Thursday, January 31, 2008
NOTE: Don't forget to watch the Democratic Debate tonight at 8pm on CNN. Only Hillary and Barack... should be great! I'll put up an "Open Thread" if anyone wants to comment on it.
OH, ALSO: I know I said I'd have an "around the house" thread up, but I got smoked today and was just busy, so it may have to wait until early next week...
Okay, on a day where the Dow rallied 400 points off the low and where we traded a huge amount of shares, I should have made money.
Especially considering that my first two trades of the day were winners.
I short MA pre-open and covered with a 4.5 point gain. Then, I short X on a spike up and made about 80 cents. So I was up over $600 in 5 minutes.
Of course, it's easy to look back and say that I should have just stopped and gone surfing, but I thought I might be in for a big day and with a $600 cushion, I felt good about my prospects.
So here's what went wrong.
First mistake, buying in anticipation of a trend break instead of waiting patiently for the break to occur. And yes... I make this mistake a lot.
Simply put, I need to be more patient. Had I waitied for the break and test I would have not lost $600 with my first 2 failed trades and I would have had more confidence to hold size for the move when it did come. Instead, I did buy again but with big losses in the stock already I was defensive and had only a couple hundred shares for the majority of the move. I trimmed my losses in the stock, but those losses shouldn't have even happened.
I think what I'll do is at least force myself to not buy a full position ahead of a break. If I want to be aggressive and pick up a couple hundred shares and risk a failed trade with small size that's fine. However, both times I went in early on the stock I had 600-800 share positions. Not a good idea.
Another problem I ran into today was not lightening up winning positions. I think again, that I had this problem because I was looking for "a big day" and not dealing with what was right in front of me, mediocre positions. I got seriously clipped at around 11:45 when the futures ran up on good volume only to pull back drastically in the next 15 minutes. The position that hurt me most at this time was CNS.
I seriously top ticked the stock at around 11:50. I had 400 shares and bought 400 more at the high, right before the stock dropped 80 cents. It ripped my face off and brought me negative on the day.
Instead of getting caught up in the euphoria of the market rip, I should have been lightening my winning position because clearly, the futures were moving into an overbought situation... a pullback had to come. I just wasn't careful here... Another problem? This is a thin stock. 800 shares is too much for me there.
I also had a churning problem today in BBD, my 4th worst stock of the day. Nearly a third of my shares traded went into this "toad" (to borrow Wincity's term) today. In fact, my worst 7 stocks of the day accounted for over half my shares traded today. Considering I traded 33 stocks, that's very bottom heavy volume there... never good.
In general, my biggest problem today was position sizing. I was buying and then adding because I was swinging for the fences and I ended up striking out a lot. If anything, as I size up again I'll need to buy larger positions when I enter but not worry about pyramiding, until I get my confidence with slightly larger positions again.
Overall though, looking back on the month, I did great.
I started the month unemployed after leaving my employer of the last 6 years and shacked up with a new group. I completely remotivated myself, stuck to my new research schedule and starting taking the job seriously again. I learned a new software system in a very volatile market and only had 3 or 4 down days while making over $10,000 in less than a half month's work.
Not too shabby considering my circumstances.
Anyway, here's the stats:
Best, MA, $450
Worst, RWT, -$232
44,400 shares traded.
33 stocks traded, 11 winners, 22 losers.
QUESTION: Is anyone else having issues with Blogger spellcheck?
Evolution, $3384 on 43,600 shares traded.
OBAT, $302 on 9800 shares traded.
Retardo, no trades.
Wincity, no trades.
Denarii, -$125 on 2200 shares traded.
Me, -$654 on 44,400 shares traded.
Dehtrader, -$1435 on 4250 shares traded.
What a crazy day.
We rallied over 400 points from the lows of the day to the high on excellent volume. We traded over 2.1 billion shares on the NYSE and the VIX dropped 1.37 to 26.25.
So why didn't I make money? ARGH!
Anyway, at least Evolution stepped up to save the office and do a sweet repair job on his rocky month to close out in style. Nice work, ET.
I think Denarii summed it up quite nicely when he said, "If I had just held my longs from the morning, I would have tripled my monthly profit." Exactly. Today was a buy and hold type day...
There were some clouds on the horizon at the end of the day though... GOOG missed earnings and just before the close, S&P cut their rating on FGIC and said MBIA and XL may soon get cut.
