If you've been reading along, then you know that there was a long dry spell that I endured prior to this recent flush of success. In fact, the start of this blog (in March) coincided directly with my first ever negative month of trading. So if you've been here since the beginning, you haven't known me to be successful yet.
Let me tell you, it hasn't been easy.
At the end of May, I wrote a depressing post about working in a gray cubicle again...
At the end of June, I was more or less at the end of my rope and I declared July to be a pivotal month. For the record, I still like the word "Philosophistal."
As of last Monday, I was still down a few thousand dollars for the month. Never would I have guessed that the market was about to freak out and that I would finally get my shit together all at the same time. As it stands, I ended up pulling over $20,000 net out of the market in the last week. That's double what I had made for the first 6 months of the entire year.
I think that the number one thing that helped me get my game back on track (besides the market freaking out) was talking with my risk manager. Setting a tight loss-limit on my account each day freed me up from worrying about losing money and made me focus more on making money.
But there have been many other things as well that I've come across in these last 6 months which have helped me get my trading back on track. Perhaps I'll have time to reflect upon and write about them when I take off the last couple weeks of August. For one, I have benefited greatly from the traders who read and comment on this site. Were it not for me stumbling across Ray's blog in February I may have never found the Scalper's blog, and I may have never started this blog. And this blog has been a great tool of professional reflection for me.
Also it goes without saying that any trader in a slump needs strong support from his or her family. My family has been great.
Anyway, so July was in fact a pivotal month and for now, I can stop working on my resume and focus on hitting the market again. Like I said last week, I'm not declaring victory over "the slump" just yet. I'm sure I'll have bad days again. However, after getting through these last months I realize that what Bob Dylan said is true, "they say the darkest hour is right before the dawn."
Thanks for reading.
Tuesday, July 31, 2007
If you've been reading along, then you know that there was a long dry spell that I endured prior to this recent flush of success. In fact, the start of this blog (in March) coincided directly with my first ever negative month of trading. So if you've been here since the beginning, you haven't known me to be successful yet.
As I discussed in the Virtual Office link, the market is currently in meltdown mode.
If you are a daytrader or a swing trader it doesn't really matter why the market is melting down, you're just happy to see some volatility again.
But I have to say, while I had a nice day, the morning completely sucked and I gave back a good chunk of change when it looked like the market was going to bounce at around 2:45.
If you haven't noticed, 2:45 is a very important time... Everyday, at 2:45 the market moves and I don't know why. If someone does know, please fill us all in via the "comments" section.
So it was a wild day of trading with big gains but also big losses. Such is trading when the stock market is a volatile beast.
My best stock of the day was AG.
I got short at 10:21 when it looked like the market was weakening and the stock couldn't recapture the highs of the morning. It worked out to be the perfect time but unfortunately, I covered most of the shares somewhat early, in the mid $38 level. The rest I covered just around $37.50. I made over $1200 in the stock.
My second best stock, ITU, was at one point, a huge winner for me that I gave a lot of money back on during the 2:45 squeeze.
At around 1:45 I noticed that UBB another large Latin American bank stock, was getting smacked around. I took a look at ITU and saw it still trading up. With the market just beginning to melt, I started getting short. I got heavily short (for me) and sold about 2500 shares between $47 and $46.80. The stock dropped quickly to $46.50 and then bounced back up to the $46.80 level. Then, it dropped hard to the "unched" level on the day. I covered some here, but not enough and the stock ripped back over $46.50. This is where I screwed up, covering most of my position.
In retrospect, this was a boneheaded move. The problem was that I had a lot of trades on and at that particular time, I was getting squeezed in most of them. I didn't even take a look at the chart... I just covered and made only a little on my initial trade. The stock dropped from here on out, and I got short again, but with a smaller position.
My worst trade of the day deserves a little attention because it had me getting back into a very bad trading habit, revenge trading.
I bought VNO at the open on the strength of all the "interest rate sensitive" names however, I never got a report back from the NYSE. The stock traded up over $107 but then back down to $106.75. I called my company to get some report and they said the NYSE was just crazed and not getting all reports back quickly. True story. Anyway, they called down while I waited on hold and got my report. When I got the report, I immediately sold at $106.80 and lost the 20 cents on my 400 share purchase. No big deal.
However, take a look at that next 5-minute bar... the stock spiked up to $110! Man was I pissed! So, what'd I do? I bought... and the stock plummeted down to $108. I churned the stock for the next half hour, angrily, sometimes making and sometimes losing but always trading angry. I lost over $300 in the stock before I realized that I was trading like a drunk and took the stock off my screen.
We will see what tomorrow brings. I'd love for you to share your stories on the day. Feel free to fill us in via the comment section. Days like today are fun to talk about.
Here's the stats:
Best, AG, $1241
Worst, VNO, -$301
shares traded, 99,600
30 stocks traded, 19 winners, 11 losers
354 total trades
Me, $6147 on 99,600 shares traded.
Evolution, $390 on 52,000 shares traded.
Bubs, $102 on 600 shares traded.
Misstrade, no stock trades.
Denarii, -$199 on 18 contracts.
OBAT, -$714 on 8200 shares traded.
It was an interesting day in the stock market. I mean, stocks are moving all over the place like mad. Simply put, stocks haven't moved this well since last May.
