Friday, June 29, 2007

Los Campesinos, "You! Me! Dancing!"

It's a party weekend.

Early Fireworks

More like bombs!

I woke up and saw that the 200 share short position I held overnight in TNH was going to rip my face off at the open. I stayed short overnight because I got short yesterday in the middle of the afternoon and it never reached my buy stop that I had up at 128. So, I started the day down $700.



Then all was kind of quiet. I actually bought TNH and made most of my losses back in him on the long side. But then I noticed IOC. This stock has been demolished recently. Today was the first day I decided to stick my toes in the water of this lunatic.

It's bad enough that the stock has lost over half of it's value in the last few trading sessions. Worse yet, it trades on the (enter scary music here) AMEX!

I won't bore you with all of the details, but let's just say I remembered why I don't trade these falling knives anymore... it's simply because I want to live a long healthy life.



It ended up being my worst stock of the day, I lost $233 in him. No disaster ( I don't really own 20k from $44...) but still, it wasn't pleasant and kept me mentally wrapped up in a real piece of shit. Meanwhile, I had other stuff that was working in my favor.

Again, I made most of my good trades today on the short side. My best was a short in VNO but I also had good shorts in VMC, EDU and HXM. Additionally, I had one good long today, in LNN.



Next week is going to be completely dead. And, I have a very strict plan that I intend to follow so that I use the week constructively.

I will more or less be papertrading and studying the market. I am going to limit myself to 10 trades a day and study Maoxian's setups that Woodshedder gave me the link for.

I will also surf and spend time with my family. We also have another goddamn children's party to go to... But mostly, I'm just gonna chill out and come back strong and ready for Monday July, 9.

I said yesterday that July is a pivotal month for me. This is because it has literally been months since I've made good money trading. We have fairly modest expenses here but I have to face reality. If I don't make money in July I will start sending resumes out. I can manage to trade and not make any money doing it until December, but after that I'll probably have a nervous breakdown.

So, in order to avoid that kind of event, I'm planning ahead. I figure that having to write up a resume and trying to present myself in some type of professional manner to people who are judging me should scare the shit out of me enough where it will really get me to focus hard on trading well. Maybe "the fly" will pay me to be a weekend blogger. I'll do it for $2500 per weekend. Sound good?

Trading is a great job when the money is pouring in. You are completely free. If you don't respect that you lose that freedom. Anyway... have a safe weekend. If you're drunk, call a cab.

Here's the stats.

P&L, $283
Best, VNO, $457
Worst, IOC, -$233

shares traded, 23,800
stocks traded, 15, 8 positive, 7 negative
total trades, 139

Virtual Office, -$81. Dow, -13.66, 13408.62.

Misstrade, $525 on 2000 shares traded.
HPT, $326 on 23 contracts traded.
Me, $283 on 23,800 shares traded.
Denarii, vacation, chilling with Dehtrader.
OBAT, jet-lagged
Evolution, -$1215 on 27,300 shares traded.

Nothing doing in the VO today. The market had another ugly reversal day. At least there's no inflation in the economy...

I still don't believe that.

Have a great weekend everyone. Be safe if you're drinking and driving. Like, at least drive a Hummer or something.

What Happened To The Market? It Was Jumped!

IOC... The "C" Stands For Crazy





I don't know a damn thing about the company... but when you see a stock graph like this I think of the "F" word.... Fraud.

Bowerbirds, "Dark Horse"

Makes me want to go take a hike or something instead of absorb the glow from my screens.

Thursday, June 28, 2007

Procol Harum, "A Whiter Shade Of Pale"

"...although my eyes were open
they might have just as well've been closed."

"Philosophistal"

If I was a stock, I'd imagine the chart would look like hell. Gains in low volume and losses in high volume... the institutions are clearly selling.

Not much to explain today, I barely traded. Here's the stock that accounts for 85% of my loss.



Here are my trades in CF:

9:34:35 Short 200 @ 58.40 (-200)
9:43:56 Short 100 @ 58.31 (-300)
10:03:24 Short 100 @ 58.95 (-400) *note adding to the losing position
10:58:36 Short 100 @ 59.22 (-500)
11:06:57 Short 100 @ 59.56 (-600)
11:23:13 Buy 200 @ 59.70 (-400)
11:24:48 Buy 200 @ 59.74 (-200)
11:41:43 Short 100 @ 59.60 (-300)
11:51:08 Short 100 @ 59.89 (-400)
11:58:58 Buy 200 @ 60.27 (-200)
12:02:16 Short 200 @ 60.24 (-400)
12:25:56 Short 100 @ 60.10 (-500)
14:17:30 Buy 100 @ 59.89 (-400)
14:18:32 Buy 200 @ 60.13 (-200)
14:20:14 Buy 100 @ 60.08 (-100)
14:32:13 Short 500 @ 59.83 (-600)
15:30:21 Buy 500 @ 60.45 (-100)
15:32:20 Buy 400 @ 60.48 (300)
15:32:26 Buy 400 @ 60:48 (700)
15:34:18 Sell 300 @ 60.17 (400)
15:34:26 Sell 400 @ 60.16 (flat)

That, my friends, is about as bad as you can get. I was short the stock all day long, practically from the open until the close and all the stock did was go up.

When I did get long, at 15:32:20 it was all about anger and revenge and I paid the price for that too.

Here is a line from a book I am reading:

"Only to the extent that we expose ourselves over and over to annihilation can that which is indestructible be found in us."

The book, incidentally, is not about trading stock, but whatever.

What I feel like after a day like today is that I am making the same mistakes over and over. Kind of like, well, coming apart at the seams on these days. I think it was yesterday that I short stocks all day long while they went up. What am I doing?