Looking forward to February. Let's hope it's as trader-friendly as January was...
NOTE: This is the last day I'll report the Dow number with the VO. From now on I'll report the S&P 500 since it's more representative of the overall market.
Also... who will be the new VOer? Details Monday...
Bubs got Clarence on the macedemia nuts again... it's sad.
Unfortunately, I haven't been able to use this volatility to my advantage... quite the opposite really. However, the office is making loot.
First of all, a message from our sponsor:
The IBD says that even if this recent rally holds, there's nothing worth buying as most stocks have yet to form sound technical bases. The process could yet take months.
Now, onto the love.
- Tim Sykes Gives Up Daytrading, Opens Nursing Home
- Where Obama Lived In 1980s New York
- Another Gem From Wall Street Fighter. Simply Put, This Is Hilarious!
- For Only $2 Or $3 Billion Dollars, You Can Save A Needy Bond Insurer. Won't You Help?
- Sadly, Ego Makes Us Act In Crazy, Stupid Ways
- Everybody Can Just Calm Down Now. The FBI Will Get The Bad Subprimers!
- Attitude Trader Talks About Meditation And Its Benefits For Traders. A Must Read.
- Stewie's Blog Is Simple, Just Like The Best Trades.
Wednesday, January 30, 2008
You know, I asked him to do a presentation and he just couldn't get it done. Notice he's now in the cemetery (check the right toolbar), with the rest of the VO has-beens.
Let's just forget about the whole first part of the day. I traded very lightly and was up about $200.
Then, the FED cut rates and the market freaked out.
I generally trade FED days very lightly. While I like to trade when the market is volatile, the FED days typically have this "the market is going to the moon/the market is going straight to hell" type of feel to them that I just can't trade.
Mostly because the market takes the round trip from the moon and back to hell in under 5 minutes.
The fills are often horrible.
So, even after the cut, I traded with small size. I'll detail my trades in one stock, SKF. Readers of "the Fly's" blog know that yesterday I bought some in my LT account at $100.04. I figured, if I lost in the trade I could harass "the Fly" about it forever, and if I made money in the trade, it was its own reward. A win-win situation if you will...
Anyway, these were daytrades though. Completely separate from my LT account. I'll hold that position until the end of the bear market... or 2010.
2:20 Buy 100 @ $97.24
2:26 Sell 100 @ $96.01 (the low of the move on a sell-stop @ $96.50... some fill!)
2:37 Short 200 @ $99.76
2:39 Buy 200 @ $98.77
3:08 Buy 200 @ $95.25
3:09 Sell 100 @ $95.47
3:13 Sell 100 @ $96.83
So as you can see, I left dollars and dollars on the table on both sides of most of these trades. Still, I managed to make $250 in the stock. But man, if only I wasn't so damned skittish.
The reason why I didn't catch the move from 3:20 on was simply because I was waiting for a pullback to enter. This is also why I missed a lot of short opportunities in other stocks. I looked at the SPY and thought we'd maybe form a Head and Shoulders formation before heading lower. Instead, the market traded lower violently and quickly, chopping off the dudes arm.
And like they say in Afghanistan, no arm, no shoulder. Okay, that was in poor taste... let's move on.
So I missed the move. It's too bad, but I didn't want to chase. I knew that it was very possible that the market could moonshot again and I wasn't looking to get squeezed.
After this move, I think it's safe to start trading again with some size. The volatility appears to be back. Since Thursday of last week I've been taking it easy. Hopefully now the volume will come back to the market and trading will be good.
I'm going to get a lot of sleep tonight (after watching the Republican debate) and be at the desk early.
Here's the stats:
Best, SKF, $251
Worst, CBI, -$97
15,600 shares traded.
16 stocks traded. 10 winners, 6 losers.
NOTE: Expect an "around the house" post about me and a valet parking dictator named "Romeo" to drop today or tomorrow.
Sanglucci, $1425 on 47,200 shares traded.
Dehtrader, $1035 on 2100 shares traded.
Evolution, $679 on 55,400 shares traded.
OBAT, $550 on 4800 shares traded.
Me, $421 on 15,600 shares traded.
Denarii, $52 on 1000 shares traded.
Wincity, $38 on 200 shares traded.
Well it was a wild one.
Ben "the beard" Bernanke did not disappoint the markets, cutting 50bp in the FED funds rate and another 50 at the discount window. And the market completely ripped on the good news.
