Wednesday, August 8, 2007


Bartender: "You want a floater with that?"
Me: "Absolutely!"

That's just a snippet of a conversation I was having at around 2:30 this afternoon when the market decided it wanted to freak out without me. I was on my way back from buying a new rash guard (wetsuit season is now over with ocean temps above 70 degrees) and my friend wanted to stop and get a drink.

So I sat in the sun, drinking this nice frozen drink, checking out the fancy cars, laughing with other people who are here on vacation, completely oblivious to the fact that the market was about to offer loads of opportunity. I'm not even going to post a graph of specific stocks. They all moved massively. Here's a look at the S&P 500 futures.

That move is simply tremendous. There is no other way to explain it. Days like today, I wish I was still trading in an office.

Anyway, so I can't really get into what happened to the market after 11:30 this morning when I decided things were "dead" and that it was time to take a break.

I will say that by 10:07 I was up a couple thousand dollars and feeling pretty good. I caught a nice longs in TNH, CT, RWT, ITU and CNS. I was specifically happy about my trade in TNH. Why? Because I've been watching the stock quiet down these last few days and I expected a real pop soon. That's exactly what happened in the morning.

I bought below $89 and got out at $92. I only had 100 shares. "Wincity," I hope you had more.

However, here's the trade that made me decide to exit for awhile. As I said, I made money on the long side of CNS in the morning.

But what happened at around 10:30 is that I got sucked into the stock again near the top as I expected both an intraday breakout and a breakout of a longer term downtrend that has been in place since June. I bought a nice position for this rather thin stock, 1000 shares, and watched it melt downward. And, I got stuck like a moth to a light bulb. I lost about 75 cents on the trade, or close to $750 dollars. So a stock that was a morning winner became my worst loser of the day, at -$339 dollars. I got stuck because I "believed" in the position too much. I liked the story... it was breaking out TWICE! YAY! and I got screwed.

Conviction is not always the friend of the trader.

Anyway, so that's that. I missed the fireworks today but I still managed to make some money. I'm very frustrated that between Monday and today I've only managed to make a relatively little amount of money however, at least it's money. I'm still working up my confidence. I hope this volatility lasts until I can really take advantage of it.

Time to try out the new rashguard.

Here's the stats:

Best, LAZ,
Worst, CNS, -$339

shares traded, 32,000
21 stocks traded, 13 winners, 8 losers
163 trades

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