Saturday, January 31, 2009

What You Missed

A lot transpired here this past week so I've decided to wrap it all up for you in a sort of sick, self-linking sort of way. Take THAT stock-blogosphere!

Okay, first of all, since ostensibly, this is a stock blog (har! har!) I discussed a good trade I made in FAS. Then, as fate (and irony) would have it, I "chambermaided" myself the next day, mostly due to a bad trade in FAS.

But I moved on, and in the first installment of the Dinosaur Trader book club, I offered some thoughts I had on Michael Marcus, the famed futures trader. Then, out of nowhere, I got a bit creative on your ass and shared a bit of my history with you. Knowing that you hate it when I get all serious, the next day I tried to be funny. Finally, I give back to the Internets with a big linklove post.

Now I ask you, where else do you get such non-stop quality? I hope to provide you with more original content next week. And look, if you enjoy it here, please, tell your friends about this blog... I can't take "the Fly" calling me a "third-tier blogger" for too much longer. Thank you... that is all.

Friday, January 30, 2009

The Wrens, "She Sends Kisses"

The RO Report, "FUCK CNBC" Edition

As "the Fly" discussed last night, CNBC is not only not good at educating the average Joe about finances, it's very good at fucking up professionals.

This whole Leisman/Gasparino good bank/bad bank crap is pure idiocy that does nothing more than cause irrational moves in the market. They are airing out rumors... nothing more. It's problematic and needs to be stopped.

I have mentioned in a couple of places now the idea of a stock blogosphere-wide call for a CNBC boycott. There are other places to get news. Unfortunately, often, they are merely repeating the crap reported on CNBC, which creates this awful echochamber effect. Anyway, stay tuned.

The RO had an excellent day. I'm in a rush, so here's the numbers... I was #7. Oh, and one blog note, I'm going to have a brief review of the blog week here tomorrow... a self-referential link love fest of sorts...

Oh, and one more note... if you have a Digg account (simple to set up lazy-ass) I'd love if you could Digg this post. It helps me build readership. Thanks.

"Lucky Pierre" - Trader C, $9,772 on 260k shares traded.

2. Trader P, $6,557 on 195k shares traded.
3. Trader A, $4,818 on 160k shares traded.
4. Trader Z, $4,137 on 139k shares traded.
5. Trader B, $4,134 on 513k shares traded.

"Chambermaid" - Trader H*, -$3,699 on 19,400 shares traded.

2. Trader D, -$2,404 on 122k shares traded.
3. Trader 6*, -$2,024 on 0 shares traded.
4. Trader 9*, -$1,059 on 4,200 shares traded.
5. Trader 10*, -$589 on 200 shares traded.




The Week In Review

You know I'm a big media critic. And I hate CNBC... so does "the Fly." And he's dead on in this one.



Speaking of the media, there are an awful lot of goldbugs showing up on CNBC lately. Meanwhile, Complacent Panda says they're silly... take THAT goldbugs!

For all you dorks and Trader P.

Stories don't get much sadder than this.

Jamie found an interesting article on proprietary traders.

Were the ants gone before they filled it with concrete? Amazing. Nature holds all the answers, I'm sure of it.

Not sure what I hate more... dogs, or their stupid owners...

Why? Because dogs are ruthless killers... check those thumbnails.

Citigroup returns new $50 million jet. Here's a funny take.

RIP John Updike.

A walrus masturbating... no really... depending on your boss's sense of humor, probably NSFW.

The most delicious meal ever? Not sure what PETA would think...

Speaking of PETA, they finally get it. Sex sells. But does it sell vegetarianism? Apparently not on the Superbowl, since this ad was banned. Can someone explain how this shit gets banned yet you can sell all the beer you want with sex?

More irony.

Is credit weakness spreading to jumbo loans now?

Anyway, can I get a bailout?

Okay, forget the bailout... I just want a clean beach.

Obama's STFU face.

Enjoy your weekend and thanks for reading this week. I will post a brief review this weekend.

Thursday, January 29, 2009

Beulah, "Landslide Baby"

The RO Report, "The Trend Is Your Friend" Edition

It's so gay and lame to say, but completely true.

