Tuesday, February 12, 2008

My Daily Research Schedule

UPDATED: 02/12/08

When I first started trading, 9 years ago, I'd wake up at 5:30, and be in the city by 6:30 sitting in the atrium of the JP Morgan building reading the newspaper while eating my breakfast.

I didn't go into the office right away because I didn't want people to bother me.

I sat in the JP Morgan building because it made me feel more "Wall Streety."

Nowadays, I sleep until 8:00. Or, when I wake early, I piss a lot of time away on email or reading idiocy on stock market blogs.

Well, new year, new company, new market. It's time for me to take this job seriously again.

In December, I deserved to lose money because I wasn't working hard enough. If I lose money now, it's not going to be due to poor work ethic.

Some things I can't control but my work ethic is not one of them.

So here's what I'm doing. I'm going to make a strict schedule of research that I adhere to each day. It will help me focus.

However, the first thing I will do each day is to create a simple "Good Morning" blog post. This will put at least a little pressure on me to get in and get the post up each day. It would be shameful to admit to myself and my 3 readers that I lost money because I got to my desk at 9:24.

So here, is my new research schedule:

1. Morning post.
2. Read IBD Big Picture.
3. Read Bloomberg breaking news headlines.
4. Read Bloomberg "Stocks On The Move."
5. Check front page of NYTimes and WSJ.
6. Link-love post.
7. Morning stretches.
8. Breakfast and shower.
9. Watch Alphatrends daily "Stock Market Video Technical Review."
10. Read Briefing Live In Play from previous day's close.

Now for some graph work.

8. Check BigCharts' "big movers reports." Especially the largest % gain in volume.
9. Go through index graphs like SOX, XBD, XOI, etc.
10. Go through each stock on screen.
11. Write "one idea" post.

After all of that, (I figure it's 3.5 hours worth of work) I should have an excellent idea of the general tone of the day and what stocks could be moving.

If you have any other suggestions for research, please let me know via the comment section.

Stevie Wonder, "Signed, Sealed, Delivered"

Looks like Obama is winning again... Hmmm... remember this pre-primary post?

Just Missed A Big One...

At 10:00 am, I started writing my fellow office mates about ALB. All of the chemical stocks were strong. ALB had gapped up at the open and traded near $39 and then traded off on light volume to $38.50. I started to pick some up and built up 700 shares of stock by the time it traded back up to $39 by 10:15.

To be cautious, I sold 300. I figured it would trade $39 and then pull back a bit before advancing higher. Of course, I wasn't expecting the move that developed.

Shortly after the stock traded over $39, news hit that BASF, a German company might make a $4.9 billion bid for Albermarle.... I was bullish already, and this made me even more bullish, but I had just sold another 200 shares at $39.40. With only 200 shares remaining, I didn't want to buy more and completely screw up my cost basis while the stock was spiking. It was frustrating on a certain level, but nonetheless, I was happy to catch a good move.

The fact that I had 700 shares at about $38.80 and only made $494 in the stock is a little depressing since it never came back to that level. Had I bought, left my desk and closed the position at 3:59:59, I would have made about $700. Again, I screwed up my exits.

I'm working on it.

I also had a nice trade in ESI early when I just about bought the bottom. Here, I made $400 on a 500 share position, so I did much better with my exits.

And the coal short was a thing of beauty today. Check out the index. The problem is that I was a little "early" to this trade. All told, I only made $300 in my coal shorts despite the massive reversal.

I'm happy with my bounceback after 2 bad days in a row. I need to keep working hard and staying positive. I also used a higher percentage of limit orders today versus market orders.

Meanwhile, I have a couple of new ideas for the blog.

First, I'm going to update my daily research post to include stretching. If you trade all day every day, you need to stretch. Since I think this is very important, I'm including it in my research post so I make it part of my routine.

Second, I'm going to try to come up with an idea each day to trade and post it on the blog between 9:00 and 9:15. It will be a simple post with a stock or sector to watch. That's it. No buy or sell recommendations, just a stock or sector that I think will be on the move. I hope that including this post in my daily repertoire will help force me to crystalize my research into concrete ideas.

This blog is a wonderful discipline tool for me and I'll continue to use it in that manner. Hopefully, it helps you as well.

Here's the stats:
P&L, $1286
Best, ALB, $494
Worst, ACI, -$167

23,400 shares traded.
16 stocks traded. 10 winners, 16 losers.

Virtual Office, $7131. SPX, +12.30, 1350.50

Evolution, $2653 on 91,000 shares traded.
$1286 on 23,400 shares traded.
Dehtrader, $1180 on 4430 shares traded.
Sanglucci, $1027 on 26,400 shares traded.
Equine, $430 on 5600 shares traded.
Ducati, $302 on 3200 shares traded.
OBAT, $243 on 12,200 shares traded.
Wincity, $10 on 200 shares traded.
Misstrade, no trades.
Retardo, no trades.
Timmay!, -$150 on 700 shares traded.

I think my metrics for figuring out if it's a good day or not, volume and volatility, are somewhat imperfect. Today we traded less than 1.5 billion and the VIX dropped, yet most people in my real office and in our virtual one, made decent money. Go figure.

Perhaps it has something to do with Ducati joining the VO.

Despite the somewhat lackluster volume, the indexes had nice moves. The Dow dropped 150 points from 3 to 3:30 and then bounced hard. The coal stocks ripped in the morning and then had complete reversals... there just seemed to be good movement.

Guys in my office were looking forward to tomorrow. They expect the volatility to come back. We'll see. I hope they're right.

Ducati Joins The VO

Much to "the Fly's" chagrin.

Check the exclusive footage of his first day, below.

Old man his way of getting rid of a little stress - Watch more free videos

Meanwhile, if you haven't checked it out already, you can see plenty of dry analysis at Ducky's blog here. I'm happy a member of IBC has joined the VO. In time, I will annex all of the "tabbers" from that shithole of a blog.

Eventually, "the Fly" be reduced to a weekend blogger here. Except I'll only let him write posts on Saturdays. Sundays I'll hold multiple votes where my esteemed and rapidly growing readership can vote to "shitcan" him, over and over...

Trading And GOD (not to be confused with Mike Huckabee)

I didn't realize that Boomer was adding to this thread each day. I think this is really interesting. He's taking a month off from trading and posting his insights over at "the Fly's" blog.

Good stuff.

Art Cashin's Comments

I only caught the end, but here's a brief paraphrase:

On testing the lows of January:

I believe a retest of the lows is still in order. It would be better for the market as it would give people more courage to really buy in here.

On Buffet buying the muni bond portfolio of MBIA:

It's reminiscent of JP Morgan during the Panic of 1907. If it works out, it's a great deal for him.

Obama's Picture

I've moved it to the bottom of the right hand toolbar. Not because I no longer support him, quite the opposite really. Instead, it's clear that my support has propelled him into "front-runner status."

He doesn't need me as much. It's sad in a way, but fulfilling in another.

Meanwhile, does anyone know how I can unlock the sweetness of that huge blue area on the left of my page? Seems like lots of wasted space.

Morning Link-Love

Good Morning

Time: 6:32
Mood: Positive