Until it sold off like a motherfucker.
Volume was dead all day but took off after 2:15. The close today was amazing... financial stocks got completely crushed.
The VO did well. Not one red trader today... always a nice way to end the day.
I, for one, am very happy the FED is now behind us. Time to start trading again!
Ex-Senator, John Edwards
I'm guessing this helps BO, as Edwards was an anti-establishment type of candidate.
UPDATE: Just gave his "drop out" speech. Surprisingly, he conceded that he "fucking hates poor people."
This morning, Joe Kernan and a guest questioned Art on a few topics. Below you'll find the questions and his responses paraphrased.
On the FED action today:
The rate of destruction in the GDP was stunning and it bakes a half point into the cake.
On the bond market:
They're overdoing it and they may be setting up for a turn, they're overbought.
Do we test the lows?
I think we have to retest the lows. It takes a few weeks for that to happen, not a day or two. It's a pass/fail type of test.
Are we in a cyclical bear?
Well, Goldilocks is getting a manicure and a complete makeover, but I'm afraid she'll be left standing on the porch when the limo pulls away.
Has the elimination of the plus tick rule increased volatility?
Yes. In the past, shorts were able to weigh on a stock in the same manner that piling rocks on a guys chest will eventually cause him to stop breathing. Now, they sell 'em right down and then they spike right back up, so the elimination of that rule does add to increased volatility.
- McCain Defeats Romney In Florida
- Hey Look! Our Mortgage Brokers Ruined Europe's Banks Too. UBS Writes Down $14B.
- FED Looking To Make People Spend More, Create Bubbles.
- Thank You NYT For Your Biased Article... Sigh.
- Not A Myth: Hot Tap Water Is Bad For You.
- I Found This Yesterday Over At Wall Street Fighter. 40 Great Business Quotes.
- Go Feed The Bull! It's Like Digg For The Stock Market, Only My Stories Actually Have A Chance To Get Published.
Finally, a video. Hillary is going to have to cheat if she wants the nomination and she has no problem with that. The Democratic candidates were not suppossed to actively campaign in Florida due to DNC rules that she ignored. Just another reason for me not to support her.
Tuesday, January 29, 2008
Dehtrader, $1164 on 3600 shares traded.
Sanglucci, $556 on 51,600 shares traded.
Me, $513 on 7600 shares traded.
OBAT, $206 on 11,400 shares traded.
Wincity, $41 on 400 shares traded.
Retardo, no trades.
Volume is really screeching to a halt ahead of the FED meeting tomorrow. We traded about 1.5 billion shares today and the VIX fell. In other words, it was a potentially slow day for traders.
However, I'm not complaining about the volume and the VO did well. There were lots of opportunities in the coal stocks and in the financials. Honestly though, after not sleeping and then waking early to surf, I was in no shape to trade actively.
My brain felt like mush. Besides, I had an blog war to wage.
Who knows what happens tomorrow. I still think the cut last week was to support the plummeting market. That was a mistake. Whether "Ben The Beard" admits that mistake by not cutting tomorrow is the question.
Today, Mr. Kneale claimed that we are neither in a Bull market or a Bear market, but rather, a "Gazelle's market."
He says everyone is scaring everyone else... like gazelles.
According to Mr. Kneale, 62% of Americans think we're heading into a recession. Why do so many think we're heading into a recession? Because the media keeps telling them so.
Really? It's that simple? Was the media responsible for all past recessions as well? Or does the economic cycle have anything to do with it at all?
I think so many Americans think we're heading into a recession because they know their dollars buy less, their houses are declining in value and in many cases, they're not even able to sell their houses because buyers can't get credit.
Meanwhile, gasoline, energy and food costs are skyrocketing.
I don't think people are such lemmings to listen exactly to what the media says anymore. In any case, I hope they're not.
Let's never forget what happened the last time we listened, without criticism, to the media...
I don't normally respond to skaters/stoners, but because Danny got all high and mighty on me yesterday, I figured a response was in order.
Regarding the now famous "Dennis Kneal Idiot Controversy," Danny wrote the following as his argument why Mr. Kneale didn't read my blog, but rather his blog.
Clearly, Danny feels he's the rockstar over at IBC... "our traffic," HAHAHA!
I’m not giving DT credit because I never saw that post and it didn’t influence mine at all, so he doesn’t deserve it from me.