It was also kind of funny if you were listening to CNBC. Bob Pisani was in "serious mode" and on a couple of instances warned viewers that "they are going to try to sell into this rally today folks"... which left me wondering what rally he was talking about.
Yes, we "bounced" yesterday, but as we discussed here the bounce came on light volume. Listen to Art Cashin, read the IBD... there is no "rally" to speak of right now. The "rally" died last week. It will now take a day of strong gains on excellent volume followed by at least one other day of strong gains on excellent volume before you can declare a new rally has begun.
Also funny is how not one market "expert" on CNBC today admitted to selling. One has to wonder who sold all day? Perhaps it was just a lack of "buyers" which is sometimes how they explain these sell-offs. Whatever. I'm pretty sure that the NYSE set a new volume record today.
Someone is selling and they are selling very, very hard.
p.s. I sold.... shhhh! Oh, and Clarence is back.
This one really pissed me off because I was short and in a matter of 30 seconds, the stock moved a half point on only a thousand shares.
Previous to this wackiness, courtesy of the Hybrid Market, the stock was behaving fine. This is why it's hard to have full confidence in the hybrid... weird stuff comes out of nowhere. Notice after the spike that the stock went right back to where it "should be"... the spike was nothing more than a trade aberration.
These are funny... and since the market is slowing here as we close in on the noon hour, I'm posting them for you.
UPDATE: Maria and Erin, "the bank skank" don't get along... awesome!
After a bogus early morning rally... Clarence, The Rodent of Stock Market Volatility, has the bulls by the balls.
NOTE: Art Cashin is useful on CNBC. And I'll say that Dylan Ratigan is as well. At least the dude has a good sense of humor. Meanwhile, there have been lots of people yelling back and forth today on CNBC. It is time to click it off and listen to music instead...
UPDATE: With the market back up almost 100 points after the "raid" attempt between 10:15 and 10:45, I am left to menace Clarence, The Rodent of Stock Market Volatility, with my pet snake "Hester."
Wow, the futures are up 12 points! 3 words. What. The. Fuck.
Anyway, here's your stock earnings "cloud."
Monday, July 30, 2007
I don't really know what a "Bull Trap" is, but my guess is that it's a rally just like the one we saw today. Plus, it rhymes with "Bull Crap" which is what I think of today's market move.
I mean, I knew we'd bounce but CNBC is acting like the sky has been cleared and we're ready to run to 15,000 on the Dow again. Gimme a break! The market got killed on Friday, practically melted in the last 30 minutes of trading and on all time record volume no less. Today we rally 90 points on lighter volume and we're good? I don't buy it.
Anyway, maybe I'm just pissed because I largely missed the rally. That's probably it, in fact... I made money right off the open in a number of stocks but then got chopped up between 10 and 12. If I got long I lost money and if I got short I lost money. Things just weren't moving for me. So, I walked away.
When I came back to my computer around 2pm, I saw that we "rallied" nicely during lunchtime, about 100 points on the Dow. The solars were really moving, FSLR in particular and so I picked up one, LDK (that I saw mentioned on Stewie's blog this morning) that hadn't moved with the others.
I bought it at just the right time, at around $44.50, just before it jumped up to $45. I quickly took profits (since I'm too bearish for my own good) and watched it trade up another 60 cents, but it was my best stock on the day nonetheless. I made $301 on the trade.
My worst stock of the day was AAPL. I made a few trades in it and while in each trade I was right initially, I didn't get out with a winner once. The stock was just too choppy today and it was a mistake for me to keep going at it. The only good thing was that I kept my position size small in these losing trades. Still, I lost $360 in AAPL today.
Anyway, the selloff from last week reminds me somewhat of the drop in February. The market ripped down on incredible volume and then began rallying on light volume. I got so bearish that I was crippled mentally to take part in the rallies. I will be watching myself closely to make sure that I don't let the effect my trading too much. Today, it definitely did. I missed out on a pretty good rally... lots of stocks moved.
Let's see what happens tomorrow. While I believe we're headed back to the lows, I'm going to try and keep an open mind day to day... hopefully Clarence, "The Rodent of Stock Market Volatility" will visit again soon.
Here's the stats:
shares traded, 34,200
24 stocks traded, 11 winners, 13 losers
175 total trades
Denarii, $494 on 20 contracts traded.
Me, $154 on 34,200 shares traded.
OBAT, $120 on 4800 shares traded.
Bubs, -$179 on 2000 shares traded.
Evolution, -$1148 on 44,200 shares traded.
Well, it was pretty much a chopfest out there today. The futures held on to some support around the 1460 area and the market rallied. However, most of the juice of the rally came during the low-volume hours of the day, from 12-2pm.
While Maria Bartiromo was squealing all day about a "major bounceback" and Bob "the village idiot" Pisani kept salivating about the "heavy volume" I think they have it all wrong.
Art Cashin, perhaps the only CNBC regular who has a real head for the stock market (as ironic as that sounds) in a segment with Pisani and Ratigan said, "I would have liked to see more volume today. Volume that would have equalled that of the sell-off on Friday." Pisani immediately chirped up, "Yeah, but that was record volume on Friday..." without noticing that on Friday he was talking about how the financials were holding up... I mean, you can't have it both ways.
The fact of the matter is that the market sold off hard on record volume on Friday and bounced weakly today. I highly doubt the market is out of the woods. But we'll see. Perhaps Bob Pisani is correct...
