For Valentine's Day.
Thursday, February 14, 2008
For Valentine's Day.
I had a nice trade today in UBB. Of course, it could have been better, but I'll take it as a sign of progress.
It gapped up this morning on (what I thought was) no news. However, after 10:00 they reported earnings. Still, BBD and ITU were weak to flat as were the rest of the financials. So I felt comfortable getting short. The reason why it worked out as a good trade was because I got short at good prices, around $131.80 and didn't panic and cover one I had small gains. Instead, I held for awhile. I was short 500 shares (a good amount in this lunatic) and only covered when I thought the stock might hit support.
So my first covers were around $131 since he had found support there early. I also covered a little in front of the opening range low in case he found support there. The other 200 shares I held for the entire move (down close to $128) and I had a nice winner, $757, my biggest in awhile.
However, I also had my first sizeable loser in awhile, in EDU.
This was a stock that announced buy back news today... big deal. I still don't get it. I got short and the thing just never came in... my mistake was not at least taking some off the table when it traded down to $58. Instead, I let the stock bounce all the way back to the highs and I covered over $59. I even added to the short. So really, I could have gotten out with a $200 loser. It turned into a $514 loser. A mistake.
Also, this stock was trading way too thin for me.
One thing that I have found is that I now hate to trade thin stocks. That is one lesson I have learned about the Hybrid Market that has actually stuck. Thin stocks are just too difficult to trade now... the liquidity is just not there to make it worthwhile.
Still, even with the EDU, I was up $300-$400 on the day. I gave it all back when the bond insurer news started hitting CNBC at around 2:40. I lost $200 in XL and another $100 in other financial stocks.
One thing is clear to me. When my win/loss ratio is poor after the morning trade, I should not trade the afternoons. The ratio always just seems to get worse. There will be exceptions to this rule, like, a major news event or market move, but from now on, on a churny low volume day like today, I'll take the afternoon off.
Another funny thing about today. I was complaining in the chat room how I was only up $300 and a guy wisely pointed out that a few years ago he was working for FDX and would have loved to make $300 in one day. I need to remember to have perspective. When I don't and feel the need to "make more" even in a suspect market, I will lose that $300, as I did today.
Here's the stats:
Best, UBB, $757
Worst, EDU, -$514
27,800 shares traded.
23 stocks traded. 7 winners, 16 losers.
Dehtrader, $946 on 2740 shares traded.
Ducati, $368 on 4800 shares traded.
Equine, $365 on 2800 shares traded.
OBAT, $50 on 33,600 shares traded.
Me, $8 on 27,800 shares traded.
Retardo, no trades.
Wincity, no trades.
Evolution, VO vacation.
Timmay, -$37 on 5200 shares traded.
First of all, let's give it up for CNBC who at around 2:40 said that Ackman, the dude who has been shorting the shit out of ABK, was buying a large position in the company. 5 minutes later, they had to explain that what they meant to say was that he was buying more PUTS in the company... he's getting SHORTER. He thinks the stock is going EVEN LOWER.
It was hilarious. But also led to some wacky moves in the stocks. Ah, CNBC.
Anyway, it was a pretty good day for the real world office. Most traders made money. The Beard spoke, though I don't know what he said. Hank Paulson spoke too and he moved his hands a lot... I had the TV on mute. I was just watching their expressions. Had I not known who they were I would have been convinced, with the TV on mute, that they were salesman.
The VO had a mediocre day. Also, volume was light in the market. The VIX was up a little. The real story is in the credit markets, as the yield on the 10 year rips. I think this kind of move is problematic for the FED. As they cut, yields should go down, no? Instead, with credit spreads continuing to widen, credit should continue to be crunchy... I think.
- Asian markets ripped.
- Auction Rate Securities can't attract buyers and the auctions are failing. That means holders can't sell.
- Hillary and Obama attack their respective economic plans. Jake Gint says, "they're both commies."
- Things get even worse for the "dirty subprimers." MWAH-AH-AH-AH-AH!!!!
- This story moved the health insurance stocks yesterday.
- Woodshedder attempts to panic me out of my SKF position. Since the IBD has called a follow through day in the QQQQs, it just may work.