DT’s post was about how Buchanan tore kneale a new one…compared to me, who sacked up, and tore kneale a new one myself.
Although the same picture and topic of discussion is a coincidence. FWIW, image search dennis kneale and you’ll find neither of us scoured hard for that asinine picture of him.
I think he was calling out my post because our traffic trounces his…I am willing to entertain that someone on the street reads the fly who linked me. No offense to DT, but I doubt his note caught the attention of wall st. pundits.
However, the numbers tell a different, more sobering, story. In fact, the sheer weight of this story could break all of Danny's little skateboards.
Check out the traffic at "the Fly's" old blog.
Very, very impressive.
Okay, now check out the new traffic numbers.
Still very impressive. While it's true the page views have doubled, recall that at "the Fly's" old blog there was only one page to view for all of his posts. Now, you have to open a new page to read each of his posts.
What's telling is the total number of visitors. In October of 07, the last month of "the Fly's" old blog, he had 117,000 visitors. In January of 08, he has yet to reach that amount with one day remaining and fell short of that total in November and December.
In short, the existence of Danny has done nothing to bring new visitors to the site.
So let's talk about page views. Assuming "the Fly" is still responsible for the amount he was bringing in in October (which I doubt given his recent market calls, I'm sure his personal traffic is up), that leaves us with an extra 180,000 monthly, and 6000 daily, page views for which Danny could claim responsibility.
But there's one problem...
Those 6000 extra daily page views are spread out across "the Fly's" blog, Woodshedders, Dannys, and the Peanut Gallery. Since Ducati and "the Rage" are so new to IBC, I won't include them here. However, even if you assume those page views are evenly distributed across the blog, (which they're not, they all go to Woody's blog and my posts in the PG) that would yield about 1500 a day for Danny.
In the last week, twice my third tier blog hit 1500 page views and twice they were over 1200. So Danny's blog is hardly trouncing mine. Especially considering Danny has a "third tier blog inside a first tier blog."
My point? While it's indeed very possible that Wall Street pundits are viewing "the Fly's" blog, it's not at all clear that they are going "all the way over" to Danny's tab to read his highly informative posts.
Danny's "traffic trouncing" argument holds no water. In fact, it's very telling that "the Fly" needed to point out Danny's post on his own blog.
DT wins again.
UPDATE: This whole argument could be moot. Apparently, Barry Ritholtz was calling Kneale an idiot (in a nice way) way back in the summer of 07.
I received the following in my bulk folder this morning...
His courage, he fixed an arrow in his bow.' lord very soon.
. . . I heard from the nurse attendant gave of the figure
they had seen made it seem me sae! But i s' hae a grip o'
'im yet, or my like that. And two whatyoucall 'em paternity
cases, it was here the council, solicited by thomas morris,
of its citizens, and died soon after he went away. Kansas,
pp. 352, illustration: james h. Lane. Crichton. Certainly
not, my lady. The utmost i martins last email. It was short,
Monday, January 28, 2008
Or Danny's? We'll probably never know...
However, not only was my post up 6 hours before, but I also have a history of calling Mr. Kneale an idiot.
For example, a simple search on Google yields this.
Oh, and in the comment section of my post, I even asked Mr. Kneale to respond on air to my post.
So while it's true the traffic numbers at IBC are a multiple of mine, I'd argue that it's probable he found himself here. In fact, after watching the clip again, it seems obvious.
If so, welcome Mr. Kneale. Thanks for reading. Of course, you're welcome to weekend blog here to defend your honor.
Denarii, $67 on 2200 shares traded.
Wincity, no trades.
Sanglucci, -$126 on 20,400 shares traded.
OBAT, -$329 on 17,600 shares traded.
Me, -$340 on 20,600 shares traded.
Dehtrader, -$1474 on 3360 shares traded.
Sanglucci summed it up... "What a shitty day!"
I'll have to elaborate more later... need to head out for a bit.
NOTE: No Daily Post tonight... I got home too late to want to analyze much. Meanwhile, I'm surfing early which means I need to do all my research for tomorrow, tonight.
Pat Buchanan, a man I rarely agree with, just eviscerated this idiot on CNBC who, like Larry Kudlow, claims that "we're talking ourselves into a recession."
He told Pat Buchanan to stop worrying about the economy and "sell the hope."
No, I'm not making that up.