Meet Clarence, the "rodent of stock market volatility."
While he's slightly less famous than Santa Claus, the Easter Bunny or his gay cousin "Punxsutawney Phil" I believe that in due time, Clarence, the "rodent of stock market volatility" will be a household name.
Meanwhile, this video is 5-seconds long. Watch it over and over again...
UPDATE: Apparently, Clarence is hungover or something because it's 11:53 and all the market is doing is chopping around.
Sunday, July 29, 2007
Here is your earnings "cloud" for Monday, July 30.
Plus, there are a couple of recent "movers" that are reporting Tuesday that could move in anticipation late in the day Monday. They are, CF, MOS and VMC.
With all the recent volatility in the market, my earnings lists will be highly edited. Who needs to focus on earnings volatility when the market is melting? Volatility is suddenly everywhere.
I want to extend my gratitude to "bloggerdotcom" for his very interesting posts this weekend.
Profiting from the death of a dictator or sunken treasure is some very cool shit indeed.
I mean, who needs "the tech sector" or "basic materials" when you have an imagination?
You've set a very high standard for "weekend blogging" on Dinosaur Trader. Thank you.
I will send you your billion stock options in the mail...
For any of you who watch public television, you may have seen a fascinating segment profiling the underwater exploration of a shipwreck site called the S.S. Republic, discovered in 2003 after twelve years of searching.
That ship had sunk off the coast of Georgia in 1865 carrying a cargo of coins valued at the time at about $400,000, which in today's money is almost $200 million. It had been headed to New Orleans with the coins and other supplies to help in reconstruction after the Civil War.
You can see the page National Geographic set up here full of history and images.
More recently, the company announced in May 2007 that it had discovered a larger, still-unknown wreck off the coast of Spain code-named the “Black Swan”, with a treasure of coins and artifacts estimated to be worth about $500 million.
Can you say, “YARRR?!?”
Odyssey Marine Exploration is the company behind both of those finds. They primarily operate in shipwreck exploration but also have a themed shipwreck segment, exhibiting treasures and showcasing exploration methods. And if you can believe it, this is a publicly-traded company with the symbol OMEX on the Nasdaq.
So what's the big deal, you ask?
Well, according to this researcher we currently have a massive price dislocation, based on short-term news in terms of fundamentals versus valuation, and it's an opportunity worth capitalizing on immediately, before investors realize that they missed a huge chance to pick up shares on the cheap.
Shares closed at $5.0001 on Friday, giving the company an equity cap of just $235 million.
After the announcement of the discovery of the “Black Swan” the stock shot up from $4.60 on May 17 to $8.32 per share on May 18, an increase of 81%. At $8.32 per share the market cap is just under $400 million.
I know what you're thinking.... a current $235 million market cap when they just found $500 million of treasure? How can this be possible?
Well, the reason for such a low current valuation compared to find is because of short-term news, where the OMEX exploration vessel the Ocean Alert handling the “Black Swan” effort was forced to return to Spain after an apparent surprise boarding only a few days after leaving Gibraltar. Spanish officials had seized documents and even a laptop to gain information about the vessels activity.
According to Spanish newspapers the recovery effort was being conducted illegally, despite full transparency and OMEX covering all legal bases beforehand. Spain seems to think that the ship was in Spanish waters when in fact it is located in international waters in the Atlantic, unaffiliated with any country's territory.
Scurvy dogs the Spanish be, right!?
Odyssey has been straightforward and conservative in its approach to other shipwreck sites and I believe this time is no different.
So OMEX is wrapped up in court right now, trying to prove that their efforts are legitimate and have been made so by abiding by all necessary and applicable international laws. In the near term, this could put downward pressure on the stock.
But in the longer term, I have every reason to believe that OMEX is on the level and will persevere. And more importantly for us that the stock price will flourish.
Just think about the numbers.
To get to a $500 million market cap means that the stock would see $10 per share, and that is the value of the treasure from just ONE of their shipwrecks, the “Black Swan”.
I think you can extrapolate out what else can happen from there....
Saturday, July 28, 2007
Opportunistic investors take heed:
At some point in the future, famed Cuban dictator Fidel Castro will pass away. And as with most major events, positive or negative, there will be an opportunity somewhere to profit from his death.
I wondered how we could position ourselves to profit from it?
For starters, most investors seem to be pointing to a closed-end fund called the Herzfeld Caribbean Basin Fund (Nasdaq: CUBA), bidding up shares when there is news of a worsening illness and selling them off when reports say he is in fact healthy.
Just look at the volume on the chart.
The first major price/volume spike occurred just after Monday, July 31, 2006, which saw him hand over most of his power to his younger brother, Raul, after a message was read on state television that Fidel had undergone surgery for internal bleeding. CUBA's price that Monday had closed at $7.05 but by Friday, August 4 had closed at $8.30 on heavy volume, or a jump of almost 18%.
Similar volume-backed gyrations have continued to occur on both the upside and downside, depending on whether his condition is reported to be improving or deteriorating.
In fact, interest in the 'Castro death effect' has been so strong at this closed-end fund that its shares are now trading at a 45% premium to NAV (at the close on July 26 the fund’s shares finished at $13.78 while the NAV is $9.48). Which, of course, absurd – salivating investors are apparently willing to pay 45% more than the actual value of the portfolio's holdings.