I think I am facing a type of annihilation. I am annihilating the trader that I was by recognizing this shit. The next step is correcting the mistakes. Perhaps once this happens I will find those "indestructible" qualities in myself that made me a good trader for all those years. And when I do, perhaps I will undergo some type of rebirth. Or, it's possible that I am killing off the trader in me altogether.

Or, if you're an idiot, you could just say that I suck as a trader, and while currently this "argument" may hold some water, it doesn't get us anywhere, does it?

It may be that I'm in for some period here of self-discovery where I just figure out that trading is not for me anymore. Of course, I can't be sure of that just yet. I'm clearly walking down a new path and I'm not sure where it leads.

But I have some hard realities to face in the coming months which I will be writing about. July is somewhat pivotal for me. When you see me slap up those goddamn Google ads, you'll know that a meteor is clearly heading towards my planet and that a big freaking dust storm is threatening my trading extinction.

When I urge you to click on the ads and put up a little "buy me a beer" widget then you will know that the meteor has hit.

Anyway, for now that is all. As my friend said to me the other day, I'm a "philosophist". I imagine that as I lose more money I will be getting more and more "philosophistal."

Here's the stats:

P&L, -$1544
Best, TNH, $110
Worst, CF, -$1278

shares traded, 8400
stocks traded, 8, 2 positive, 6 negative
total trades, 50

Virtual Office, $2088. Dow, -5.21, 13422.52.

Misstrade, $2267 on 8300 shares traded.
HPT, $1028
Evolution, $357 on 27,600 shares traded.
Denarii, $9 on 1800 shares traded.
OBAT, -$35 on 1600 shares traded.
Me, -$1544 on 8400 shares traded.

F'ed day! (No typo there.)

Anyway, the VO traded it's way to some gains today. Another day, another couple thousand dollars seems to be Misstrade's motto.

And by the way, if you think it's easy running a blog where you post others P&L and they consistently beat the crap out of you, you're wrong, it's not easy. It mostly sucks.

But, I try to stay positive. Good days for most of the players today. A solid bounce for HPT.

The big news is that OBAT is back from his long hiatus. Perhaps he can share a juicy story from his vacation down in the comment section. I'm sure we all have the same questions... Where'd he go? How many women were involved? Those types of things.

Entertain us OBAT, we've all been staring at the screens for too long.

China Is Poisonous

It started with the pet-food. Today it's toothpaste, and last week it was children's toys.

Does anyone else think this is some kind of crazy way to fix the trade imbalance or currency issues?

A negative PR campaign so that Americans are afraid to buy stuff manufactured in China? Heck, most Americans still think Iraq had something to do with 9/11!

So apparently, we'll believe anything if it's repeated a bunch of times.

I'm just spitballing here.

UPDATE: Chinese seafood to be inspected.

OBAT Is Back!

One Bad-Ass Trader is back from one long-ass vacation!

98 cents

This morning, after surfing, I stopped in the bagel shop to get some breakfast.

I ordered a Bacon, Egg and Cheese sandwich with a coffee (milk, no sugar).

I also bought breakfast for my friend and it came to $18.02. I gave the woman a $20 and she gave me $1.98 back. That's a lot of change to have sitting in your pocket. I pretty much decided to hate her then and there. I mean, eat the two fucking cents!

The worst thing is that my sandwich had no bacon on it and my coffee had sugar in it.

This was a sign to me... it was a sign that the rest of my day would suck. Others might have seen it as an early morning bottom, instead it was the beginning of a downtrend for me.

Perhaps this will change. For now, I am taking it easy.

Interesting Editorial

This from the Associate Deputy Attorney General under President Reagan.

The article was written in October of 2006, but with Vice President Cheney claiming that the office of the Vice President is not a part of the executive branch (lol!) and with Bush now refusing the overturn subpoenaed documents, it's pretty clear that they think they're above the law.

I posted it because I think it's good to see someone who served under a Republican president coming out against this administration.

It should be country before party, afterall. On that, we should all be able to agree.

"Sexchanges"

I just wanted to point out the changes made over at Hybridtalk.

When the Hybrid Market rolled out, I basically freaked. For an old school trader like myself who relied on tape-reading and counted on "inside fills", meaning being printed somewhere between the Bid and the Ask it has basically been a nightmare.

In early January, I googled Hybrid Market and along with lots of links about automobiles I also found the Hybridtalk blog run by Ray. To his credit, he has handled lots of criticism there, a real "shoot the messenger" type of situation, with great tact. I know a lot of traders who hate the Hybrid but everyone respects Ray and the work he has done at the blog. Everything I know about the Hybrid Market I learned from that blog. It has been a great resource for me.

They have now rolled out their new blog to reflect their changing business. The official name is Exchanges however I plan on calling it "Sexchanges" for the foreseeable future in order to help drive traffic that way. I hope the NYSE is cool with that, Ray.

Good luck with it and continued success, Ray. Please go pay a visit and welcome it's arrival.

Addendum: Ray, just because I'm blogrolled, don't expect me to stop the Freaky Hybrid Trade Of The Day posts! :)

Wednesday, June 27, 2007

Comments Settings Changed

One quick, but important, note:

I have changed the settings on this blog so that now only those who have a blogger account can leave comments. No more anonymous comments, sorry Gator...

It's easy to set up a blogger account and it will give more personality to the comment section. You don't need to have a blog to set up a blogger account.

Thanks for understanding.

Kimya Dawson, "The Regulator" (Bad Brains Cover)

Good Trades Funded The Bad Trades

I'll admit it, I suck at getting long.

I think that most of my money days these last couple of months (few and far between, I know) have come when the market gets clipped. Right now, (really, since February) I have simply been more comfortable on the short side.

It's a huge limitation and I need to find a way to overcome it.

Traders need to be neutral on the market and be able to move long or short based on the opportunities that they spot. Since I'm chronically looking for shorts I am missing huge longs (see the REITS today) and worse yet, getting squeezed for losses way too often (see the REITS today).

