Market Blog » The Arora Report Stock Market News

STOCK MARKET SENTIMENT STILL FLASHING CAUTION: NOT PRUDENT TO INITIATE LONG POSITIONS YET (SPY,QQQ,DIA)

August 16, 2011

We are long QQQ (QQQ). Some accounts we advise are also long SPY and DIA. As long time readers know, I follow the ZYX Change Method. The method combines fundamental, quantitative, and technical analysis. From a fundamental and quantitative point of view, the stock market is not expensive and should move up. However, the sentiment component of the technical screen of the ZYX Change Method is flashing caution. For us, sentiment is an important indicator. We use a proprietary sentiment indicator that is a composite of the following: Emails from our subscribers and clients AAII Survey Option skews Put

INTERDIGITAL (IDCC): TAKING PROFITS

August 15, 2011

Bought to cover Interdigital (IDCC ) at $59.56. Now we have exited tis position.

PARTIAL EXIT ON QQQ (QQQ)

August 15, 2011

Exited a 10% tranche on QQQ (QQQ) at $54.07. For details, please see the Real Time Feed of the ZYX Buy Change Alert.

ADDED TO INTERDIGITAL (IDCC)

August 15, 2011

Added a 5% tranche to InterDigital (IDCC) at $61.58. Stop on this tranche is $62.26.

PARTIAL EXIT ON ZAGG (ZAGG)

August 15, 2011

ZAGG (ZAGG) is trading up on earnings. We do not believe that ZAGG’s earnings are sustainable and will continue to maintain a small short position. Anyone holding a short position in ZAGG may trim right here as there is a risk of a short squeeze. Please hold positions only in such size that you are comfortable to hold during a potential short squeeze. Those not in the ZAGG may wait for higher prices before entering. We partially exited ZAGG at $15.65. If ZAGG falls below $14.88, consider short selling enough quantity to reach 100%

SHORT ON INTERDIGITAL (IDCC)

August 15, 2011

We are short a 5% tranche on InterDigital (IDCC) at $66.03. This is for aggressive traders who can handle a very volatile stock. Target zone for InterDigital is $55 to $57. Stop zone is $68. to $71. Please keep quantities of InterDigital very small. The reason is that GOOG will not bid for this company because it no longer needs its patents after MMI acquisition. Full disclosure: subscribers to ZYX Short Sell Change Alert may also be short InterDigital from a similar level.

INFORMATION ON ACACIA RESEARCH CORPORATION (ACTG, GOOG, MMI, AAPL)

August 15, 2011

Acacia Research Corporation (ACTG) is a company that enforces patents. Acacia Research has a relationship with MMI. GOOG is likely to be more aggressive in enforcing patents especially against the likes of AAPL. If GOOG hires Acacia Research, it will be a windfall for Acacia Research. On the other hand GOOG may handle it all in-house, then Acacia Research will be a loser. We are simply providing information and not recommending. Periodically we provide information on stocks that can make a lot of money for aggressive traders but do not meet our strict criteria