Friday, September 19, 2008

Bob Dylan, "A Hard Rain's A Gonna Fall"

The RO Report, "Fuck The Shorts" Edition

Well, it's been a memorable week. Actually, not. I can't remember yesterday. My head is abuzz, filled with nothing and everything at once. I'm just looking forward to walking out of this little office and entering the world again, if only for two days.

Who knows what Monday will bring?

Anyway, the open today was like no market I have ever witnessed in my nearly 10 years daytrading stocks. I'm not sure how many trades will be "busted," but there were so many prints at extreme prices, that I can't imagine they'll stand. But perhaps they will.

We've entered a bizarro market, where no one has any idea what anything is worth. The numbers on your screen mean less than they ever have before, and the rules can change at any moment. In other words, it's loads of fun, until everyone gets smoked and it's not anymore.

For now, we'll enjoy the volatility and pad our reserves for the next drought, which inevitably, will come.

So it was another amazing day for the RO. These guys take massive risk, but they're smart, and are currently enjoying the benefits of taking that risk. Out of 22 traders, 20 were gross positive, or 90%. 6 traders finished up over $100,000 and 9 traders finished up over $50,000. 14 of the 22 traders today finished over $10,000 gross. I was #10 of 22, or, nicely positive.

Also, I'd like to point out "Trader 3." If you look at these numbers and think everyone makes this money right out of the gate, you'd be mistaken. I believe (though I could be wrong) that "Trader 3" is a first time trader, so for you newbies, it could be interesting to watch his progress.

Here are today's "bosses."

1. Trader Z, $181,953 on 686k shares traded.
2. Trader D, $169,703 on 722k shares traded.
3. Trader P, $153,218 on 345k shares traded.
4. Trader B, $144,863 on 925k shares traded.
5. Trader A, $121,071 on 563k shares traded.

And the "manservants."

1. Trader N, -$3897 on 29,600 shares traded.
2. Trader 1, -$108 on 15,200 shares traded.
3. Trader 3, $120 on 3,800 shares traded.
4. Trader I, $1,387 on 13,000 shares traded.
5. Trader R, $2,649 on 76k shares traded.

Have a restful weekend.

Special Note To Larry Kudlow

Free market capitalism is DEAD, and Goldilocks is a crack whore.

All Trading Stories Here

This is a truly historic day. I won't be posting until I get the RO up at around 5pm. Until then, I leave it to you. Tell us what's going on where you're at.

QUICK NOTE: Hank Paulson broke the stock market. After that open, I'm surprised they're still letting stocks trade.

The SEC Institutes Ban On Short Selling 799 Financial Stocks

You can no longer sell the following companies short, at least until October 2nd. After that, they can extend the ban another 10 days.

There are 799 companies on the list. Think every financial.... if anyone knows where to find the list, please leave it in the comments.

Here are some of the big ones...


I don't know how to explain this to those who don't trade stock. It is an unprecedented move. It's ultimately manipulative, and it's not how free markets work.

UPDATE: Here is the list.

The Government... Wrong Again

Look, they're coming after the wrong people.

Obviously, if people are spreading false rumors about a stock in order to send it down, that's wrong. However, it's just plain stupid to ban short selling.

How about this? Instead of focusing on the short sellers, try focusing on what made this mess possible in the first place. Companies being over-leveraged... how about the moral hazard created by our government? Let's ban moral hazard you fuckers!

I can think of a thousand different places to fix (financial media) before I tinker with the rules of the stock market, which have worked pretty well these last couple hundred years.

Oh, and lets not forget this. You take shorts out of stocks and kiss goodbye explosive short squeezes... those are some of the best rallies (like today's 400 point rally) that you can get!

UPDATE: The link on my blogroll called "Short Squeeze" will come in very handy today. For example, GHL... based on its average daily volume, it would take almost 35 days for all the shorts to cover.

Also, if you have a lot of long exposure to this market, today might be a good day to consider some off.