Tuesday, July 31, 2007

Ending The Month In Style

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.


The White Stripes, "Black Math" (live)

Stock Market Meltdown

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:
P&L, $6147
Best, AG,
Worst, VNO,

shares traded, 99,600
30 stocks traded, 19 winners, 11 losers
354 total trades

Virtual Office, $5726. Dow, -146.89, 13,211.42.

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.

Freaky Hybrid Trade of the Day, ATB!

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.

Dylan Ratigan On The Money Commercials

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."

Stock Earnings, 07/31/07

Wow, the futures are up 12 points! 3 words. What. The. Fuck.

Anyway, here's your stock earnings "cloud."