Go buy stuff you stupid lemmings, forget that your dollars are worthless, just keep tossing them at shit you don't really need so we can continue to fund our wars.
Fuck these idiots.
Okay, now back to positive thinking...
- US Economy Going Down In A Blaze Of Glory, Dragging World Down With It
- Europe And Asia Trade Down... HPT Doesn't Blow Up This Time
- A Brief History Of Rogue Traders
- Senator Ted Kennedy Endorses Obama... Is This A Good Thing???
- Bloggers Get No Respect From Big Business, Or, The "Crotch Bullseye"
- Alphatrends Potential Setups For Monday, January 28th
Sunday, January 27, 2008
Congrats to Ragin on "gettin' tabbed!"
Saturday, January 26, 2008
It's a 17 minute speech. If you can't watch the full thing, you can start it from the 4 minute, 10 minute, or 13 minute marks. If you really have no time at all, at least watch the last minute and a half or so...
I don't normally do link-whoring weekend posts, however this was one doozy of a week and Jon Swift has me convinced I should be linking more liberally.
So, let's do this chronologically.
MONDAY January 21, 2008
Martin Luther King day, so the US markets were closed, but this is what the futures looked like. Complete carnage. Beanieville had a nice summary of the bull and bear arguments. Apparently, the bears were winning handily...
This washout led to our first and most famous trader blow-up of the week. HPT lost $31 grand, posted this now famous video, and became an Internet sensation overnight. Go ahead, watch it again... let's see if we can push it over 400,000 views.
Now there have been many theories bandied about for why the futures got so slammed. There is, of course, the rogue trader theory. However, let's talk about something that was only briefly mentioned and never discussed again... the Ducati theory.
I mean, if you've been following along for the last year, you've seen what seemed like intense dislike blossom between "the Fly" and his arch-nemesis, Ducati. Yet on Monday, "the Fly" with a very "third-tier" window display, tabbed Ducati. Perhaps there was advance knowledge of this move over in Europe... I dunno. All I know is that Ducati was tabbed and the market nearly crashed.
My personal theory on the futures selloff is The Dr. Brady Barr, "biggest idiot ever" theory. On Sunday night his infinitely idiotic "special" where he dressed as a hippo, hung out in a hippo field and then got freaked out about it aired on NGC. Then the futures sold off... seems pretty clear cut to me...
So on Monday, the futures closed near their lows... I think. Anyway, this isn't about market analysis. It's about link-whoring. Overnight, the futures went limit down and on Tuesday, we woke up to great fear and panic.
TUESDAY January 22, 2008
See that flat line between 2am and 4am? That's when the market died. As Art Cashin so aptly put it on Friday, Goldilocks was in the ICU and taking clear fluids. So early Tuesday morning, she died and, not ironically, she was killed by a bear.
Anyway, thankfully, "Ben the Beard" came in with a not so surprising "surprise" rate cut just after 8am. That's the green line. Goldilocks wins again!
Unfortunately, such volatility totally crashed all of the models that the team over at Move the Markets took so much time developing. Trendlines failed, blips blopped, and overall mass hysteria set in. Prospectus, even though he no longer trades, lit himself on fire to protest the pain others were feeling in the markets. It was an emotional day.
Oh, also on Tuesday Ragin Cajun, egged on by the perma-bullishness of Sloth over at Wallstreak, said Apple would hit $400 in a matter of weeks.
And another stock market blogger blew up, but it took 2 weeks for anyone to discover the body.
WEDNESDAY January 23, 2008
Wednesday was the kind of day that traders will talk about 5 years from now. It was probably a year-maker for many. Still, that didn't stop another blowup from happening as VO member Dehtrader, blew up his account. Another indication of the day's volatility was that fellow VOer, Wincity, used the word "toad" 327 times in a single post.
Blogging mayhem ensued, as Option Addict poked fun at certain bloggers, while those certain bloggers poked fun at other more famous, bloggers.
Even the CNBC anchors who normally stand together to pump the markets, fought like schoolchildren.
In every sense of the word, Wednesday was an emotional shitstorm.
In fact, due to all the crazed energy in the markets, Dr. Brett's blog melted and Dr. Brett was said to be "hitting the sauce" at a local watering hole.
Meanwhile, Shane laughed through the entire ordeal, like a mad buddha.
Oh, and finally, due to the market move, Ragin Cajun upped his target on AAPL to $600 a share.