What's extra strange about the current premium, however, is that the holdings of the fund have almost nothing to do with Cuba. In fact, the portfolio is mostly of companies surrounding the island, such as in southern Florida, Mexico, the Caribbean, and northern Latin America, all on the premise that those companies will benefit from a more open economy. What this means, though, is that investors appear to be buying nothing more than a ticker symbol.
Well, I thought that there must be something better than this and I believe I have come across probably the only company that U.S. investors have access to that has significant and direct assets and operations on Cuba – Sherritt International.
Sherritt is a Canadian company listed on the Toronto stock exchange under the symbol S.
I know some might scoff at a Toronto listing, but this is no fly-by-night scam that we so often hear about from our nearly unregulated friends up north. Sherritt is in fact an 80 year-old, dividend-paying, profitable conglomerate that did $1.1 billion in revenue and $245 million in profit in 2006.
Interestingly, however, because Sherritt has operations in Cuba, they are not even allowed to have an office in the United States.
But there is a listing for the company on the Pink Sheets at SHERF.PK.
This listing is not quoted so you will not see a bid or ask for the issue – it is traded in what is known as the “Grey Market”, which has no central interdealer quotation system. This clearly adds an element of risk to anyone considering purchase.
I checked out more on this company and I have to say I’m impressed. Its range of businesses will make your eyes pop:
- Nickel mining
- Cobalt mining
- Power and electricity
- Oil and natural gas
Just from this list alone you have to wonder why this company hasn't been bought out, given what has happened to the nickel miners and fertilizer companies in the past year or two.
About 26% of 1Q07 revenues came from Cuba. Its operations on Cuba deal primarily with nickel and cobalt mining, oil and natural gas (Sherritt is actually Cuba's largest producer), and power. And the company is still investing and growing, with planned expansion phases going out to 2011 in some cases.
I can only guess what might happen politically when Castro dies but the potential exists that the economy might open up even a little. I’m thinking that Sherritt could benefit from this – increased demand for their products and services as investment flows in, especially given that they have been operating on Cuba since about 1995 and thus are rather connected and experienced.
From a valuation perspective, on the TSX website the company’s trailing P/E is at 8.6 as of Friday. It’s an unbelievably low valuation based on both average market P/E’s of 15, the range of hot commodity businesses that Sherritt operates in, and comparisons to the P/E's of companies that specialize in those businesses.
Now compare that to how investors have bid up CUBA to a 45% premium to NAV – all based on the hype over pretty much just a ticker symbol.
If all else were equal I would expect SHERF.PK’s share price to appreciate to the mid $20’s, just to get to “normal” valuation. After that it’s anyone’s guess. The idea of course being to get in before others “discover” that they have access to an incredible and direct play for the island.
Please note of course that there are some obvious risks, though. The stock isn't quoted normally, these shares are restricted and non-voting, you will not receive the dividend, there is time risk and political risk, etc., etc. Other than that, though, we're good!! Viva!
Greetings, blog readers!
Just wanted to give a small introduction before my very first blog post.
But before that I must give DT props for giving me the floor this weekend as a guest blogger - and congratulate him on a huge performance during this past week! Great job and continued success!
I used to daytrade and work on "the Street" but now I work from home (in another industry) and mainly swing trade. I follow the market on a daily basis and get cranky if my time watching the close is somehow interrupted.
I enjoy doing research on potential investments and actually think forensic accounting and the SEC website are very exciting. When I do research I try to find companies that aren't in the spotlight, that for some reason aren't paid much attention as I try to profit from a relative value gap. My idea is to get in before others "find out" what a gem XYZ company actually is....
So I found a couple recently that I've decided to share with you - one today and one tomorrow.
Feel free to leave comments and thanks for reading!
Friday, July 27, 2007
Wow. Look out below! Check out this chart of the Dow Industrials for the month of July.
The market sold off HARD between 3:30 and 4pm. That's because NO ONE wanted to hold onto stocks over the weekend. The market melted and people freaked.
And that, ultimately, is a good thing. Excessive fear like we saw at the close may lead to some kind of short-term "bottom" on Monday or Tuesday. Even if it isn't "THE BOTTOM" it should provide all kinds of opportunities for picking up some quick rips. Trading these next few days should continue to be good and volatile.
That is, as long as your trading software holds up. Anyone else experience slow quotes in eSignal today? Seriously, are there any solid stock software programs? I've been hearing about problems all week with all of them...
Ironically, again, I made no money on the short side today... except in SWC. :)
I made practically all of my money in the first 45 minutes of trading today, and then gave more than half of it away in the afternoon meltdown. Mostly all of the profits I lost were in CRS which went from being one of my best stocks on the day, to my worst stock.
The reason why I lost so much in him is because I bought a lot of shares and when the stock turned, it turned quickly. For a while it was showing relative strength as the market started selling off. Before it was completely obvious that the market was going to melt it actually felt like we could go positive. I loaded up in CRS because at 3pm I really felt it going positive on the day... no joke!
Anyway, I was wrong. I lost $548 in the stock, my worst of the day.
My best stock of the day was CF.
I caught a solid long in the early morning. My only mistake was selling too soon. I sold most in the $57s and watched it quickly trade up a point higher.
Other good stocks for me today were DE, LNN and MLM.