I started off the day with a big bang, shorting TNH at 129.27 and 129.84. I covered 100 at 126.54 and the last 100 at 123.68. That was at 10:20. This was also the same time that I was covering my short in FSLR. I short 300 at 87.79 and covered at 86.80, 86.08 and 85.48. So, these trades alone along with a couple of smaller winners and no notable losers probably had me up close to $2000 by 10:30.





That's when I started pissing it all away shorting stocks while the futures moved steadily higher.

I lost money shorting VNO, POT, ALB, and VMC. But even my longs weren't working! I lost money getting long AG, CNH and OMG. It was very frustrating.

The one that hurt the most, mentally and financially was VNO.



I was looking at the lows from yesterday, 107.75 or so as a place where I thought the stock would meet with some resistance. So I started shorting around 107.50. You can see from the graph why this position was bound to fail.

So far this is my biggest problem with the new "system". Yes, it allows me to let my winners run more, but I haven't figured out how to limit my losers yet. I guess I need to continue to work on my entry points.

Perhaps I shouldn't have been shorting anything, but between 10 and 11 when I was entering this short position, the market wasn't up much and the TRIN was neutral to bearish... given the recent activity a reversal lower was a real possibility, especially with the leaders all being taken down this morning.

Anyway, on the bright side, I covered around 108.40 which, in retrospect, isn't awful. And, better yet, I didn't try to "get revenge" in the stock by churning it on the short side all day.

If I can continue to make money on "bad days" I'll be happy. For now, my mental state is slowly improving. I need to be careful these next two days not to "let go" and take a big hit. Small gains bring big confidence. It's important for me to get back in the habit of making money everyday, even if it's just $144.

Here's the stats:

P&L,
$144
Best, TNH,
$887
Worst, VNO,
-$377

shares traded, 16,200
stocks traded, 15, 6 positive, 9 negative
total trades, 89 (this number goes down everyday lately, which is good)

Virtual Office, -$3781. Dow, +90.07, 13427.73.

Misstrade, $6016 on 8800 shares traded.
Me, $144 on 16,200 shares traded.
Evolution, $59 on 24,200 shares traded.
Denarii, No trades.
HPT, -$10,000 on 128 contracts.

Well, well, well, the market ripped! And, for a change, the rip came on decent volume.

Speaking of ripping, nice number for MT today. And while the rest of us caught a case of the blahs, HPT got a little smoked. Check over at his site for the details.

Anyway, Fed day tomorrow plus a good amount of ecodata on Friday. Could be an interesting end to the week. Besides those economic events, the end of the week, month and quarter is upon us. And, to make things even more juicy, next week the market will be deader than a rock.

So you can expect people to tie up loose ends these next two days.

"I Could've Been A Contender"

It's been a frustrating reversal day for the Dinosaur.

Shooting The Market Leaders

As I've been pointing out the last few days in the VO, the market action is somewhat worrying. Actually for the last few weeks we've been rallying on light volume and pulling back on heavier volume. Still, the indexes are not far from their recent highs.

Nonetheless, I said I'd begin to worry when they started selling the leaders. And today, you can see some good examples of the recent leaders getting taken out, most notable among them right now CROX and TNH. Actually, they're killing all the fertilizers today, TNH, POT and CF.

Misstrade has a great post on this phenomenon here.

Grandaddy, "Pull The Curtains"

Tuesday, June 26, 2007

The Beatles, "Rain"

We need some rain to kill this humidity. And, on a related note, soon you may need an umbrella to head into the market as well.

Either way, there will be ways to make money.

Actually, and I know this is debatable, I think this song is about the stock market. Just kidding. But you could apply it.

Trading Stock

A simple post title because it was a simple day of trading. No over thinking, no churning, just some buys and then some sells.

I lost money today when I was stubborn and fought the market. My worst stock of the day was LNN, I lost $118 in him on a 200 share long position.



I bought 200 shares at 10:00 this morning at 43.14. This was really a mistake because the market was trading down at this time. I bought it because I'm very bullish on the stock longer term and I let it effect my daytrading. This is almost always a mistake.

That said, I love the pullback from the highs on lower volume. The next strong day in the market will probably see this stock trade north of 44 again. Still, I should have respected the market weakness today and not made this trade. At least I limited my mistake to one trade in the stock.

In fact, my four worst losers of the day were each traded only once. This is a huge departure from my losers of the recent past. Back when I was churning and habitually overtrading, my worst stocks of the day were almost always the stock I traded the most. This is a positive development.

My best stock of the day was TNH. I almost referred to him as "my old buddy" but then I remember that in the stock market you have no "friends".



Here are my trades:

9:58:08 Short 100 @ 130.93 (-100)
10:28:25 Buy 100 @ 126.89 (flat)
10:29:13 Short 100 @ 128.15 (-100)
10:30:47 Short 200 @ 129.44 (-300)
10:36:27 Buy 300 @ 128.80 (flat)
10:37:17 Short 100 @ 129.68 (-100)
10:38:50 Buy 100 @ 131.20 (flat)
10:53:20 Short 100 @ 129.25 (-100)
11:28:05 Buy 100 @ 129.75 (flat)
14:23:31 Short 100 @ 131 (-100)
14:45:49 Short 100 @ 130.17 (-200)
14:48:12 Buy 100 @ 129.72 (-100)
15:55:22 Buy 100 @ 130.80 (flat)

As you can see, I made one good trade in the stock all day, my first. After that, I basically broke even in the stock. I'm lucky I did, because the stock was up 5 points on the day. So while this was my best stock, netting me $322, I made a lot of trading mistakes in it today. Still, I was careful in my trades, so bonus points for that.

Other than those two, I had good trades shorting CNH, UBB and VMC. I had no bad losers.