The trend really is your friend. It's the annoying friend who sometimes you try to shake. And sometimes, the trend calls and you don't pick up the phone, but he is your friend nonetheless.

Occasionally, you'll think, "Fuck this trend, what about yesterday's trend?" but that is silly. Yesterday's trend doesn't matter anymore. Yesterday the trend was up. No one cares about yesterday's trend anymore.

In fact, if you took yesterday's trend, and placed it in the scale of a longer period trend, you would see we're still trending down. The trend is down. The trend is always down.

The price is wrong, bitch, and don't you forget it.

Anyway, I'm hammering this home to help cure myself of my "asshole dip buyer" tendencies.

The RO did pretty well today. Out of 31 traders, 20 were gross positive or 65%. 9 traders made over $1,000 gross and 6 lost over $1,000 gross. I was #10 of 30. Still clawing my way back from my loss the other day.

Some nice change in the boss list today...

"Lucky Pierre" - Trader D, $5,272 on 155k shares traded.

2. Trader P, $5,088 on 143k shares traded.
3. Trader N, $4,313 on 102k shares traded.
4. Trader V, $3,848 on 60,450 shares traded.
5. Trader E, $3,558 on 105k shares traded.

"Chambermaid" - Trader 9*, -$2,456 on 3,300 shares traded.

2. Trader 6*, -$2,377 on 400 shares traded.
3. Trader C, -$1,803 on 234k shares traded.
4. Trader B, -$1,485 on 228k shares traded.
5. Trader G, -$1,056 on 113k shares traded.


Heatmap reversal from yesterday...



There's No Place Like Home

Judy teaches yoga. She's a great person, full of positivity and love.

On the other hand, I hate people.

Anyway, one night after dinner while we were preparing our daughter's, okay wait... who am I kidding, while SHE was preparing our daughter's lunch for school, it became clear that her new "Wizard of Oz" lunchbox had disappeared. A crisis involving thrown carrots, peas, and feline abuse ensued. The good news was that Judy quickly remembered where she last saw it, at the yoga studio. The cats were spared.

Since I had been locked inside the house all day, I volunteered to go down to the studio when the last class of the day ended, at 7pm.

"Who's teaching?" I asked.

"Belinda," said Judy with a little smile.

Belinda, you see, is hotter than tabasco sauce on a camel and Judy likes to poke fun at me since she knows I think she's hawt. She only gets away with this because she knows that Belinda wouldn't take a second glance at me even if I was, say, the only heterosexual man at a gay parade. Does that make sense? No bother...

Whatever, I thought... Belinda is going to notice me, I'll show Judy!

And so I drove down to the studio, the whole way playing out the scenario in my head.

I'd walk in all casual and say, "Oh, hey Belinda, how'd class go?"

Chances are she'd look confused and ask me who I was.

"Oh yeah, you don't remember me? DT? Judy's husband?"

She would say she didn't remember meeting me and take a step or two back.

"Bah!" I'd say, waving a hand at her, "We've met before, like 7 times!"

No, she'd say... we'd never met. She slowly start to reach for the phone receiver, most likely to call the cops.

"Right..." I'd continue with a knowing wink. "Anyway, you see a Wizard of OZ lunchbox laying around?"

Not exactly porn material, but I was praying that she had a thing for the "caring Dad" type, so I'd play that up... "Yeah, my daughter was just all broken up about it, but I told her, 'Don't worry honey, Daddy will find your lunchbox!'"

That'd get her. Fast forward to a little "downward dog" action and I'd be in.

Anyway, so here's what really happened...

I drove the 5 minutes into town while blasting the Animal Collective song "Hey Light." It was pouring rain. I highly suggest purchasing that song and driving through the rain in the dark while it's playing at an obscenely loud level.

So I arrived at the studio just as class was ending. It smelled of Nag Champra and was about 99 degrees. Candlelight filled the room and everyone was glowing orange and completely blissed out. I, on the other hand, was newspaper-colored and freezing cold. The positive energy crowd parted like the red sea as I entered the studio.

Now, a note about my personal appearance. I have a large unruly beard. I'm a winter surfer in a region of the world where the water temperature drops into the 30s... every hair helps, believe me. Also, I don't leave my house for days on end... why shave? I hate to shave!