THURSDAY January 24, 2008
After all of the fireworks of Wednesday, Thursday was bound to disappoint.
In fact, about the only thing I found interesting was the "subliminal message" I heard in Brian's stock market technical analysis review. Listen closely... in the middle of the video, a woman whispers "If you can hear this whisper, you're dying." True story.
Oh, and Ragin Cajun, spurred on by the ultra-bullishness of Sloth over at Wallstreak, raised his target on AAPL to $827 a share.
And another stock market blogger, blew up.
FRIDAY January 25, 2008
On Friday, the market suffered another bloodletting.
Indeed, by the end of trading on Friday, despite all the rate cutting and confidence building of the past week, the Dow found itself near 12,000... again.
Still, there was a lot of joking going around in Blogdom. HPT posted a parody video of himself and 12,000 crazy lunatics came out of the woodwork to call for his head, while Dehtrader, in his understated way, also poked fun at himself.
No DooDahs reminded us that we're freaking paranoid but also reminded me about my favorite press conference of all time. Still timeless...
In short, with the FOMC meeting next week, anything can happen. I can't imagine it being more eventful, but we'll just have to stay tuned.
Check back here often for your updates.
Friday, January 25, 2008
I received the following in my bulk email folder...
You were fond of roderick welman? Very fond. He is not so
inexplicable as it would otherwise be. 'when was this will
drawn up?' 'oh, about a year declared, that we ought not
to be that, aynesworth paths unworn, and the houses still
sweating from each help the other! The girl shook her head
with girl half querulously, but in such lovely speech school.
she was a sweet and lovely person. Very that this time it
was the big elderly square man what i ought to have known.
i knew verity, but.
I woke up this morning a little late and rushed through my research. By the time the market opened, I just wasn't feeling "aggressive" enough to trade actively. The office jumped on the long in the coal stocks, which was amazing but I missed the whole move.
I mean, take a look at CNX... 8 points straight up.
So, I started looking short.
As it turns out, my top 4 stocks were all coal stocks today and I traded them all exclusively on the short side. ANR, CNX, WLT, and MEE. I didn't make loads of money in any single stock, my biggest winner was ANR and I made $252 in him. The key for my success today was keeping things simple. I also kept my volume really light.
I looked around and didn't see a whole lot else going on, so I just focused on the coal sector because it was moving so much. And I figured the volume was lighter today so I thought limiting my focus to just one sector was a good idea. In fact, it made the day seem really easy... perhaps I'm onto something there.
Anyway, so I'm turning the computer off for now. I'll be here all weekend. Stop by.
Here's the stats:
Best, ANR, $252
Worst, TIF, -$39
14,000 shares traded.
12 stocks traded, 10 winners, 2 losers.
Dehtrader, $1372 on 3100 shares traded.
Evolution, $1122 on 82,800 shares traded.
Me, $817 on 14,000 shares traded.
Sanglucci, $538 on 11,800 shares traded.
OBAT, $187 on 8700 shares traded.
Denarii, $90 on 1800 shares traded.
Wincity, $70 on 100 shares traded.
Aw, look at that... it's like, the Virtual Office feel good edition.
All the traders who got a little smoked this week died and ended up in VO heaven. Meanwhile, everyone else finished green too. Perhaps I should just shut this blog down now while the vibe is so positive.
Anyway, we traded below 2 billion shares today on the NYSE for the first time since Tuesday. However, due to a mid-afternoon selloff, the VIX ticked up again, to 29.11. Good stuff.
With the "rogue trader" theory of FED cuts hanging over the market, I'd be very concerned about what the FED says next Wednesday. The volatility is here to stay right now. However, what's great is that it doesn't feel like the world is about to end anymore like it did just a few days ago. This means that there could be plenty of buyers around to provide nice bounces here and there.
I have no plans this weekend so I'll have more weekend posts than normal. Tomorrow is an important Democratic primary (South Carolina) so it could be an interesting day. Please stop by.
Also, since it was such a memorable week, I'll make a big link-whoring post full of some of the week's highlights.
- More on the now famous, "Rogue Trader."
- Thain is afraid of fraud but not robots... go figure.
- Wilbur Ross to buy Ambak? I'll take vulture capitalism over a bailout any day.
- Another $18 billion writedown from Citigroup? Why not?
- WSJ to continue charging for content. I think that's silly.
- Bill Gates: Nerd, Billionaire, Philanthropist, Sex Addict.
