Monday, July 2, 2007

The Colbert Show, Profiles In Timing

This is classic. It would be funnier if it wasn't so sad.

Interpol, "Pioneer To The Falls"

Great song and whomever made this video took cuts from Donnie Darko, a movie I liked a lot.

(Just Like) Starting Over

Imagine me crooning this song to the market, instead of John singing it to Yoko. That's how it is around here.

Scanning stocks today, on 15 minute and 30 minute charts, looking for setups was a little mind-dulling, but fun nonetheless. It wasn't stressful, that's for sure! So perhaps me and the market can rekindle the love we used to have for each other.

But I've been down this path before. I have a good day trying something new and then I fall back into old habits and get smoked. I will need a few days of watching stocks and seeing this stuff work before I get too excited.

Anyway, my P&L sheet looks as it should, one good winner and no bad losers and the rest of the trades more or less cancelling themselves out.

Here's what worked for me:

With the market up big, I was looking for longs. I found CMI had opened strong and then pulled back into a base from which it was slowly grinding upwards. 103 was acting as resistance all morning. When it broke above 103 and stayed above I looked to buy above the top of the morning range. At 11:55 I was filled at 103.32. The stock ran nicely and didn't really cause me any pain as it never dropped below 103 again.

I noticed that on Thursday of last week the stock made a little double-top around 105, so I expected resistance there. At a little after 2pm, it ran up to 105 but showed a bearish looking shadow on the candle so I sold 100 shares. I held the rest until 2:45, when it tried to run over 105 again and failed. Anyway, so with a 200 share trade, I net $286.

My second best trade today was a short on CROX in the morning.

I noticed that on Friday 43 was resistance. Also, on the daily you can see that Friday was a pretty weak bounce on anemic volume. So when the stock opened above 43 but struggled to move much higher, I watched for it to fail and break back below 43 which I assumed would be resistance again. Another thing making me bearish was the face that some firm came out and reiterated their "Strong Buy" on the stock but no one seemed to care. So, I short 100 shares at 42.95. Plus, their shoes are ridiculous looking...face it, Trading Goddess!

Anyway, I thought there'd be some support at 42 and decided to cover at 42.30. I didn't like being short with the market being so strong.

One thing about my position sizes this week. They're going to be extremely small. I'm working a new style of trading and it's a holiday week. So I'm just testing. Call it Dinosaur Beta. If I enter a trade that is with the market, like CMI, I'll throw in 200 or 300 shares. If I'm doing a counter-trend trade, as with CROX, I'm going to cut my size in half.

It's all about gaining confidence. Once I gain confidence trading like this I will up my position sizes accordingly.

There's one thing I still don't "get" about trading like this. Say if I'm long and then the market starts to break and go lower. Do I sell my winners (assuming I'm still long and in the money) or just move stops up to break-even points? It's this "managing positions" thing that I have to get straight. Last week I ran into trouble when the market reversed and I wasn't fast enough to cover my positions. I let winners turn into losers. The trick is managing the stops so I give them enough room to work out yet still keep my losses small enough. This is something I need to work on still.

Anyway, here's the stats:

P&L, $314
Best, CMI, $286
Worst, AGU, -$45

shares traded, 3200 (probably an all time low for me on a full day of work)
stocks traded, 8, 4 positive, 4 negative
total trades, 26

Virtual Office, $1573. Dow, +126.81, 13535.43.

Misstrade, $832 on 6000 shares traded.
Me, $314 on 3200 shares traded.
HPT, $204 on 10 contracts traded.
Evolution, $154 on 37,500 shares traded.
OBAT, $69 on 400 shares traded.

Volume was light today, but not awful. I bet this was will be the highest volume day of the week though, as people will leave for the Hamptons on Tuesday afternoon and stay out all week long. Based on my blog volume alone, I feel lots of people are already gone.

Next Monday hopefully, we'll be full staffed again.

Anyway, all the action in the indexes basically happened in the first half hour of the day and then we fell into a range. It was a strong day, but choppy and on light volume. Not optimal trading conditions. So, it's good to see that everyone finished in the green for the day.

Tomorrow is a half day for the exchange and therefore it will be a half day for the VO as well.

Conversations With Toddlers

This is a word-for-word snippet of a "conversation" I just had with my 2 1/2 year old:

She: A merry-go-round that doesn't stop.
Me: Are you talking about life?
She: No. I'm talking about a merry-go-round that doesn't spin.
Me. Oh.
She: (sensing I have no idea what the heck is going on) You know what I'm talking about Daddy?
Me: No.
She: (moving on) I saw a kite!

In related news, my wife has promised a post on excrement and how one removes it from a number of surfaces. Developing...


Well, as advertised, this week has started off on a slow note. I'm not saying it's not cool that the Dow is currently up 90 points, I'm just saying that all of the substantial action in stocks came in the first 30 minutes of trade and since then, the indexes have been flatlining.

In keeping with my "plan" I have only executed a few trades today. So far, so good. I've been studying setups via Maoxian, and candlestick charts via Trader Mike. I know this may seem somewhat ridiculous from someone who's been daytrading for the last 8 years, but my knowledge of "setups" and "chart patterns" is basically nil.

I have been trading intuitively for so long that these things are basically new to me... meaning, if someone asked me how I've made so much trading these last few years I wouldn't be able to tell them in any clear way.

I traded and I don't know how.

So in a way, I'm learning how to trade all over again. It feels crisp.

Anyway, we'll see how the day ends. If I lose money, I'll go back to freaking out.

UPDATE: The Dow is now up 105... perhaps we'll have a nice afternoon rally.

Ray's Vast Basement, "California's Gone"

Oh man, I'm so happy this band has a new album out. I found their first album a few year's back and bought 3 copies, one for my dad and one for a friend who also likes music. I bought it directly from the band, and it came with a pack of pictures telling the story of the album. I still listen to it.

This single from their new album sounds great... check it out!