Monday, August 6, 2007

The New Pornographers, "Use It"

UPDATE: This song is great. :)

Disappointed... "I Just Missed It"

I started off the morning with a bang. I made two sweet trades on the short side of FED and LAZ and booked the profits. But man, then something just went wrong and I started screwing things up.

I took all of my profits from FED and LAZ and turned them into losses.

Then I turned the losses back into profits.

Then the profits turned back to losses.

Then I got back to flat and took a breath.

I began writing a post that I had titled, "Ben Bernanke To Jim Cramer: Go Fuck Yourself!" and watching Beauty and the Geek on VH1 when I realized that I was damn lucky to be flat and not smoked. I was really angry at myself for not being up more but with the way I was trading, I should have simply been happy to be in the green.

I was in a lot of good trades and got shaken out at the worst times.

I mean, take a look at VMC.

I had 1000 shares from about $92 just before the 11am breakout. From the bottom to the top of the move I could have pulled in 2.5 points. But do you see those "tails" at around 11:40 and then again close to noon? I was shaken out of my position at each of these times. It was frustrating to see it run without me.

Another I really screwed up was FED.

This one hurt even more because it went from being one of my best stocks on the day to one of my worst. I caught a nice short in the morning, but gave it all back and then some by trying to get long. Worst part is, I was correct in my position. I mean, I was initially long a couple thousand at around $39.50 but I kept selling and then getting reinvolved and shaken out. It was awful. Easily some of the worst trading I've done since March.

In fact, that's how I ended up trading all of my positions. I was getting chopped left and right and overtrading. I couldn't let myself hold my longs or my shorts. I was completely mindfucked. Each time I saw a green bar on the futures I thought "here comes the big bounce" and each time I saw a red bar I thought "we're going back to the lows." I had no perspective today. Like a man lost at sea. I was loading up on large positions because I wanted to catch big trades, but I just wasn't trading with the patience to let big trades happen. I was blaming the market, but it was my trading.

Trading is about making money, but that's really not all. It's kind of like a game to me and I want to win it. So yeah, I made money today, but I feel awful about it because I know I left thousands and thousands on the table. I mean, as a trader you also have to derive some satisfaction out of simply trading well. I made money today because the market was great, not because I traded well. So, I feel kind of shitty. I'm sure that makes sense to traders. Others may see that I made $1300 today and think I'm a dick. Whatever...

And while I'm placing the blame for my bad trading completely on myself, I still can't help but wonder about stock action like I saw in AMG at the end of the day.

I'm posting a 1-minute graph here just so it's easy to spot the freaky hybrid trade here. Look at the last two red bars there at the right side of the graph. The stock traded $115.21 and then on a bunch of successive 100-share prints, ripped down below $114.50 in less than a minute... I mean, that'd be fine if the stock was displaying some weakness or something. Instead, it sprang right back up (on even less volume). Trades like this show the problem with the hybrid in my opinion. Moves come out of nowhere for no apparent reason. Not enough volume traded here to warrant a move of 80 cents. In the old days, this stock wouldn't have broken the fig.

Anyway, here's the stats:

P&L, $1313
Best, AMG, $621
Worst, DSL -$614

shares traded, 105,200
38 stocks traded, 17 positive, 21 negative
415 trades

Virtual Office, $10049. Dow, +286.87, 13468.78.

Misstrade, $9285 on 6000 shares traded.
Me, $1313 on 105,200 shares traded.
HPT, $400 on 32 contracts traded.
OBAT, $43 on 2600 shares traded.
Denarii, no stock trades.
Bubs, vacation
Evolution, -$992 on 58,200 shares traded.

Oh man... what a crazy market we are trading.

I was angry at myself all day for missing all of the opportunity that this rally offered. I mean, I saw it coming from 100 miles away in the financials and I still largely missed it. It wasn't easy out there but the opportunity was huge if you caught things right, as Misstrade did.

This was a strange rally. The volume was good, no complaints there... and how can you complain about 287 points, you can't! However since this rally was largely led by the financials, a sector that has been severely beaten down lately, it makes me think that a good share of the buying could have been short covering. One other worrying factor is the AD line... it was about flat. Normally if you see the market take off like it did today you'd expect to see the AD line much stronger.

Anyway, whatever the case, 287 on the Dow is impressive. And, Bob Pisani is on vacation, so that's always good... let's see what Ben and the Fed bring us tomorrow.

Stocks Set To Bounce?

Well, probably not, but since the futures are currently indicated higher, I'll be a bull until about 10:15 or so, when I assume the market will turn and sell off a few hundred points.

Anyway, here are a few stocks that sold off on relatively light volume on Friday. I didn't set up any fancy scan to find this list either... I just used my own powers of observation.


CF and ALB are in italics because they also may enjoy moving average support.

On the other hand, two stocks that have shown remarkable strength during this recent bout of market weakness are POT and GRMN.

Good luck today.

Oh, and there's only one more day to vote in the poll. Will the market hit 12,500 or 14,000 next. Go ahead, place it all on the line and "click it in there."