So picture the scene. Me, wet, grey and hairy,entering this blissy room all orange and yellow with "good vibe" and "positive energy."

Through the dudes who looked like Jesus and the girls who looked like flowers, I spotted the lunchbox. My daughter had placed it under what passed as a "desk."

I bent down to pick it up.

Now, at this point, I kind of lost track of time. As I reached down for the box I noticed, there, under the desk, the exposed legs of Belinda. My GOD they were beautiful; glistening and dewey with sweat. The smell... it was something like the best parts of the earth... I must have gone into some sort of trance. Later I would blame the heat, but really, it was the legs... the naked, perfect legs of Belinda.

After some time, 20 seconds? 2 minutes? I really couldn't say, I stood up, Wizard of Oz lunchbox in hand. The positve energy people were staring at me... In fact, they had sort of closed me in. What was UP with these people? FUCK! It was orange and hot in this place. And quiet. Were these people humming? I was all disoriented. It suddenly seemed to get very quiet...

Belinda's boyfriend, a nationally-known weight lifter and ultimate fighter dude, was staring at me.

This was it... the end for me.

"Hey dude," he said gesturing under the desk, "Nice view?" He looked down at my Dorothy lunchbox, smirked, and shook his head in disgust, or perhaps disbelief.

Now, I could either play stupid, or be straight up about the situation. I decided to play it straight up.

"Man," I began, "you're a lucky guy." His face tightened. "Good thing for you I like men, eh?" I said, winking at him. At this point I held up the Dorothy lunchbox somewhat emphatically. I figured if he made a move for me, I could smash it across his face.

But he didn't. My act had thrown him off his game and I made for the exit, positive energy crew parting once more like the red sea.

DT. Wins. Again.

Wednesday, January 28, 2009

Smog, "Teenage Spaceship"

The RO Report, "Faceroll" Edition

Trader P introduced me to a wonderful new term yesterday and luckily I didn't have to wait too long to use it. I mean, it has something to do with a game called World Of Warcraft, but I'm using it as a synonym for "easy" as in, "trading was so easy today, all you had to do was roll your face across the keyboard to make money."

Of course, that's a lie.

The RO did well today, but it wasn't that easy. In fact, the afternoon long trade was very difficult. I actually bailed at the very lows of the move and had to buy back much higher. Not easy.

Anyway, today was a pretty solid day, despite the FED. FED days almost always suck. It's just one of trading's truisms, so it's nice to see the good numbers. Out of 30 traders today, 22 were gross positive, or 73%. 14 traders made over $1,000 gross, and 1 lost over $1,000 gross. I was #10 of 30.

One note, Trader $ is a new trader to our office. I've decided to stop counting higher with the trader names, (as in Trader 13, Trader 14, etc.) and now I'll go to symbols. Unfortunately, today his symbol is somewhat ironic, given his manservitude, but he'll be okay.

Be sure to check in tomorrow. I'm coming out of the closet, here on the blog.

"Lucky Pierre" - Trader C, $14,736 on 382k shares traded.

2. Trader Z,
$11,268 on 340k shares traded.
3. Trader H*,
$10,187 on 17,500 shares traded.
4. Trader A, $6,730 on 626k shares traded.
5. Trader N,
$4,763 on 82,200 shares traded.

"Chambermaid" - Trader D, -$2,221 on 55,400 shares traded.


2. Trader I,
-$737 on 16,000 shares traded.
3. Trader M*,
-$544 on 0 shares traded.
4. Trader $,
-$537 on 18,600 shares traded.
5. Trader 3,
-$447 on 19,762 shares traded.




Team Israel And The Perma-Plebes

The monitors were stacked in a "U" formation; 4 across the bottom, and then 2 high on either side. It was a fortress, a kingdom, and Mr. Green, the little Jewish man staring into them, was the king.

The dull light emanating from them turned his skin a bluish color and reflected off his crisp white shirt. On either side of him were younger men with similar, yet smaller monitor displays; his sons. Together, they ran what came to be known as "Team Israel." Word was that you had to be Jewish to work for these guys, and word was that they were all very good traders.

