Wednesday, August 1, 2007

Doves, "The Cedar Room"

The audio on this clip is weak, so turn it up!

Bitter Tasting Medicine

Well, my last trade of the day was this:

15:35:05 Sell 400 MTG @ 34.25 (flat)

I took a quarter point loss in the trade but more importantly, took myself out of the market for the rest of the day because my self-imposed loss limit had been triggered (-$1500). Immediately after I sold out, the market ripped.

Painful but I only have myself to blame. I traded like shit today.

Whereas in the last few days it seemed that whenever I entered a trade it immediately moved in my favor, today the opposite happened. I took a lot of small losses (and a couple of big ones), over and over again and they added up.

A perfect example of my awful timing today is shown in my worst stock of the day, MA.

I bought the stock just after noon and quickly, almost before I was able to react, lost a point. Then, I waited a moment before I sold (hoping it would bounce) and lost another point.

Another bad loser came on my first trade of the day. I short GHL at the open and lost a quick, clean point.

Also interesting today was the movement in TNH.

When the stock broke $100 on that huge down spike I bought. Problem was that I bought too much.

With my system putting me on liquidation only mode if my P&L even ticks down to -$1500 this stock was simply too volatile for me to be holding as much as I was. I was filled at around $99.75. With my early loss in GHL (and a couple of other less significant losses) I didn't have that much wiggle room. So when the stock traded down to $97, it triggered my account loss-limit and I was left to do only one thing, sell stock. I couldn't buy any more TNH or any other stock. This messed with my head and when it came back close to breakeven, I exited the trade for a small loss and then watched it rise up over $103. Frustrating.

But nothing can match the frustration I felt watching the market rip in the last 30 minutes unable to get involved. I felt like a eunuch or something. It sucked.

The point is however, that I deserved to be sitting on the sidelines because I wasn't trading "right" today. I just wasn't timing my trades correctly and I should have been a little more careful so that I didn't put myself in the position to get stopped out by my system.

I haven't updated everyone on my system loss limits. After my success of the last week, I upped my loss limit. I did this after Wednesday of last week. I upped my loss limit for two reasons... first off, I made some good money and felt aggressive again. It's hard to be aggressive with a $500 loss limit. Also given the market volatility, I thought that my limit was too tight, for exactly the reason that I pointed out in the TNH trade.

Anyway, so today wasn't my day. I took my medicine which was watching the market rip from the sidelines because I had traded irresponsibly beforehand. I hated it. That is something that will stick with me and I'll be more respectful of my loss-limits. When I feel I'm not "on" or the market isn't "acting right" I'll be less apt to churn and burn and more apt to sit and watch for opportunities so I don't die the death of a thousand small cuts.

Here's the stats:

P&L, -$1624
Best, SPG,
Worst, MA,
shares traded, 50,400
30 stocks traded, 12 winners, 18 losers
265 trades

Virtual Office, $2067. Dow, +154.28, 13366.27

Misstrade, $1746 on 3400 shares traded.
HPT, $1500 on 54 contracts traded.
Evolution, $872 on 143,500 shares traded.
OBAT, $340 on 5600 shares traded.
Denarii, $50 on 1000 shares traded.
Bubs, -$817 on 13,600 shares traded.
Me, -$1624 on 50,400 shares traded.

There was a lot of volatility in the market today, but it was a different, choppier type of volatility that is, until 3:30 when the market went straight up parabolic-style.

What I'm getting from these past few days of trading is that the 1460 level on the S&P 500 futures seems to be pretty important. We paused there a few times today and basically chopped around that level. This was also an important level in January because it basically marked the highs just before the February panic. What that means? I don't know. I'm just spitballing here.

Anyway, lets see what tomorrow brings. I'd say that this rally in the last 30 minutes of the day is "encouraging." I'm kind of expecting the market to settle down for the next couple of days with smaller swings. Why? Because the Bulls were freaked out initially, but with a rally like that we saw in the last 30-minutes I'm sure more than a few Bears are freaked out as well.

In short, expect a big stare-off tomorrow ahead of Friday's employment report...

Stock Market Volatility

While the talking heads on CNBC have been blabbering about "volatility" all day long, you'll see that so far, that's not the case.

There has been extreme volatility in housing stocks and in mortgage names, but the rest of the market has been locked in a chopfest.

I'm not saying that we won't see overall market volatility today, but so far, "Clarence, the rodent of stock market volatility" is sleeping in his bed of cotton balls and wood chips.

UPDATE: Clarence woke up. Actually, it was me who was sleeping. Volatility abounds!

Stock Market In A Coma

If you're trading stocks today, watch your ass.

As we move into the middle of the day we are caught in a nasty range. Every time to market dips just below the range, every bear in the world gets short while every bull says, "bargain!" and buys. Every time we peek above the range, the opposite happens.

This is leading to a chop fest on the futures and in stocks. However, if you look at the futures graph, it just looks like a flat line. Market in a coma, I know, I know, it's serious.

Clarence has once again left the building. I expect him to return for the afternoon.

Carry on.

FLASH: There is a fairly feeble attempt to rally the market. However, despite the completely wrecked mortgage stocks, I cannot find much rallying. The AD is still weak. I think we'll have to wait until the afternoon to see if this holds.

Stock Market = Death Machine

The stock market is slaying investors and traders left and right this morning...

It's 10:45 and I am off my lows but having a tough go of it so far... we will see what develops.

UPDATE: 11:05, just went positive on the day. Still, it's a bloodbath out there.

NOTE: TRISH REGAN needs to go away... where does CNBC find these people?

Stock Earnings, 08/01/07

Here is your stock earnings "cloud" for the first trading day of August. This list is heavily edited. Since the market is moving so much I haven't traded many earnings names this season.