I find that a hallmark of my good days is completely controlling my losers. Sounds obvious, but I wanted to write it down here so I would remember it.

Only 3 more trading days of the month. I'm up a little and I would love to build on it. Let's hope for some more volatility. So far, so good with this more efficient method.

Here's the stats:

P&L, $611
Best, TNH, $322
Worst, LNN, -$118

shares traded, 13,200
stocks traded, 16, 9 winners, 7 losers
total trades, 85

Virtual Office, $5138. Dow, -14.31, 13337.74.

HPT, $2147 on 95 contracts and 2700 shares traded.
Misstrade, $1792 on 4500 shares traded.
Me, $611 on 13,200 shares traded.
Evolution, $588 on 55,200 shares traded.

Another bearish reversal for the major indexes. While none showed major losses, I would keep an eye on the stocks that have been leading this rally since March. Should they show signs of distribution, I would begin to worry about the continued health of this rally.

As for trade today, the VO had a nice day despite the overall choppiness of the market.

My daily post will have to come later this evening as I am busy immediately after the close.

Freaky Hybrid Trade Of The Day

WE HAVE A WINNER!



Should news come out, I'll take back the award... But for now, it just looks like a crazy spike.

Get Rid Of Your Junk Mail

I'm sick of getting crap I don't want in the mailbox everyday.

You can get rid of it.

Too Damn Hot To Trade

Sitting in this small room, with my 4 screens and a TV when it is hot and humid outside is no green bar on a stock chart, I will tell you that.

I could turn the AC on, but I'm currently poor and choose to save the $10 it would cost me to cool my house today. I will save that $10 and use it this evening, when I want a nice, cool sleep.

Anyway, I went outside and mowed my damn lawn with my Brill Luxus mower. Believe me when I tell you that this mower makes mowing the lawn less a chore and more a pleasure. No fumes, no dust, just the soft whirring sound of grass blades getting cleanly cut. It is ideal for those with a small, level lawn. In an ideal world though, I would have no lawn. I hate it.

My daughter calls it a "Mawnlower".

Here's what we need now to kill this humidity.



UPDATE: I just turned on the AC at 2:11. I couldn't take it. The heat and the Monster Java I tried this morning were making me hallucinate.

TRIN v. TICKS

I'm going to use the TRIN today instead of the TICKS to try and gauge short term moves.

On Briefing, they give the following guidelines

TRIN reading:
.65 or lower, very bullish
.65-.90 bullish
.90-1.1 neutral
1.1-1.35 bearish
1.35 or above very bearish

Does anyone out there use this indicator and concur or disagree with these general levels?

Monday, June 25, 2007

Panda Bear, "Bros"

Silver Linings

Yes, I lost money today but I'm going to focus on my good trades for a change.

My bad trades were not good, but they weren't bad in the way they used to be bad. In the past, when I had a big loser, it was normally because I was in and out churning the stock all day. Today, my worst stock was CF and the losses came in two trades. So, while I didn't trade the stock well, there was no fighting the stock or revenge trades... I'll take the $523 in losses and learn from them.

So on to the good stuff.



At around 11am, I noticed MLM break it's opening range from the morning. So I took a look at VMC, a related stock to see how it was acting. It was struggling to regain it's highs. I threw in a short order and was filled at 118.84. Only 300 shares. I covered 100 at 118.11, 100 at 116.32 and 100 at 116, netting just over $600.

This was a good trade for me because I didn't rush to take my profits. After I covered the first 100 shares (which as happens now, I realized was a mistake) I trailed the stock down with stops. It moved nice and smoothly. What I could have done better was add to the position.

My next good trade was in FLR which I highlighted earlier. After that lunatic plunge I began to watch the stock. My first hint that something was wrong with the stock was that buyers didn't rush in to pick up the relative "bargain". After the initial steep sell-off just after 11am the stock couldn't regain it's footing.

I watched it chop around 104 the whole time that the futures were rising. Once the futures started to break, I put in a short order and was filled around 104 for 300 shares. Once it dropped a bit, I added to the short, another 400 shares at about 103.65. This was a good thing that I failed to do in my VMC short.

Anyway, I covered most of the short under 103 making this my second best trade of the day at $585.

The thing that really hit home today was that I could have good winners with not many shares if I let them run. So tomorrow, I am going to initiate my positions with less size and add when they work in my favor. My old way of trading saw me buying most of my shares right off the bat. Since I'm allowing myself greater movement in the stock before I cover I need to work on position sizing so that when I'm wrong (like in CF) I don't take big hits.

Here's the stats:

P&L, -$603
Best, VMC, $606
Worst, CF, -$523

shares traded, 32,000
stocks traded, 28, 10 winners, 18 losers
total trades, 165

Virtual Office, $5925. Dow, -8.05, 13352.13.

Misstrade, $3560 on 5500 shares traded.
HPT, $1638 on 75 contracts & 4100 shares traded.
Evolution, $733 on 13,400 shares traded.
Denarii, $598 on 2800 shares traded.
Me, -$604 on 32,000 shares traded.

If you just looked at the final figure for the Dow today, you wouldn't be getting the full story of the market. The market suffered a complete reversal today and at one point was down almost 200 points from it's top. In other words, it was an ugly day to be a bull.

Nevertheless, despite the woes of the market, the VO managed to have a pretty good day. Misstrade tacked on some more gains while ET and HPT kept up their recent streaks. Only 13,400 shares today ET? Perhaps the market took your reluctance to trade as a bearish indicator. Denarii also had a nice day.

On the downside, I had a couple of good trades, a couple of bad trades and 2 mistakes that really cost me.

The Amazing Fish Pen

Wow...

Sometimes humor comes at you from the strangest places.



Think Dylan Ratigan has a fish pen? No doubt!

Google Blogsearch

Just in case you have never used it, Google Blogsearch is the best way to search inside of blogs.

