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:

Best, TNH,
Worst, VNO,

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"