Friday, July 27, 2007

Stock Market Volatility Continues

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!

P&L, $1763
Best, CF, $937
Worst, CRS -$548

shares traded, 67,000
24 stocks traded, 15 winners, 9 losers
281 trades.

6 comments:

BABY TRADER said...

Nice job this week DT!

Hey, my Etrade was back to normal today for what it's worth. But the volume was not as crazy either....conspiracy theory still intact :)

Dinosaur Trader said...

Thanks BT,

Yeah, I like your theory. My esiggy blew chunks today...slow quotes. A real discrepency between my quote system and my execution system. It was throwing my off all day.

-DT

JJ2000426 said...

Good you make money shorting SWC. Did you cover? I hope you hold on to the short until after the Aug. 6th earnings release. It will be an absolutely blowout earnings based on my best estimate.

There is a trapped big short, I warn you. They have to panic if the earnings is good. The float is too narrow for the shorts to cover, except for the small retailers.

I am bullish on SWC for long term.

Dinosaur Trader said...

JJ,

Okay, I lied. Just making sure you're reading...

I bought around $9.20 and sold at $9.50 and made a few hundred on the long side.

I have no position now. And I'm really happy about that, given the condition of the market!

-DT

JJ2000426 said...

You sold too cheap. This is a great stock worth holding for long term gain. How much you get from day trading, Do you have double in your portfolio in a year?

I started loading SWC shortly before the $8 bottom last year. Did not think much just feel it was cheap. But recently I really started to look at the fundamental and find this is really something very good. People don't know palladium, People are mislead by the un-predictable earnings in the past. People do not see the big picture that as palladium continue to go up SWC will be making a huge amount of money. That makes SWC so cheap to buy.

Do you ever buy a stock based on fundamental, instead of merely based on momentum?

Aug. 6th earnings release will be huge. Don't miss that. I called some one within SWC he could not talk much due to the restrictions but his tone is very positive and he is not worried about the SWC stock price at all.

Dinosaur Trader said...

JJ,

On this blog I focus on my daytrading. I do have a swing account too.

But I have to say, looking at the graph of SWC it just looks like there is something WRONG. I mean, as an IBD subscriber and follower I can't say that graph looks attractive... quite the opposite.

Fundamentals are great but you also have to be in the right sector at the right time. Given this market's recent performance I think I'd be a little scared to buy too much of anything right now. I'd like to see a nice base and bottom form in SWC... no need to try and pick bottoms... I do enough of that (often unsuccessfully) during the day!

-DT