It should be noted that today the IBD changed its "Market Pulse" feature from "Rally Under Pressure" to "Market In Correction." As a daily reader of the IBD (this despite the fact that they have the most uninformed editorial page in the history of newspaper publishing) I find this informative. As wrong as they are politically, they are often very right on the market.
Their headline ran "Stocks Sell Off Hard In Massive Volume, Killing Market Rally." They're not holding any punches and they're not cheerleading the market. Contrast that kind of information with the crap that CNBC spews. If you want to know about the market pick up the IBD and turn off CNBC.
Anyway, here's the stats. Enjoy this weekend and rest up for what will probably be another crazy week of trading ahead.
Oh, and don't forget to check the blog this weekend for some posts from "bloggerdotcom" that will detail a method for profiting on Fidel Castro's death! COOL!
Best, CF, $937
Worst, CRS -$548
shares traded, 67,000
24 stocks traded, 15 winners, 9 losers
Misstrade, $2100 on 1800 shares traded.
Me, $1763 on 67,000 shares traded.
Evolution, $673 on 114,800 shares traded.
Bubs, $82 on 1200 shares traded.
Denarii, no stock trades.
OBAT, -$13 on 7200 shares traded.
Doug Kass and Jim Cramer got involved with the CNBC idiocy today. Calling the "bottom" at 2:45pm.
From 2:45, the Dow declined about 200 points.
When will they learn?
Anyway, I admittedly was taken by surprise by the late afternoon selling, it caught me long and I lost a good chunk of my day. I'm very happy we have a weekend to look forward to but I have to say, Monday and Tuesday could prove to be very scary days indeed.
Art Cashin may be the only guy on CNBC with a brain. Bob Pisani is a complete idiot. Not one word that leaves his mouth should be listened to... I'm dead serious about this.
Don't forget to check the blog this weekend as "bloggerdotcom" writes "stuff about things."
Seriously, it's gonna rain this weekend and you have to keep your head in the market. Don't start day-dreaming now, you'll miss all the excitement!
By the way, I thought this was funny.
If you go to Google and search for, "Maria Bartiromo annoying lost her mind today" as someone did yesterday, Dinosaur Trader is the first link that comes up.
HAHAHAHA! Google really does work!
QUESTION: Is anyone else having a hard time loading my site? I think CNBC put a hex on my site.
As if the market wasn't messed up enough in it's own right, CNBC had to pull out all the stops and go to the White House today.
I had the TV on mute, so I can't tell you what they said. But I'll briefly explain what I saw.
First, a headline at the bottom of the screen with the words, "Breaking News" and President Bush, all furrowed brow and moving hands, snickering. That was bad.
Then, minutes later, Dylan Ratigan sitting with the entire Bush "economic team". YIKES! I mean, nothing says, "Get the fuck out of the market right now" like the White House feeling the need to get idiot reporters to tell everyone it's going to be "okay."
CNBC did air one decent segment today that included Joe Kernen bashing Mark Haines for calling a "trading bottom" when the market was down 70 points yesterday... that was good.
I guess I wasn't the only one who noticed!
NOTE: Notice the new label.
Thursday, July 26, 2007
If you have been following along lately, then you know that a few blogs have been hit my some spam concerning a particular precious metal...
This is hilarious.
Check the link if you want, but here's a brief synopsis.
A man maintains a blog about Catholicism in St. Louis. He writes a post titled "Noble Metals for Sacred Vessels."
In this post, he lists some metals that would be appropriate for liturgical purposes in hierarchical order from most to least noble.
JJ's favorite metal, palladium tops the list.
And guess who got spammed?
C'mon, JJ. Nobody fucks with the Jesus!
The punchline is that the guy then commented on JJ's blog asking for him to donate some palladium. I kid you not...
JJ, God has spoken and he does not like spam. However, some palladium would be nice!
UPDATE: More on the "SWC Spam Debacle" here!
As if it even matters given all the wackiness of the last week.
Still, here it is, your stock earnings "cloud" for Friday. Enjoy!
Just a reminder. Please remember that this weekend there will be a few weekend posts courtesy of a man called "bloggerdotcom".
I don't know much about what he will be posting. It could be about stocks, it could be some really hot internet porn, who knows?
Thing is, be sure to check it out.
Days like yesterday and today are what you pray for if you are an equities trader.
Here are a few examples of stocks that were great to trade today.
In fact, looking at graphs like these objectively at the end of the day, it's a wonder I only made money on the long side in them. Imagine if I was smart enough to be short... but that's why I posted the Wizard of Oz video before.
Anyway, there are countless examples of graphs like that today. The best news is, WE BARELY BOUNCED. Like I said in the Virtual Office post, there is so much fear in the market right now that no one knows which way is up. This is great for trading stocks.
My day went something like this. I made good money between 9:30 and 10:15 and then gave most, if not all of it back between 10:30 and 2pm trying to "pick bottoms" on a number of stocks, mainly DE and UBB.
Yesterday, it worked when you bought stocks as they traded down to the 50-day moving averages. Today, the market didn't give a damn about technicals... at least initially.
Once the "buyers" moved in at 3pm (or so) stocks that have been strong recently bounced very nicely. This is when I made all my money today. Ironic, because on a day where the Dow is down over 300 points, I made my good trades on the long side.