- The AI is breaking out!
Thursday, January 24, 2008
In keeping with my attempts at being more "professional" and more "focused" in my work, I've also been trying to read topical stuff when I'm not working; books about finance and financial stuff.
Right now I'm reading "When Genius Failed" about the rise and fall of LTCM and after that I have "The Black Swan" ready to go. I'm simply trying to "immerse" myself in financial stuff, but in a positive way.
I'm looking for finance books that are fun to read. If you have any suggestions, please leave your favorite in the comment section below.
I expected things to be churny today. Unfortunately, I was right. Although, I can never tell if it works out that it's more of a self-fulfilling prophecy...
After making decent money in the early morning, I gave it all back and went negative thanks in part to a bad decision I made sizing up in PCR.
I bought 1000 shares as it traded down to $34 at around 10:00 am. With other stocks in the sector, namely FLR and FWLT ripping higher, I thought it was a decent risk. I figured he'd find some support near the opening price, but he didn't. So I lost a quick 30 or 40 cents.
To use a toddler phrase, "it ouched me."
Luckily, despite some cursing, I caught nice shorts in DE and FLR to bring me back into the green. But the truth is, I just couldn't get real traction today. I was up $1000 at around 10:45 and just churned it all day long losing $40 here, and $80 there.
I also noticed that lots of good traders were struggling in the chat room as well and so I took a cue from that and decided to call it a day.
There are many aspects to being a good trader. Confidence and money management are huge. It's not just about picking the right places to buy and sell. I've been working on thinking more positively and growing my confidence.
So, while I don't normally stop trading in the middle of the day, I'll take my $652 and be happy with it instead of struggling to "get back to my highs." That would be forcing my hand in this market and for me at least, it would be a mistake. Score one for discipline... not one of my strengths.
I'm just not feeling it right now and I'm afraid this may be the new normal for the next few days.
Anyway, here's the stats:
Best, FLR $394
Worst, PCR, -$308
Evolution, $1005 on 60,500 shares traded.
Me, $652 on 24,200 shares traded.
OBAT, $523 on 15,400 shares traded.
Dehtrader, $402 on 6900 shares traded.
Akalawoo, no trades.
Retardo, no trades.
Misstrade, no trades.
Denarii, -$12 on 2200 shares traded.
It was definitely slower today. However, I want to send a special message to Melissa Lee.
She's sitting in for Maria, so I assume she feels the need to be annoying. I won't even start on her voice...
Anyway, between 3 and 4 she said on 3 separate occasions that "volume was really, really light." No.... we traded over 2 billion shares today... that is not anywhere close to light. Where was she for the last 4 months when we were trading 1.3 and 1.4 billion shares a day regularly?
Seriously... CNBC needs to find informed anchors. It shouldn't matter if they're fat and ugly. They just need to know about the market. Otherwise, the channel is useless. Let FOX have the sexy stupid anchors... CNBC has the opportunity to corner the market on "smart" financial TV.
Okay, enough of that.
So we traded almost 2.2 billion shares on the NYSE but the VIX headed downwards. It felt really choppy out there despite the volume. After the first hour of trading the futures were ruthless mostly chopping around in a 10 point range.
Check the links below. I find this new "rogue trader" theory very interesting. Should it be true, then as "the Fly" pointed out there is absolutely no reason to cut rates again next Wednesday. A non-cut could make the market interesting again...
Greenspan Disputes US Recession Signs
The Rogue Trader Theory (h/t Ducati)
First of all, something to think about from today's IBD:
The nine biggest up days in Wall Street history all occurred during the bear market of 2000-02.
- Hopefully, this guy will find his way over to my old company, and blow them up too.
- The ECB is still talking tough. No interest rate coming.
- A new presidential poll is out and it shows Obama gaining. My wife's grandmother is supporting Obama. She's an 85 year old conservative Italian who has never voted Democratic in her entire life. I'm just saying... he's a true "uniter."
- If the Bond Insurers go you may want to build that bomb shelter and start hording food.
- Sometimes the truth isn't so exciting. Brian at Alphatrends speaks some truth.
- Do individual daytraders make money? Dr. Brett digs deeper.
Wednesday, January 23, 2008
I have a hard time going back on a day like today and making sense of my trades.
I mean it's tough to remember that at 12:30, it felt like we would be dining in hell again.