Oh, and Dylan Ratigan.

You may ask, why is Dinosaur Trader suddenly so obsessed with Dylan Ratigan? I tell you what, lots of people search for this man on Google and this blog has become sort of a niche marketplace to come and find nothing about the man at all. And my female readership is spiking, just look at this graph.... see?

This is good, because so far I find girls leave much more thoughtful comments.

People come searching for Dylan Ratigan and they leave with some Dinosaur.

HOKU, WTF?

A reader, Bluedog, pointed this stock out to me. I see no news...

However, they seem to be in a good industry. They operate in "clean energy technologies." Still, the run since mid-June is crazy. Anyone have any color on this stock, please leave it in the comment section.



Time to leg into a short here, MT?

UPDATE: Stockbee has a small post on the price action that's interesting.

Freaky Hybrid Trade Of The Day! TNH!



According to my tape, at 12:04:27, TNH traded from 125.92 up to 127.06 in the same SECOND!

Honorable mention today goes to FLR!



The market may be getting faster, but that doesn't necessarily mean it's getting BETTER...

Birds In Decline

Dinosaurs hate watching things go extinct.

Check this list of birds that are in decline. Can you imagine waking up and not hearing birds? It would depress the hell out of me.

Anyway, before you remove that tree or spray that pesticide, please think twice.

The Day After The Russell Rebalancing

I expect this week to be somewhat dull. Next week should be completely dead.

However, at least this morning there could be some interesting follow through in the names that moved most on Friday's Russell Rebalancing.

Other than that, we have the existing home sales number at 10. May be worth it to watch the interest-rate sensitive names, especially REITS.

We'll see. Anyway, here's a great song from a Scottish band.

Sunday, June 24, 2007

"This Is My Masturbatorium"

We watched Running With Scissors last night and... completely hated it. Annette Bening was really good and the music was decent though. And this one scene was funny and pretty random.

Saturday, June 23, 2007

"Don't Be High When You're Buying And Selling Stock"

Liberal Media My Ass

Check the link here... the whole myth about the media being slanted leftwards should be pretty much debunked by now.

Seu Jorge, "Rebel, Rebel" (David Bowie Cover)

Here's some relaxing surfing footage to watch. Watching those guys surf the huge waves with the jet-skis pulling them out is fine, but this type of surfing is much more real and accessible. Besides, if you fall you won't get your skull crushed.

Friday, June 22, 2007

Janis Joplin, "Summertime"

Enjoy this, the first weekend of the summer!

Thanks Russell!

I won't lie to you, I freaked out today.

And that despite my mellow morning in the sun and the surf.

I rushed back from the beach and due to my enthusiasm to get started, sat naked, that's right, naked in my office chair as I compiled a whole new quote screen to devote to the Russell Rebalancing. Could I have done that yesterday, or even, (gasp) the day before? Yes. But then I wouldn't have had the excuse to sit naked in my office chair.

My daughter was the first to state the obvious...

She: "Daddy, you naked?"

Me: "Yes, Daddy is naked."

She: "Daddy, you working naked? That's silly! (laughter)"

Me: "Go eat some breakfast with Mommy. JUDY! What the fuck! I told you I'd be busy today!"

Anyway, so I noticed, when going through the Rebalancing list which I posted links to here a few times that a lot of the insurers I like to trade were being added. Among them, RE, PRE, ENH, and AXS. There were more insurers, but those are the ones I typically trade. I also found a few stocks that I had never traded before but were at good prices and near highs. Among them, AWH, AYR, RRR, and LBY. There was also CPA a stock I trade occasionally.

So after the first 15 minutes passed, I bought small positions in each of them and sticking with my new "style" I planned on holding them. Unfortunately, every single stock dropped pretty rapidly. Not one of them made the holding part easy... on top of this, I got jacked in SPG and VNO. Then I lost in CF and MOS. It was, in a word, a bloodbath.

Things settled down and all of the stocks I mentioned that were on my Russell list dropped into ranges. I bought more in these ranges, throughout the day. Besides these adds, I had 3 winning trades in TNH and I net about $750 in them. So that helped my mental state, but not too much because I was still down significantly, probably a few thousand dollars.

This is how things went when the first imbalance was reported at 3:30.

It was in CAI, a stock that was not on any list I could find. I thought this was interesting. Because no other imbalances were coming out I was able to watch CAI trade. It spiked up quickly, like a hybrid trade, and then settled down. This gave me a good plan on what to do with my positions. I added aggressively and then put sell limits 30-70 cents above where the market was trading.

All of a sudden, the insurers began to spike.






Which was great. I took a lot of the profits on the way up, only holding 400 or 500 shares into the actual imbalance.

But the one that worked best for me was CPA simply because I had built up a good position in him throughout the day. Early, he was one of my worst losers but I was able to hold and get out of 1000 shares near to top of the move. I had placed sell limits at 65.50.



And that was the day. There were a couple of names on the list, LBY and RRR that I had big positions in (2000 shares each) and had to take losses on because they didn't have buy imbalances. Actually, LBY had a sell imbalance! And another that failed me was ARWR, a "fly" stock. He too had a sell imbalance despite being added to the Russell Micro index. I took a decent loss on him.

But overall, the Rebalancing net me close to $5,000. It was a tough one to sweat out with the market acting like it did today, but it worked out.

And if you read this blog daily, you know how thankful I am right now for green days.

Oh, and a tip of the hat to Ray over at Hybridtalk for doing such a great job getting the information about the rebalancing out. Perhaps I won't need you to pass my resume around after all!

Anyway, here's the stats:

P&L,
$1736
Best, CPA, $1021
Worst, LNN,
-$578

shares traded, 42,400
stocks traded, 19, 9 positive, 10 negative
total trades, 151

Virtual Office, $3253. Dow, -185.58, 13360.26.