Unfortunately, I was very skittish when the "real bottom" was made today and so I didn't size into most of my positions as I should have. And the one stock I really did size into, MOS, I got out of too early to really profit. My quotes went all screwy for a little while and so I got nervous and sold a lot before I should have.
I traded a shitload of shares today. There are a couple of reasons for this. First, I did a lot of "churning" between 11:00 and 2:00 pm... a time I normally don't trade much. I should have kept to that rule today, but when the market is down 400 points, you expect there to be movement. And there was, I was just trading on the wrong side. The other reason my shares bumped so much is that I've increased my position size again. When I was struggling I was trading with 200 share positions. I'm back to starting with 500-1500 share positions and adding as I find necessary.
Do I wish I hadn't churned so much in the middle of the day? Absolutely. However, trading that much did help me to get a feel for the bottom when it was made... there's no doubt about that.
Anyway, more fun on tap for tomorrow and probably even next week. At some point soon the market will have to take a breath and we'll have to adjust our trading styles accordingly. For now, enjoy this volatility and milk it for what it's worth.
Here's the stats:
Best, DRYS, $1281
Worst, CF, -$548
shares traded, 113,800
34 stocks traded, 23 winners, 11 losers
Me, $5265 on 113,800 shares traded.
Misstrade, $4756 on 6700 shares traded.
Bubs, $265 on 2800 shares traded.
OBAT, $145 on 9000 shares traded.
Evolution, $30 on 68,400 shares traded.
Denarii, -$52 on 400 shares traded.
Not much really happened in the market today. It was a ho-hum, nothing doing summer trading day.
The market is currently like a binge-drinking drunkard swaying dangerously. No one has any idea what the heck is going to happen.
Mark Haines said at 10:00am that his technical indicators which are too "arcane" to explain to the common man told him that a bottom was in. Bob Pisani and Maria Bartiromo jumped around all day saying that everything was fine and that the "global story" is still intact.
Days like today expose the idiots like nothing else.
Please, stick to reporting guys. Your market commentary is woeful... I don't care how long they've been down on the floor. They haven't learned a damned thing. Or, perhaps they aren't there to educate people at all... they are there simply to cheerlead.
Who knows what will happen to the market? Nobody knows. Anything can happen. Should make for some fun in the coming days and weeks. I'm not saying that we're going to 5,000. I'm just saying you shouldn't be calling bottoms when you haven't a damn clue.
That is all. Now back to your regular programming.
P.S. The VO had another kick-ass day.
"Are you panicking?"
How many times have they asked this to the "money managers" who come on the air?
Have you ever heard one of them say, "Oh yes, we're completely panicking. I'm freaked out right now! What's the market doing?"
No. And they never will.
CNBC always shows how silly it is when the shit hits the fan.
You know, I hate all things Fox but perhaps a new business channel (besides Bloomberg) will make CNBC smarten up a bit.
The best was Mark saying that it was too hard to explain, but his "technical indicators" were telling him that the market was going to rally. Of course, he said that at around 10:00am, when the market was rallying.
What his "technical indicators" didn't tell him was that the market was going to slap all longs like little bitches only about 10 minutes later.
I wish they would let the market do what it's going to do and just shut up about the direction.
Futures are down 12 points (back from a low of down 18 or 19 points) and things look to be interesting at the open.
Hundreds of companies reported earnings after the close yesterday and hundreds more will report pre-open and during the trading day.
CNBC is scrambling to get bears onto the screen and everybody is talking about "credit concerns".
This volatility should last awhile.
Wednesday, July 25, 2007
It's a doozy of a "cloud" for tomorrow. Enjoy.
HUGE ADDITION: TNH REPORTED!
That is correct, we have a weekend blogger. A cryptic fellow who goes by the name of "bloggerdotcom."
He poses the question: How do you make money when Fidel Castro finally kicks the government-issued bucket?
Please be sure to check in.
I was going to name this post something like, "RIP 'Slump' March 2007-July 2007" but I decided against that.
I think that instead I'm going to treat "the slump" kind of like we treat the "War on Terror" here in the U.S. It's going to be a never-ending battle that requires vigilance and constant changing of tactics.
That said, I won a pretty significant battle today, no doubt.
My "best" trade of the day also happened to be downright lucky. It was a short in TBSI.
I was turned onto this stock over the last week by the guys in Wallstreak. It's a shipping company and therefore, it often trades along with the price of crude and with oil stocks in general.
It was relatively strong going into the Oil Inventory data that was released at 10:30 and so maybe I shouldn't have been shorting it at all. However, with the weakness in every other shipping stock, including the other recent leader DRYS, I took a shot.
Here are my trades in the stock:
10:14:13 Short 300 @ 38.85 (-300)
10:14:27 Buy 300 @ 39.04 (flat)
10:23:15 Short 200 @ 38.65 (-200)
10:30:36 Buy 100 @ 37.70 (-100)
10:31:39 Short 300 @ 38.09 (-400)
10:38:05 Buy 100 @ 37.65 (-300)
10:44:04 Short 200 @ 37.78 (-500)
10:50:09 Buy 300 @ 34 (-200)
10:50:49 Buy 100 @ 34.18 (-100)
10:50:54 Buy 100 @ 34.20 (flat)
Never in my dreams was I expecting the stock to drop to $34. I was thinking it could go to "unched" on the day, but I didn't see that drop coming. In fact, the low of the day was $33, so I left a point of profits on the table. No complaints, I made over $2000 in the trade.