"Team Israel" sat across from our "team," a ragtag collection of potheads, ex-convicts, foreigners and Ivy Leaguers.

Now, when I used to hear the term "trading desk," romantic visions entered my mind. I pictured oriental rugs underfoot and monitor displays supported by hundreds of pounds of rainforest-harvested lumber. Indeed, I pictured a grand desk, from which well thought-out ideas involving large sums of money were put to test in the marketplace.

I was quickly disabused of this notion by Anvil.

Instead, both Albert and Mr. Green sat in the middle of long makeshift desks that consisted of about 20 pale-grey folding tables placed end to end. Extending to the left and right of each of them were 8 traders. So between the two teams, there were about 34 traders; 17 on one side staring across at the 17 on the other side.

The only thing separating us, besides religion, was the wall of monitors.

The largest monitor formations were found in the middle of the desk, by Albert and Mr. Green. As the profitability and skill of the trader tapered off, so too did the monitor displays. So the best traders were all clustered together at the center of the "desk," while the plebes at the end of the desk, with their two 18-inch monitors, were left to marvel at the circuitry in the middle.

The plebes, over in their shanty-towns, would joke amongst themselves about buying 10,000 shares of Vodaphone. They'd say, "Man, I had 400 shares of IBM and was stopped out a penny below the low point of that move, just before it ripped 9 fucking points." Plebes were often heard complaining about the trading software, or about their commission rates.

Their position sizes were strictly limited... indeed, holding 200 shares of a stock was enough to make many of the "perma-plebes" panic. But still, they'd imagine themselves one day behind a wall of monitors, sitting near the center, glibly glancing over at their personal Bloomberg Terminal while off-handedly discussing the losing positions in their long term accounts.

To make the jump from being a "perma-plebe" to a "trading king" was difficult, if not impossible, because it not only meant having to transform one's personality, it also meant a king would have to fall to free up some space in the center. No, it was much more likely that a plebe would slide off the end of the desk and go back to his bullshit job recommending mutual funds to under-informed retirees.

He'd show up again one day to visit the desk during his half-hour lunchbreak, extolling the virtues of a steady paycheck...

Anyway, desk space was at a total premium. The monitors were so tightly packed that if somehow the dude next to you haggled or traded his way to an extra monitor upgrade, you were screwed. Your space, already tight and infringed upon, was now very infringed upon. Personal items were lost forever amidst the tangle of wires that ran under the tables. A rumor that was often discussed and never dismissed as a total falsehood, was that Mr. Green had lost a single Armani shoe to the unforgiving cables.

You see, for a trader, screen real estate is very important. The more you can fit onto your screens, the more you can conceivably watch. The more you can watch, the more opportunities you can find. The more opportunities you can find and exploit, the more money you can make.

Anyway, viewing the disparity in the monitor setups was my first indication that I had to negotiate not only for my commission rates, but also for how many monitors I would get and what software services I could use.

I shuffled in and found my seat at the end of the desk, next to a man who was sitting at the edge of his seat and speaking to his monitors in some forgotten Eastern European language. He seemed to be threatening his monitors, under his breath.

The market wasn't even open yet.

Tuesday, January 27, 2009

Squeeze, "Another Nail For My Heart"

Haven't gone to the 80s in awhile.

The RO Report, "Metaphor" Edition

Today, the market was many things. And it caused a few of us to search for metaphors, to explain it all...

One might say, for example, that the market was like a dog tied to a stake in a backyard. That was mine...

"Trader MV," not a member of the RO, but someone I speak with each day offered the following... "The market was like a patient etherized upon a table; heavy, lifeless and hard to move." Not bad.

Another trader who shall remain unidentified (you'll soon realize why) opined that the market was "like an alright chick u bring home who's pretty drunk and u know u can fuck her. but the second she steps in the door she vomits on ure new northface fleece that's sitting on ure dining room table. and then ure like, 'i wonder if i can still fuck her.'" Questionable, indeed.

Perhaps the market was like a mouse, spinning endlessly on it's little mousewheel. Trying to run as fast as it can, and getting nowhere fast. That was Trader A's neat metaphor. A little gay, but harmless enough.

And finally, I'll leave you with a metaphor from one of our Manservants... Trader E, who said that the market was like "a cock to the face."

