Daily Show Does Subprime

Good stuff.

Hopefully, when I figure out that I've failed as a trader I can try and fail as a writer for The Daily Show. That's my dream really... to be a failed comedy writer. Ahhh.....



NOTE: I won't be here in the early morning... waves too damn good to do research. Instead I will be surfing. So I plan on getting to my "desk" at 9:15am, taking a glance at the futures and firing off a bunch of orders pre-market. I will then close all of these orders out at 9:40 and start a book I've recently purchased about "losing your ego."

You see, that's the beauty of the money I made these last couple of weeks. Now I can afford to buy books. Because I plan on being poor again in the near future I am stocking up on books about spirituality. This way, even if I am poor I will be spiritually superior to you, "Rich Wall Street Man."

Yo La Tengo, "Sugarcube"

"Are you scared of making money?"

A Real Snoozer Until...It Wasn't

After all of our recent excitement, today qualifies as a real snoozer.

My best and only really interesting trade of the day was a short in FED.



This was a risky trade because I initiated my short while the stock was still rising around the $46.75 level. However, I added slowly and was watching some of the other mortgage names, MTG, DSL, RWT and JLL come off their highs. FED just took a little longer to melt. I got more than half my position off above the $47.50 level, so I scaled in smartly.

I covered some around $46.50 and the rest down by $46. I pulled in a little over a grand on the trade.

Other than that, I really just took some small scalps on either side of the market. We were rangebound all day long so I worked on my patience and didn't trade too much. Had I done the same yesterday I wouldn't have missed out on all the fun post 3:30. But anyway...

I hope this doesn't put an end to all the volatility. I don't think it does. After yesterday's crazy short covering into the close I figured we might see a day like today. I'm writing this post at 2:30, so who knows how we'll end. The market is having a tough time moving in either direction. That employment report tomorrow could be a big deal and perhaps we'll have to wait until then for more movement.

Anyway, the dog days of summer are here. It's 90 degrees outside and I'm not sticking around. Off to the beach for some surf and dinner with friends.



UPDATE: Okay, so I wrote that part of the post at 2:30 and I thought I was done for the day. I should have been because I just gave back half my gains in that nasty "rally" at the end of the day. I'm sure I'm not the only one, that was messed up. Check out what happened at the end of the day. I got chopped in TNH and in MA... and I don't think there was one stock that you would have been safe in... fucking robots.

Here's the stats:
P&L, $487
Best, FED, $1075
Worst, MA, -$405

shares traded, 29,000
19 stocks traded, 5 winners, 14 losers
160 total trades

Virtual Office, $2145. Dow, +100.96, 13463.33.

Evolution, $887 on 134,200 shares traded.
HPT, $500 on 20 contracts traded.
Me, $487 on 29,000 shares traded.
OBAT, $271 on 5800 shares traded.

Off to the beach. I'll post more later.

Hybrid Market Integrity & The No-Uptick Rule

A very interesting "Stop Trading!" segment on CNBC with Cramer this afternoon.

If you missed it, here were a few key comments.

Erin and Jim spoke about the integrity of the market right now.

Cramer said today is "exactly like October 1987" in that you "cannot trust the prices." Cramer claimed that the market was in "incredible disarray" and that he has been "refusing to trust the quotes" and that it has really effected the "homegamers" because they "haven't been able to trust the pricing this week." Bottom line, he claims we couldn't trust the market in February (when the Dow melted due to a computer glitch) and you can't trust it now.

While they didn't mention the hybrid market outright, Cramer has been railing on it lately and I'm sure this is what he was referring to.

Also, and this pertains to some conversations that we've been having at "the Fly's" blog recently concerning the now dead "uptick rule" Cramer claimed that all of the action in BZH yesterday was due to "bear raids." As he explained, "You can drive any stock down because of the no uptick rule." Erin concurred and stated that the no-uptick rule was "causing a lot of the troubles" of the last week.

Interesting stuff indeed. Perhaps Cramer has been reading this blog. I've been all over the "freaky hybrid trades" from the beginning. It's about time it's getting a little more notice from the main stream media.

The Clash, "Complete Control"

It's been awhile since I posted some music. Since it's hard to see who's in control of this market, I figured I'd give up and hand the control over to the Clash. Enjoy!

Lycanthropy

A tip of the hat to Jake Gint for this gem.

lycanthropy: n. 1. a mental illness in which one imagines oneself to be a wolf. 2. the magical power to transform oneself or another into a wolf. lycanthropic, adj.

It's Quiet

As I predicted yesterday, I think that huge run-up at the end of the day took the juice out of this market for at least a little while.

This morning, we are witnessing a tug of war between the bulls and the bears with neither side really gaining an edge. For now, with the Dow up 30 points, you have to hand it to the bulls because the market digested the huge afternoon run from yesterday and is holding on.

However, volume is currently running at lower levels than it did yesterday, so conviction to the upside may be lacking. Time will tell.

I'd be very surprised if we didn't see the market take a dip at some point to test yesterday's rally.

As for my trading, I've made a good chunk of yesterday back and I'm watching to see if we can break out of this tight morning range one way or the other.

NOTE: Dylan Ratigan just schooled Herb Greenberg... nice!

Stock Earnings, 08/02/07

Here's your stock earnings "cloud" for Thursday, August 2nd.

AG-BEC-CEDC-CHE-CIR-FRT-FCL-GPRO-GSF-IVGN
ITRI-NTG-OII-OSK-SOHU-SPW-SUN-TK-TTEK
RIG-USMO-WTW-WSH-WYN-EYE-ATG-ATK-AIV-RATE
CNQ-CPLA-DNR-GET-GNK-ITG-KBR-MAC-MGM-NRG
NYX-OMG-PPL-PWR-RRI-RDC-SRE-HOT-SFY-UNT-WCG

The poll I've added on the right sidebar is pretty evenly divided so far. I think we can expect to see that type of division in the market today as well.