Anyway, at around the same time that TBSI was falling off a cliff I made another good trade. This time in a recent favorite of mine, MOS.
Again, I found this trade by watching all of the fertilizer stocks decline. They were all weak, though again, I had no idea that they were all about to fall off the face of the market.
I initially short MOS up around $38.80 because it was struggling to regain it's highs from the early morning and the rest of the fertilizers, most notably MON, were coming off. Again, I was hoping the stock would get to it's 50-day moving average line and then stabilize, setting up an opportunity to buy.
It shot straight through the MA. In fact, I covered way too early and then got long. I took a loss in that initial long but kept watching the stock. I bought back a little later and rode it up for a nice retracement. I made a little over $1500 in these trades.
I also had two other fertilizer stocks that I traded for over $1000 in gains each, CF and TRA. Both were short trades made at the same time I was shorting MOS. So, the charts speak for themselves.
On the other side of the ledger, I made bad trades in ARD and BTJ today. I bought ARD during it's slide lower in the morning and then missed the bounce. BTJ, I bought once and lost a straight point on. Sometimes that happens in BTJ, he's a lunatic. The good news was that I didn't get stubborn and try to fight the stock or make a revenge trade. I took my loss in BTJ and walked away. -$392 on 400 shares traded.
So back to the post title. Surely the market has been better for trading these last few days and that has something to do with my recent success. However, I also think that calling my risk manager and placing a very tight loss limit on myself has done wonders for easing some of my mental strain. It was kind of like admitting that I had a problem and that I needed some help in getting my discipline back.
Simply put, I no longer feel like I'm trading without a net.
During my big years, I was in an office. I can be a "competitive shit" and I wanted to beat the other traders because frankly, I thought most of them were meatheads. I never had big losses. I knew they were the hallmark of a bad trader. I just focused on making good trades, taking long lunches and letting the boys with the big egos scream red-faced at their 12 monitors and talk about their fancy cars and their country clubs.
Wanting to beat those idiots made me a better trader. And for the years I traded in the city, I beat most of them day in and day out. Back then, my competitiveness provided me with a "net".
Since I've begun trading from home, I've had a hard time channeling my competitive spirit back into the market. Despite the fact that I'm a trader and I like to trade well, I've never been a materialistic guy. Making money for the sake of making money has never interested me.
So then I became a father and the entire focus of my world turns towards my daughter. Making money then became more about "security"... having enough for her college, having enough for (if you can believe it) her nursery school! This led to a classic mindfuck. Every time I lost money it became anxiety. Every new loss turned into "how can I afford to send her to school?" etc. This is a very poor mindset to trade with because it killed my ability to want to take on any risk... I became afraid to lose money and ironically, this led to me losing money over and over again.
Over the past few months, even before I contacted my risk manager, I started working on taking my foot off the pedal. I took up surfing again. I started walking away from my computer in the middle of the day... I began to trade less and I began to search for perspective again. These efforts, combined with the "net" from the risk managers have given me a floor to stand on again.
Hopefully, the trend has finally changed here.
Here's the stats:
Best, TBSI, $2078
Worst, BTJ, -$392
shares traded, 63,200
22, 14 winners, 8 losers
total trades, 300
Me, $6817 on 63,200 shares traded.
Misstrade, $2395 on 5500 shares traded.
Bubs, $546 on 2200 shares traded.
Evolution, $212 on 73,200 shares traded.
OBAT, $128 on 6200 shares traded.
Denarii, $82 on 600 shares traded.
As I mentioned in my earlier post today, volatility is back.
With people not sure if the market is going to 20,000 because of the "goldilocks economy" or 10,000 because of subprimes and credit tightening the market isn't really sure what to do. And so, stocks are trading all over the place.
That's good for traders. Countless numbers of stocks tested their 50-day moving averages today. Only time will tell if it was a great buying opportunity or a real sign that lower prices are on the way. Better yet, earnings season lasts a couple of more weeks. Play this volatility until the middle of August and then go on vacation until early September.
The good news is that the VO had one of it's best days on record. Every trader finished in the green. Always nice to see.
Oh, and I kicked ass. :)
Oh yeah, it's back, baby!
What a wild morning. You can check the details of some of the trades I made over at Wallstreak. I had some really good ones, (TBSI, MOS) but also some real bombs (MTW).
But the point is, volatility is back in the market place and that means it's time for trading.
Tuesday, July 24, 2007
Here it is, your "earnings cloud" for July 25, 2007. Enjoy, it's a big one.
Remember, this is an edited list from Yahoo Finance. There are more stocks that are reporting earnings tomorrow, they're probably just shitty stocks.
Also, if you see I'm missing a good stock, please feel free to fill me in via the comments section. Hundreds of you are reading this yet you're all creepy lurker types...
The goodness started early. For the first time in a long while, I entered some orders at the open and they worked.
At the open, I got short FED because of the weakness in CFC and CF because of the weakness in TNH.
This is the way I used to trade. Find the stock with news or volatility and trade a related stock that will move, but won't be as volatile and, in theory, less dangerous.
As it turned out, I covered both stocks early. But that's fine because what's important is that both trades were profitable and got me started off. I'm not looking to make perfect trades, I'm looking to make money.