In other words, today sucked. Now, for the numbers...

Out of 29 traders today, 17 were gross positive, or 62%. 3 traders made over $1,000 gross and 6 traders lost over $1,000 gross. A mess. I was #9 of 29. I'm happy to be green.

History post dropping tomorrow.

"Lucky Pierre" - Trader H*, $3,626 on 17,800 shares traded.

2. Trader Z, $2,304 on 45,060 shares traded.
3. Trader B, $2,290 on 162k shares traded.
4. Trader I, $884 on 30,200 shares traded.
5. Trader 7, $696 on 10,000 shares traded.

"Chambermaid" - Trader N, -$2,874 on 84,800 shares traded.

2. Trader V, -$2,366 on 53,400 shares traded.
3. Trader F, -$2,127 on 33,000 shares traded.
4. Trader 10*, -$1,482 on 0 shares traded.
5. Trader E, -$1,200 on 19,800 shares traded.




Brian's take.

Michael Marcus: Market Wizard

So, this will be the first book club post... it's very sloppy, but I wanted to get it up anyway.


The book I'm currently reading is a trading classic, Market Wizards, and the first chapter discusses the futures trader Michael Marcus.

Now, you could argue that Market Wizards is a bit like watching 1970s porn. Why would you do it? People didn't "shave" back then for chrissakes and the sound editing was awful. But Michael Marcus wasn't a porn star and the market hasn't changed nearly as much as the porn industry has.

Anyway, I'm not going to summarize the chapter or anything, because that would be boring. Instead, I'll just point out the things I found interesting.

First of all, the dude lost consistently for the first couple of years.  I thought of Dr. Suess, sending his books out to like 60 publishers and getting rejected by them all before becoming a huge success.  

The moral is, if you love something, keep trying.  However, don't expect it to be easy. 

I mean, the guy lost a lot of money... money he borrowed from his Mom even. And things didn't really turn around for Mr. Marcus until the market hit a wild inflationary run in the mid 70s.  I thought that was interesting too... the market always has active periods.  Like, take September to December for example of 2008.  The RO cleaned up, made loot.  Periods like that are what you have to take advantage of.  There are lots of dry spells where you can lose your ass if you're not careful... a good trader needs to take advantage of opportunity when it is present.  And don't discount luck.

Marcus kept trying, took advantage of a good market, gained confidence, and became successful.

But he didn't do it all on his own.  He had a legendary trading mentor, Ed Seykota (Rudy, you still out there?) who helped him early on.  However, despite that, he said the following, which I agree with:

You also have to follow your own light.  Because I have so many friends who are talented traders, I often have to remind myself that if I try to trade their way, or on their ideas, I am going to lose.  Every trader has strengths and weaknesses.  Some are good holders of winners, but may hold their losers a little too long.  Others may cut their winners a little short, but are quick to take their losses.  As long as you stick to your own style, you get the good and the bad in your own approach.  When you try to incorporate someone else's style, you often wind up with the worst of both styles.  I've done that a lot.


He also claimed that trend following systems were "doomed to mediocrity."  He said this sometime in the 80s I guess.  Clearly, trend following systems haven't gone away.  I think the thing about this that I want to highlight is that the market changes less than our relation to it.

Another thing, and this I point out for my friends who have been successful, he mentions how he was an awful investor.  I can't tell you how many trading friends I've seen make a lot of money and then squander it on bad investments, including me.  Look, if you're a good trader and have made a lot of money, don't lose respect for that money.  Save it.  You'll need it someday.  Don't go investing in bullshit.

Now, it's not like you get many exact trading rules from Market Wizards.  It's really more a book about personalities and fun trading stories.  However, I did find one rule that you can take out of the Marcus interview.  It applies to all time frames and is especially important in our current market.

You absolutely want to put down a [short] bet when a market acts terribly relative to everything else.  When the news is wonderful and a market can't go up, then you want to be sure to be short.


Also, I thought the following was right on when asked about what makes a good trader...

His objectivity. A good trader can't be rigid. If you can find somebody who is really open to seeing anything, then you have found the raw ingredient of a good trader.


