Friday, January 18, 2008

Velocity Girl, "Crazy Town"

Anticipating A Bottom

For some reason, I got it in my head that we were going to finally have a reversal.

When we couldn't break down to the lows of the day at around 1pm, I took that as a bullish signal. However, the volume never picked up with the little bounce that ensued and when the rally broke, just after 2pm, my P&L went south with the futures.

Of course, we rallied again at 3pm and I got sucked in again.

So the story of my day is simple. I was transfixed on the futures all day. I'm not even going to get into individual stock trades because I was timing my trades from the moves in the futures. I was just wrong about us breaking higher.

So the two day total cost of me anticipating a rally off the lows is up to a little over $1800. Pretty annoying.

This weekend will be a real test for me and my attempts to maintain a more positive attitude.

Anyway, here's the stats:

P&L, -$681
Best, SXE, $218
Worst, GHL, -$227

38,800 shares traded.
26 stocks traded, 10 winners, 16 losers.

Virtual Office, $1449. Dow, -59.91, 12,099.30.

Evolution, $2074 on 31,400 shares traded.
Wincity, $87 on 100 shares traded.
Denarii, $86 on 1000 shares traded.
OBAT, $2 on 13,000 shares traded.
Dehtrader, -$119 on 5250 shares traded.
Me, -$681 on 38,800 shares traded.

Again, we had gigantic volume on the NYSE as we traded about 2.5 billion shares. That was definitely helped along by options expiration, but still, it was a heavy volume day.

Oddly enough, even though we broke the lows of yesterday, the VIX closed down a point.

Evolution had the right idea today. Make money early and leave. Almost to a man, my entire office was up decent midday and gave back from 2pm on. We all got caught trying to catch a bottom.

Picking bottoms in a bear market is not a good game to play.

Anyway, we're off on Monday because of MLK day. Should be an interesting weekend politically as the Republicans hold their South Carolina primary. Also on Saturday, is the Nevada primary.

Good stuff for us political junkies.

Enjoy the holiday.

Art Cashin's Comments

Here's a brief paraphrase of Art Cashin's comments this morning on CNBC. I think he's one of the only reliable sources to listen to on CNBC. When the market freaks out, I pay attention to what he says.

On the big stories today, GE, IBM and OPex.

I see today as a three legged stool. GE, IBM, and options expiration. Two key blue chips reported good earnings but I worry about stamina, we'll know by 11 or 11:30 with the option expiration if this rally can hold together.

On the earnings.

GE and IBM are benefitting from the weak dollar. Helps the multinationals.

On the bond insurers.

However, the bond insurers are screwed. There are problems when the ratings agencies start downgrading the bond insurers. It's a shame. They had a sweetheart business and got into the bad side of things.

On sovereign wealth funds investing in US.

Money with terrific staying power. Looking for a higher rate of return. Money doesn't spring from nowhere though, so there will be less to buy US Treasuries.

In short, Goldilocks is in the ICU sitting up and taking fluids. We'll know next week if she's going to make it.

Morning Links

Good Morning

Time: 6:42
Mood: Incredulous