Anyway, the next stock I got short was one of my recent favorites, BTJ.
I short him because all of the oils were coming off hard and he's been a real momentum play. With momentum getting slapped marketwide, I figured it was only a matter of time before BTJ got shelled as well. This stock isn't for everyone, that's for sure. The spreads are wide and it can get spiky. Worse still, it trades on the (enter scary music here)AMEX... but, it was my best stock of the day as I made $551 in the bastard.
Anyway, I've started to feel excited about trading again... I mean, I'm still down on the month due largely to my blowup last Tuesday, but things still seem to be getting better. It's all mental. Hopefully, I will be able to write intelligently about this all in the near future. I'll be able to look back with some perspective on "the slump" and be done with it.
If there's one thing that has been an awful hallmark of this particular slump it's that when I start to feel confident I get smoked all over again. The good news is that I've set very tight loss limits with my company so right now, it's impossible for me to blowup. I think that's been somewhat freeing psychologically. Knowing that if I lose a certain amount I will not be able to place orders has been a great incentive not to screw up too badly (so I can keep trading) but its also insulated me from massive losses that will kill my confidence (not to mention my P&L).
Looking forward to the rest of the week.
Here's the stats:
Best, BTJ, $551
Worst, CFC, -$109
shares traded, 29,000
17 stocks traded, 11 winners, 6 losers
139 total trades
Misstrade, $3018 on 5200 shares traded.
Me, $2093 on 29,000 shares traded.
Evolution, $901 on 71,200 shares traded.
Bubs, $101 on 400 shares traded.
OBAT, $5 on 5800 shares traded.
Denarii, -$10 on 1000 shares traded.
Well, with the markets predicting the end of the world tomorrow, things were pretty interesting today. However Bob Pisani and Dylan Ratigan are saying the bottom is in... lol!
I mean, what's great is that the market sold off over 200 points and it really doesn't dent the indexes too much. We're only 250 points away from 14,000 still. Remember that? Dow 14,000? Imagine how much fun we could have if we got some real volatility back?
Anyway, as I stated in an earlier post, this whole week should be interesting and good for trade.
AMZN after the close today, AAPL after the close tomorrow... get out your hard hats!
UPDATE: Market reacting positively to AMZN earnings early on...
NOTE: My daily post will be later this evening.
Just take a quick look at the graph below.
See that first 15 minutes? That's freaky... and that's the hybrid market for you. There is nothing "orderly" about that market.
That said, it's one of my best stocks on the day, but still... it's hard to trade the market with any type of confidence when there are these wild illiquid moves on 100-share prints.
Go visit Ray over at Exchanges and tell him to tell his "hybrid builders" to fix this stuff. Tell him the Dinosaur sent you, but please be polite.
Perhaps if the NYSE hears from more traders they'll have more incentive to fix trades like this.
After a crazy morning of trade, the market has quieted down here in the middle of the day.
Lots of stocks moved early... the solars, the fertilizers, the oils.... MVIS.
Anyway, I'm basically on the sidelines right now, watching and waiting.
I'd say a bounce back to flat would be nice, but I'm not hopeful as the internals are ugly here. Still, volatility entering the market is a good thing if you like to trade. If the market wants to go to 14,000 again I'm good with that. If it wants to go to 12,000 I'm okay with that too.
The rest of the week could be interesting. Loads of earnings (which I'll list here) and also a few important economic releases. Should be an exciting end to July just in time for the market to really suck in August.
And for the weekend, a probable "weekend blogger"! That's right. We're just setting up the terms of the deal. I'm offering him millions of Dinosaur Trader shares. I mean it's only a matter of time before ABC buys this site.
Of course, with a float of 64 billion, a few million Dinosaur Trader shares won't be worth much, but still, it's something.
Thanks to "the Fly" for getting me involved with this gem at $4.05.
Of course, MVIS will have to print $60 to make up for the horrendous year I'm having, but $6 is a good start.
Here's the link to the press release.
Monday, July 23, 2007
The following is a "cloud" of companies reporting earnings after the close Monday or sometime during the day on Tuesday.
I got this "cloud" from Yahoo Finance. However, I edit it down substantially. Also, Yahoo Finance isn't perfect in this regard. Like, they had TASR reporting Tuesday when in fact, they reported today... In other words, there could be mistakes on this list. Blame Yahoo or, Canada.
If a stock is under $10 or has really low volume, it would not be included in my stock earnings "cloud". I only place stocks in this "cloud" that might be worth watching to trade. This "cloud" does not represent any type of recommendation to buy or sell these stocks, it's just a "cloud" of stocks that could move (up or down) when they report earnings Tuesday.
ALTR WGOV IEX SVU
ACI AKS JEC MHP
ATHR AMZN LH SWK
CNI EPAX LRCX UAUA
CR AXE LM X
EW ATB LXK USAP
EFX AVY LMT USG
RE BIIB MDU WAT
FWRD BJS MICC WSO
PRE BNI NBR WBS
PPD CP NETL XTO
RGA CRDN EDU
SVVS CME NOC
SLG CMCO OXY
STLD CBH PCAR
STSA CPO PNR
TCB CFC PLT
TXN DD PCP
TNB EGP RDN
TSS LLY ROH
BER ENR SKX
WCN ESV SII