Finally, in a touch of psychology that Trader X and Attitude Trader would enjoy, Marcus claims that, "in the end, losing begets losing. When you start losing, it touches off negative elements in your psychology; it leads to pessimism."

So, this is why I like Market Wizards. I mean, Michael Marcus traded the commodity markets in the 1970s yet you can still find lots of wisdom in this interview that pertain to trading the stock market today. In fact, you can take this wisdom and apply it to any market you trade.

Next Tuesday, I'll "discuss" the Bruce Kovner interview.  Carry on.

Monday, January 26, 2009

Mick Jagger & David Bowie, "Dancing In The Streets"

Really, this just about sums up my day.

If you were a fan of the Stones in the 60s this really should have been the moment when you said, "Okay, these guys are done forever." I mean, just watch 30 seconds of this video. What was Mick Jagger thinking? An awful classic.

The RO Report, "Extinction" Edition

I bet things were going pretty well for the Dinosaurs right before the meteor hit. I bet they didn't even see it coming.

Well, today was kind of like that for me. The meteor was FAS. Ironically enough, this was the same stock I profiled as a "good trade" earlier today.

I got blasted fighting the market between 1:30 and 2 as FAS cratered in my face. I blew out 20 cents from the bottom. I had a lot. Painful? Yes. However, I feel okay. I'm not losing my mind or anything, I feel money is coming. A setback to be sure, but I'm gonna go over it all tonight and master it.

Unfortunately, you know the policy around here... I lose money, I have to post bad music. I lost big money today... so prepare for a truly awful song to drop later.

On the bright side, the RO had a decent day. Nothing great, but solid numbers. Out of 29 traders, 19 were gross positive, or 66%. 5 traders made over $1,000 gross and 2 lost over $1,000 gross. I was Chambermaid, hopefully for the first and last time.

"Lucky Pierre" - Trader Z, $2,576 on 113k shares traded.

2. Trader 10*, $2,301 on 400 shares traded.
3. Trader F, $1,870 on 64,800 shares traded.
4. Trader 9*, $1,757 on 300 shares traded.
5. Trader N, $1,512 on 114k shares traded.

"Chambermaid" - Trader S, -$5,814 on 88,600 shares traded.

2. Trader B, -$4,533 on 217k shares traded.
3. Trader 6*, -$941 on 0 shares traded.
4. Trader V, -$884 on 69,200 shares traded.
5. Trader T, -$802 on 11,000 shares traded.


A Dry Joke, Courtesy Of Dinosaur Trader

I put peanut butter in a mouse trap this weekend. Five mice died from salmonella poisoning.

A Trade In FAS

I started Friday in a very bearish frame of mind. I ended Friday marveling at the market's resilience.

Accordingly, I began Friday getting short developing markets via purchasing EEV, the double short emerging markets ETF. I focused on EEV early because I saw that Brazil and Russia were getting pounded. I have no idea if that's a valid reason to purchase EEV. Anyway, the point is that this trade nearly killed me. I lost a decent amount in it and was forced to reconsider my bearish mindset.

A trading buddy/thorn in my side pointed out that SPY had held 80 support. At around 11am, when we vaulted through SPY 82 on some bogus news about unemployment benefits no longer being taxed (HAH!) he advised getting long. However, how could I buy into that spike? So I decided to wait for a pullback.



Above you see a chart for SPY, which is what I was following to time my entries and exits. After that initial large spike, the market consolidated and tightened up, and SPY set up for a triple-top break just after 1pm. However, I only had a very small SPY position. Instead, I focused my long efforts on FAS (triple financial long... HAHA!) because I noticed it was breaking the downtrend on the 60-min graph. See below.



I was hoping for a more explosive break. But whatever, what made this trade good for me was the way I held and purchased on pullbacks. As long as uptrend didn't break, my plan was to continue adding on dips. My thought was that as long as it broke above the 60 min downtrend and held, that I was safe to add with the overall market rising. So I purchased FAS between the prices of $8.44 and $8.80, building a position of 5,000 shares which I exited an an average profit of 17 cents per share. So I made about $800 on the trade.