Just a few short hours later, people are ready to max out their credit cards and buy properties in Florida.
The stock market is filled with humor if you look at it in the right way. Basically, people are silly. "Human nature" is hilarious.
Anyway, the good news for me is that I didn't wait for the big afternoon rally to start making money. I was up $2000 by 10:30 due largely to an unbelievable long in FED.
This was a good and bad trade for me. Good in that I held 200 shares for the full 4 point move. Bad in that I sold out of another 500 shares between $32.40 and $32.80. But looking at the positives, I caught this one right.
You'll recall that a couple of days ago I posted stocks with high short interests. These were the stocks I was focusing on should we get a rally. This strategy really paid off. I know loads of stocks ripped today, but the moves in FED, JLL, CNS and ABK were ridiculous. Just having it in the back of my head that these stocks had heavy short interests helped my confidence level when trading them.
In short, my recent focus on research seems to be paying off in terms of helping my confidence level. I'll keep at it and the lame "good morning" posts.
So I sat on my $2000 early morning gain for the better part of the day. I churned a bit making a losing money, but not too bad. After giving back in the middle of the day recently, I cut my size so I wouldn't get too hurt.
The afternoon rally worked like this. At first, it really started on low volume and I was only a little involved. but take a look at the volume spike at 2:50 or so...
That spike told me not to worry too much about the 1x2 quotes on my screen. There were robots buying the market. They didn't show up in individual stock quotes, but they were there buying stocks with abandon.
So I started buying stocks with abandon. Not really... I'm still taking it easy... but I bought enough for now.
My two best afternoon trades were in OMG and JLL.
OMG was a break of the downtrend play. Here's a 30 minute graph where it shows up nicely.
I picked it up around $51.25 or so. It was a choppy trade, so I got shaken out a few times and had to reenter. It was pretty, but I made $700.
JLL was also a downtrend play, but it had the added benefit of being a short-squeeze play.
Here's the daily.
Unfortunately, I only had a couple hundred shares of this one. This stock trades thinly and frankly, it freaks me out a little. So, I took it easy.
Anyway, like I said in the VO post, I have a feeling trading could relax a bit up until FED day next Wednesday. That's not saying too much though since trade has been absolutely nuts. I just don't think we'll be trading over 2.5 billion on the NYSE again for awhile and I also think the VIX has topped out for awhile.
Still, it's earnings season and there's still lots of uncertainty and headline risk. Should be plenty of opportunities.
Here's the stats:
Best, FED, $1677
Worst, MEE, -$119
45,600 shares traded.
34 stocks traded. 25 winners, 9 losers
Me, $6442 on 45,600 shares traded.
Sanglucci, $2900 on 39,000 shares traded.
Evolution, $1028 on 12,200 shares traded.
OBAT, $681 on 12,800 shares traded.
Dehtrader, $248 on 7180 shares traded.
Retardo, no trades.
Akalawoo, no trades.
Denarii, -$70 on 1600 shares traded.
The market rallied 600 points from the bottom on unbelievable volume to close up 300 points on the day. This was the catalyst. The bond insurers getting a bailout.
A trader's paradise.
As "obvious" as the rally seemed at 3pm when the robots couldn't hide their volume with diced up 100 share orders, it was nonetheless somewhat hard to hold. Stocks were taking fairly wild swings, shaking traders out left and right. Of course, if you bought early enough, you had an easier time holding... if you missed the early part of that rally it was probably somewhat frustrating.
A short term bottom is in. Unless we get hit with disastrous news, we should be somewhat safe here... if the FED cuts by 50bp next week, we could be off to the races for awhile... if they don't we could revisit the lows. We'll see.
This bonanza may tail off a bit now. Still, with earnings season upon us there should be plenty of opportunities. It's all about January 30th and "Ben the Beard."
Tuesday, January 22, 2008
By now, most have you have seen HPT's dramatic blow up video that I posted here the other day. Unfortunately, youtube removed it because he dropped the f-bomb about 3000 times in 10 minutes. Incidentally, I think it's silly that youtube allows kids to post videos of them beating each other up but will remove a video for using the word "Fuck."
That's seriously stupid.
Anyway, check the video below for what HPT learned from his blowup.
Also, kudos to him for using his now wideranging Internet exposure to tout a few charities. Not like I'll donate or anything... but still, it's nice.
And finally, check Tim Knight's parody video of HPT. FUDGE!