact, the stock closed slightly up on the day after stalling out at the 50-day line. On Friday FSLR closed in the upper half of its daily trading range as volume remained light. What is probably helping to keep FSLR from getting run over by a stampede of sellers the way SPWR has is the fact that it is scheduled to report earnings Monday after the close. This might send the stock gapping back above the 50-day line, or it might send it careening to the downside.

My preference would be to wait and see what happens after earnings, as this might set up a short-sale opportunity similar to SPWR’s. There is no reason, however, to assume that it will necessarily blow up after earnings. Thus we can dispense with the idea of playing “earnings roulette” with FSLR on Monday after the close. We will see how it plays out once earnings are out.

 

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SolarEdge (SEDG) also reversed with SPWR on Thursday, but ended the day right at its 50-day moving average. It also was not pummeled by sellers as volume dried up sharply to -55% below-average. On Friday, the stock did drift just below its 50-day line with selling volume picking up. However, Friday’s volume rate was still at “voodoo” levels, coming in at -43% below-average. On balance, the stock actually looks like it is engaged in a normal reaction type of pullback after the sharp move back above the 50-day line on Monday of this past week.

Another noticeable feature about Friday’s action is that the stock did find a modicum of support off the intraday lows, closing slightly above the lows but just shy of the mid-point of its daily trading range. Perhaps SPWR’s woes are its own, and names like FSLR or SEDG might stand a fighting chance IF the general market remains in rally mode. This is something to watch for as we head into next week and FSLR’s expected earnings announcement on Monday in the after-hours.

In the meantime, SEDG’s price action might just be an “Ugly Duckling” type of move as the stock dips just below the 50-day line enough to fool everyone before heading back to the upside. For this reason, SEDG remains on my buy watch list.

 

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The ability of the general market to sustain its current rally, perhaps turning it into a more substantial bear market rally, may depend to some extent on the action of the financials. Last weekend I discussed J.P. Morgan (JPM) as a possible “shakeout-plus-three” long following its big-volume gap-down two Fridays ago that was followed by a big-volume gap-up the following Monday. If the prior low was the mid-January low at 54.66, then the 57.66 price level would constitute the SO+3 buy point.

Here we see that JPM has tucked into its 10-day moving average on a very light volume pullback over the past couple of days, closing Friday at 57.82. The 10-day moving average lies just below at 56.93. If the general market is able to continue its rally next week, this might be good for at least a trade up to the 50-day line at 60.65, using the 10-day line as a guide for a tight downside stop.

 

GR022116-JPM

 

The main issue for financials is their exposure to oil industry debt as the price of crude oil continues to decline. As I discussed last weekend, any meaningful rally in crude oil back up towards the $40/barrel level could positively impact financials and create tradeable rallies. The trick in this case is to figure out how to catch a tradeable rally in a financial, and JPM’s pattern probably provides one of the more reasonable set-ups in this regard. Play it as it lies!

The index action following Wednesday’s follow-through day so far looks constructive. The primary issue, as I’ve already pointed out, remains the dearth of leadership. For this reason I am leaning more towards a bifurcated approach as I keep an eye out for potentially actionable set-ups on both the long and short sides of the market.

Long-time members know that such an approach is not unusual for me, particularly when the market is in what I would consider to be a low-conviction rally. This sort of rally is characterized by a distinct lack of robust, new leadership while most of the movement comes from JOB stocks rallying from deep down within their chart patterns.

Of course, such an approach is best suited to nimble traders who are flexible and open-minded. Many traders and investors have difficulty, from a psychological standpoint, of being both bearish and bullish at the same time. That is fully understandable. But as Jesse Livermore said, true success in the markets lies in not being on the bear side or the bull side, but the right side.

For those who only wish to play the bullish side of the market, there are some set-ups that can be utilized in such an endeavor, as I’ve already discussed in this report. Certainly, it would be much easier for me to become a charging bull if I saw what I considered to be strong leadership with a compelling thematic basis for a sustained uptrend.

Right now, I don’t see much in this regard, but then sometimes certain stocks can surprise you. When I first looked at HA’s breakout back in early October of last year, for example, I didn’t give it much of a second thought. It then took off on a 56% upside run from there. The moral of that story: Assume nothing, and operate solely on the basis of what the individual stock set-ups are showing you.

Maybe this rally keeps going, maybe it fails in the next few days. We simply cannot know, but that’s not really a problem as I see it. The market is all about learning to deal with and handle uncertainty. The most efficient way to do this is to operate on the basis of what real-time evidence is showing you. As well, one must always remain flexible and open to this evidence, particularly if it disconfirms one’s current view and necessitates a shift in strategy.

With this in mind, we can approach this coming week with a positive attitude as we seek to capitalize on whatever opportunities the market throws our way. All we have to do is keep our eyes and minds wide open enough to see them when they occur.

One final, important point. As the market rallies, those traders who like to play the short side when opportunities arise should continue to monitor our list of short-sale target stocks. I last published the list on Thursday in the Gilmo live blog and will update it on the blog as necessary.

Keeping a close eye on these stocks as they rally may provide some useful tactical shorting opportunities. This can sometimes be helpful from a psychological standpoint if one is also trying to hold a long position or two as the market pulls back. This is when a bifurcated approach can perform double-duty, and for those who can execute it properly, it can be a beautiful thing. That is all.

Gil Morales

CEO and Principal, Gil Morales & Company, LLC
Managing Director and Principal, MoKa Investors, LLC
Managing Director and Principal, Virtue of Selfish Investing, LLC

At the time of this writing, of the stocks mentioned in this report, Gil Morales, MoKa Investors, LLC, Virtue of Selfish Investing, LLC, and/or Gil Morales & Company, LLC held a position in FB and WDAY, though positions are subject to change at any time and without notice.

Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2018 Gil Morales & Company, LLC. All rights reserved.