Me, $1736 on 42,400 shares traded.
Evolution, $904 on 44,400 shares traded.
HPT, $569 on 28 contracts traded.
Misstrade, $42 on 1000 shares traded.
Denarii, $2 on 800 shares traded.

Well, it was a crazy freaking day if you stuck your toe in the waters today.

Everything basically got slammed but from the ashes of the market rose the VO. We all finished in the green.

I have smart Russell Rebalancing strategy to thank for my gains today. I was getting hit all day until my insurers started to move. Evolution is on a little streak which is nice to see after the rough patch he hit for awhile. He attributes his new found success to "taking profits" instead of looking for big trades. Sounds like scalping ET, don't tell Misstrade. HPT traded for 30 minutes and walked away with a nice gain for the weekend.

Misstrade and Denarii took it easy.

Have a great weekend everyone. Mine will be spent at like, 4 different children's birthday parties.

Free beer.

Dinosaur Trader Quiz

Which of these entities lost large sums of money today?

I) Cantor Fitzgerald
II) Bear Sterns
III) Barclay's
IV) Dinosaur Trader

Answers:

A) I and II
B) I, II, and III
C) all of the above
D) Dylan Ratigan

Please post your answers in the comment section.

UPDATE: The answer is "B"

Becoming A Buddhist Monk

So, do I just walk into a monastery and tell them I want to be a monk? Are they forced by the edicts of their religion to take me in and feed me?

Also, even if my wife and daughter don't want to be monks, I'm thinking they'd feed them too, right?

I'm just brainstorming now for when the money finally dries up for good.

(BTW, I put this under the label "Dylan Ratigan" just to fuck with him should he ever come across this site. Hey, remember that time you grew your beard out? HAHAHA!)

SPG Smacked Me Good



I got short right around 95.30. Put my stop at 96.20, was stopped out at 96.25, or, the high of the day... right before he tanked.

Shit like this kills me.

Russell Rebalancing 2007

One last post on the rebalancing... this I pulled from a newswire.

The annual Russell Indexes Reconstitution will take place today. Typically this is
one of the largest volume days of the year and there can be excess volatility as
a result, particularly in low average volume stocks. In the Russell 3000, there
are 275 stocks being added this year while 175 stocks are being deleted. One new
twist this year is that companies designated BDI (Benefits Driven Incorporations)
will be eligible for inclusion in the Russell Indexes for the first time. Some of
these large cap names are familiar members of other indexes (TYC, ACN, ACE, IR,
GRMN, XL, STX, MRVL, NBR, RE, AXS, ACGL, PRE, WCRX, RNR, TK). BDI names being added to the Russell Microcap Index include (ASI, ATB, CPHL, CRMH, MCX, PRS, PXT, QNTA, RAMR, SCT, TBSI, VLCCF, WPL).
I noticed loads of insurers being added... but anyway, be careful if you choose to mess with this. Some guy from my company blew up BIGTIME trading this a few years back. If you have a heart condition wait until Monday to trade these names...

UPDATE: The "block quote" feature on Blogger clearly sucks.

Odd Nosdam, "The Kill Tone Two"

Man... what a beautiful break in this song at 1:18. I could listen to it over and over.

The Hamptons

Just in case you're one of the pricks who will be driving their hot car too fast in the Hamptons this weekend, here's a little clip of Borat making fun of people like you. Well, not really. Honestly, he could do much better with the Hamptons.

The Jam, "That's Entertainment"

The Russell Rebalancing will at least be entertaining. Get ready for some crazy prints!



A tip of the hat to Misstrade for pointing out this song. He's good with the older stuff... oh snap!

Russell Rebalancing

FYI, here is the link to the memo with the additions and deletions.

Thursday, June 21, 2007

Pavement, "Summer Babe"

It's the first day of summer you silly bitches!



Pavement, Pixes, Fugazi... what would high school have been without these bands?

I Hate Toddlers... Not Really

I'm just in a bad mood from my crappy trading today and would rather vent right now then be peed upon by some potty-training, whining kid. I love kids though. Really.

Anyway, here's what happened today. I simply didn't know what to do!

The whole thing is that I was to trade with more patience. So when I was largely short at 10:00am, and in the money in most of my positions, (MOS, AGU, DE, MLM, GWW, LNN) I was ambivalent about covering and taking the gains. I wanted to take the money, but at the same time, I didn't want to take the money and then see them break to new lows thereby proving that I was trading impulsively, without thought and without a "plan".

So, I held and I lost money.

Not a lot at that point. I lost about $70 in AGU, $70 in MLM, $80 in DE and $200 in GWW. Not a good start, but not a disaster either. I had 100 shares overnight of LNN still and that was up a couple of points to offset some of those losses.

However, because I knew I had losses in my shorts, I made a related mistake and quickly covered my gain in LNN to "lock in" at least those gains... I sold my LNN around 41. It closed at 44.50 off the highs at 46.50, so I left a lot of easy money on the table there.

So now I'm down on the day a little and watching the market spike up. After the sell-off into the close yesterday and then the weak opening I was bearish. I was not aware of this bias however but it is clear now looking back on my trades from the day that this bias messed with my head.

I kept getting short during each pullback and kept buying my shares back at higher prices...

My big ugly loser of the day was in.... TNH! My old buddy, what happened?



Well, take a look at that chart. How could you lose money in TNH today? You could be short. I was short and that, in a word, was STUPID.

No trading system can save you from yourself.

I lost $828 in TNH so it made up the lion's share of my losses today. Not going to over-analyze it. It's obvious the mistake I made... I was shorting a stock that closed up over 10 points on the day!

Anyway, I'm going to keep my chin up. I made some mistakes today trading with my new style. I also learned that if the market isn't trending cleanly that it is much more difficult to hold stocks.

Actually, I also made some churny trades... I will continue to work on my discipline to stop making those trades...

Looking forward to the Russell Rebalancing tomorrow. Should be interesting at least. That's all you can ask for on the first official Friday of the summer!

Here's the stats:

P&L,
-$1302
Best, VNO, $394
Worst, TNH, -$828

shares traded, 28,800
stocks traded, 11, 3 positive, 8 negative
total trades, 130 (way too many)

Virtual Office, -$734. Dow, +57.64, 13547.06.

HPT, $1112 on 73 contracts traded.
Evolution, $784 on 48,700 shares traded.
Denarii, -$148 on 2400 shares traded.
Misstrade, -$1180 on 4600 shares traded.
Me, -$1302 on 28,800 shares traded.

I blame the AMEX.

Anyway, after a blowout day for the VO yesterday, today we took a little hit.

Today was a day for the scalpers... this I learned at 10:00am when the market reversed and I was slow to cover my shorts. Reversal days are always good for the quick and nimble.

Anyway, kudos to HPT and ET for a strong showing today. And before you shed a tear for Misstrade, you should know he did okay today in his futures trades.

My daily post will be late tonight. I will try hard to get it on the site but no guarantees. Today is our turn to have the house overrun with toddlers. Screaming 2 and 3 year old kids after a day like today?

Thank goodness I have a good sense of humor...

AMEX Halting Trading Again... WTF?

Really, haven't they figured out this whole "computer" thing there yet?

2 days in a row. Gives you great confidence in that market, huh?

UPDATE: They're up and running again... took them 3 hours to "reboot" I guess!

Lindsay Manufacturing, LNN- Holy Short Squeeze Batman!

Well, I sold my last 100 shares of my 400 share long position at 41. The stock is now over 45, so I left a good amount of easy money on the table.

I sold because when the market ripped at 10:00am the stock flatlined. I got skittish and thought he might take a breather because it had such a strong run yesterday. Anyway, almost immediately after I sold it began it's ascent.

That's some run. Really, thanks to "the Fly" for the call. I believe he started buying at 31.50.

I owe that insect a cup of coffee.

"I'm Rick James, Bitch!" (Parts 2 & 3)

The video quality is poor, but still, it's hilarious.

"I'm Rick James, Bitch!" (Part 1)

You know, it's a slow day... might as well have some fun.

Coconut Records, "West Coast"

I got chopped early when the market ripped up at 10 because I was short and slow to cover. I was trying to be "patient" but instead I got my face ripped off.

We'll see what happens today. LNN on fire! I sold my shares in my trading account at 41 today. Thank goodness I'm still holding in my longer term account or I'd be angry with myself.

Here's a song that you won't be able to stop listening too. I featured the video before...

You can always find more excellent music videos by clicking the "music video" link over there to the right... things are logical like that around here.

Investor's Business Daily, Big Picture

Made a really great point today about the general market conditions.

Despite some of the large drops we've seen in the last couple of weeks on higher volume, like yesterday, the leading stocks of this rally are really holding up.

If the leaders start selling hard, THEN it may be time to worry.

Just a thought.

Animal Collective, "Slippi"

A good song to start anything, especially a day.

Wednesday, June 20, 2007

The Minutemen, "Corona"

Now that I'm surfing again, I can post all my favorites from when I used to surf!

Maybe We're Onto Something Here

I couldn't tell you the last time I traded and nearly made 50 cents for every share I traded... it's been a long while. I felt like Misstrade out there! Was it the surfing, the new trading style, or HPT joining the VO? We may never know for sure...

Anyway, the day started off with a bang as LNN reported excellent numbers and gapped up a couple of points. I stayed long 400 overnight into the earnings report.



It was my best stock of the day as I net $1281 in him.

My next best stock was AGU.



After the stock ran to new highs around 11am, it pulled back sharply. The reaction bounce at around 11:30 couldn't bring the stock to new highs, so I began to short. I short 400 at 44.80 and then 200 more at 44.77. And then I had to be patient.

I covered 100 shares at 12:16 at the price of 44.42 and was immediately angry with myself. The market was feeling weak, other AG names were showing signs of weakness and I knew I should have just held.

My next cover came at 1:38, 200 shares at 44.15. While in retrospect this too was an early cover, I didn't think it was too bad because the stock hit the figure and bounced sharply. Also, at that point, the futures looked to be improving.

I covered the last couple hundred shares very near the close, around 43.60. So this was a trade that I was in for 6 hours. That's a very long hold for this trader. I net $453 in AGU.

Anyway, I had similar trades in CF and DE netting about the same. Both trades were shorts and in both case I again didn't jump to cover. In short, I made good trades in the names.

It has always helped me when an entire group of stocks is acting strong or weak. Today, the entire group of AG names started acting weak at about the same time. Check charts of POT, TNH, CF, DE, CNH, AG and MOS. There was a lot of money to be made in a sector trade here today. When my confidence builds again, trades like that can be month-makers. Patience...

Anyway, I had one other good trade today in BEN. I caught a 4 point drop between 1 and 4pm. The only bad news about this trade is that I only had 100 shares. I had limits for more above where I got the 100 shares off but they were never hit. Still, I was very happy that I didn't cover into the spike-down at 3pm. I could have, but I decided instead to see if it would run further. It did and I made an extra $100 because of that patience.



As important as my winners were today it's worth noting that my biggest loser was for -$36 in AB. Also important was my winner to loser ratio, 8 winners and 2 losers.

So while LNN started my day off with a bang, it was less than half of my total gains. I simply traded well today and I hope I can keep it up tomorrow.

Anyway, here's the stats:

P&L, $2977
Best, LNN, $1281
Worst, AB, -$36

shares traded, 7000
stocks traded, 10, 8 positive, 2 negative
total trades, 55

Virtual Office, $8982. Dow, -146.73, 13488.69.

Misstrade, $4410 on 9500 shares traded.
Me, $2977 on 7000 shares traded.
HPT, $1006 on 36 contracts and 200 shares traded.
Evolution, $589 on 61,400 shares traded.

Crappy day for the market, excellent day for the VO.

Misstrade turned some shit (fertilizer joke, stay with me people) into money with a nice short in TNH. Keeping with the agricultural theme, I had a nice gainer with LNN which I held overnight into the earnings gap-up.

HPT had a solid day and even slummed it in the stock market for a trade. ET, went on a trading binge... ET buddy, you're overtrading! HAHAHA!

Anyway, another heavy volume loss for the market. Recently, the market shrugs off these losses with bigger gains. Kind of like the whole, "Hey, they knocked down the towers now we're just gonna build them BIGGER" mentality. Let's see if it works again.

My daily post and music video will have to come later this evening as I am busy immediately after the close.

Tick Bombs

They make me skittish. And really, with this new method of trading I am using I'm thinking about just removing that indicator from my screen entirely.

The ticks shoot up to 850 and I think, "well, maybe it's time to cover the shorts" and then a second later, they're -600.

More static than anything really...

Speech About Blogging, American Politics

Whatever your political opinions may be, I thought this speech was worth posting just based on what she says about blogging and about how the media has let us down in the last decade.

Blogging, in whatever form it takes, is here to stay. And I think that's a very good thing.

Boredom And LNN, Lindsay Manufacturing

Well, I had another nice morning of surf and then I hit the screens. I was relieved to see the favorable earnings report put up by LNN. I held 400 shares into the report and the gap up helped my mood a lot!

There is a gigantic short interest in this stock which was first pointed out to me by "the Fly". And of course, there was the Wallstrip episode.



I added to my position on the pullback this morning and then sold those shares during the conference call, which was short and sweet.

A couple of things I picked up from the call:

-declining steel prices help Lindsay
-positive economic conditions for farmers help Lindsay

Should be fun to watch the next few months.

Anyway, so I've stuck to the new trading style today. One problem I'm encountering is extreme boredom. I'm a trader, but really, I'd rather be out watching birds, reading books or playing with my daughter. Since I'm not trading a gajillion shares a day anymore I find I'm losing focus. This is something I'll have to work on. I guess I can use the new free time to scan charts and look for setups, but man, it's boring!

And yes, Woodshedder, I checked the link about trade setups you provided the other day in the comments section. Much appreciated, thanks!

Tuesday, June 19, 2007

The Go! Team, "Grip Like A Vice"

A New Approach, But... Not Really

At 9:30am I slipped the Skygreen Leopards into my disc drive, leaned back in my chair and watched my screens blink madly at me. I imagined them angry at me for not engaging them. They must have wondered why I wasn't cursing at them.

But I was impassive and watched CNH with a bit of amusement as I imagined all the traders who got their balls ripped off in him trading the open. It made me feel smart. What a freaking lunatic!



For my first trade of the day, I shorted 100 shares of AMG at 129.73, this was at 9:46. As you can see, I didn't have to endure much pain in this trade, it worked in my favor almost immediately. I only threw in 100 shares because although it looked short term overbought I thought it possible he may get all the way up to 131 and I didn't want to risk too much right off the bat.



Anyway, I covered at 10:00 at 128.57. I'm still not sure if I should have. I mean, the first big question I need to answer about this new style is whether or not I should actively cover, trail stops down, or just leave my original stop in. In this case, ultimately, the stock went lower on the day.

It's already late so I can't get into everything about my day (I'm waking super early again tomorrow) but there were a couple of other trades that bothered me and that I didn't handle well.

The first was SPG which was my biggest winner of the day.



I bought 500 at 96.13 and figured if I put my stops just below the low of the day that I'd be risking about a half point. On the daily this stock has been crushed because it's a REIT and I guess it sold off with the rising interest rates. Anyway, I sold out early. 100 shares at 96.18, 200 at 96.37, and 200 at 96.85. But all of these were nervous sells. I mean, I was never as much as a dime out of the money on the trade but I was nervous whenever the market looked like it was weakening and sold really, because I was scared to lose.

It gets worse. Check out this beautiful graph for AB.



At 11:24 I bought 300 shares at 85.10 just before the breakout... right before the stock ripped straight up for 3 points. But guess when I sold... at 11:28 at 85.18. I really wanted to lock that 8 cent gain in... awful.

Finally, I get to my big loser on the day, CF. I short 500 shares at 56.50 at 2:20. When it broke the lows from 12:30, I thought it could break and follow the downward path that TNH, another fertilizer stock, was tracing. Anyway, 2:20 was basically the afternoon low on the S&P and the stock followed the futures up and squeezed me out at 57.15 for a $300 loser.



So anyway, I lost money. But I realized something that explains the title of this post. The way I've been trading for the past few months is just wrong. Everyone who has told me I was overtrading was exactly right. I am churning positions when I really don't need to.

I picked some good stocks today and had I let them run instead of getting nervous and covering, I would have made good money. I think it's a matter of readjusting and regaining confidence that I am actually buying stocks at decent levels. I mean, my entries weren't the big problem for me today, it was my exits.

It's the old rule, "Let your winners run".

What I realize is that this isn't really a huge change to my trading style. It's just calming it down... a lot. I don't need to reinvent the wheel, I just need to let the old wheel roll a bit and gain momentum and maybe it won't fall over so much... it's late and I'm going to let that corniness about the wheel slide. Hopefully you understand what I mean.

Oh, and GO LNN! Beat and raise! Beat and raise! Please! I held into earnings.

Anyway, here's the stats:

P&L, -$102
Best, SPG, $193
Worst, CF, -$297

shares traded, 9600 (about a third or a quarter of a "normal" day for me)
stocks traded, 9. 4 positive, 5 negative.
total trades, 78