I actually got very lucky, as the trade came within a penny of my "pain threshold." But I'll take it... I can't tell you how many times in my career that I've been stopped out a penny or two below my level only to see the stock reverse and go in my favor.

Long time readers know about my early struggles with the hybrid market. My old trading strategy of trading many stocks at once, is somewhat dead because the market is just too fast and illiquid in many stocks now for my taste. I used to take many trades and just "cut losers and let winners run." It's just much more difficult to do this with any precision now given the liquidity issues on the hybrid. Stocks will trade through levels on a 100 share trade, and then shoot right back above it like it never mattered. So, going forward, I'll be looking to put on more trades like FAS, in which I pick a direction for the market and build into one to five names.

That's not to say you still can't trade many stocks at once. I know a few guys who do this very well. However, in order to do so, you need to widen your stop loss levels. I'm not really comfortable with that. When I learned to trade (10 years ago in March, sheesh) losing a quarter point on a trade was a big deal. Now a quarter point is static. But for me, old habits die hard... and so I've had to reduce my exposure to static... it was stressing me out too much.

But hey, if in a month the market rewards trading 25 stocks at a time again, I'll try and be there.

Saturday, January 24, 2009

Bartiromo Interviews Prince Alwaleed

This is great.

(h/t "the Fly")

Meanwhile, a lone voice cries out that Dennis Kneale Is Not An Idiot.

Friday, January 23, 2009

Low, "Words"

The RO Report, "Mettle" Edition

Seriously, why shouldn't the market be dropping? The banks are destroyed. People are taking dudes who live on boats and store grains seriously... but still, the market is hanging in there.

I went bearish when the SPY cut through 85 like butter. However, if we open Monday, blow through 84 and test 85 again, I'll start to wonder about the short side.

I'm surprised by this mild strength. Of course, it's kind of lame to think we're doing well just because we're not cascading lower, but I think that just points out how negative sentiment is right now. It feels like the world should be ending, but it isn't... yet.

The RO had an impressive amount of traders in the green today, but no one made big size. Out of 31 traders, 24 were gross positive, or 77%. 8 traders made over $1,000 gross and 1 trader lost over $1,000 gross. Pretty solid. I was #7 of 31.

Have a great weekend. Next week this blog will be chock full of posts.

"Lucky Pierre" - Trader D, $9,083 on 162k shares traded.

2. Trader H*, $5,770 on 8,800 shares traded.
3. Trader F, $3,328 on 94,100 shares traded.
4. Trader E, $2,872 on 32,600 shares traded.
5. Trader M*, $2,470 on 0 shares traded.

"Chambermaid" - Trader B, -$9,952 on 549k shares traded.

2. Trader P, -$789 on 80,400 shares traded.
3. Trader I, -$636 on 62,000 shares traded.
4. Trader 12, -$90 on 15,400 shares traded.
5. Trader 3, -$41 on 26,800 shares traded.


(Note, Trader 12 found the RO through this blog. Wish him well.)



Click here for Brian's take.

Linkday


- Which 3 traders from the RO are pictured here?

John Thain spent 1.2 million to redecorate his fucking office. Here's a list of some of the more egregious items. How about $35k for a toilet?

Exclusive footage of "the Fly" at his block party in Staten Island.

Ray parses the new Neil Young song in which he takes shots at Wall Street. Is Neil Young a hypocrite though or what? I mean, here he is cashing in on the bailout while complaining about rich dudes...

New conspiracy theory... despite loads of anecdotal evidence, Americans aren't dumb. Instead, Europeans just set up pictures on the Internet of dumb Europeans and call them Americans.

The HCPG guys are posting to their blog again. Like animals, actually... Here they post a transcript of a recent Warren Buffett interview. They wish "out loud," that there were more men in the world like Buffett. My guess, they really just wish there were more men in the world...

Howard complains about the cost of the Obama inauguration and draws my ire. Actually, Howard, it had nothing to do with the inauguration thing... I just hate the phrase "Color me ____"

More ire was drawn this week when Henry Blodgett described his plan to save the NY Times. James Surowiecki disagreed. Actually, I'm just posting this link because I want to be hired by the New Yorker. Quick, everyone click on James Surowiecki name NOW! Okay, Mr. Surowiecki, now that I have your attention... SAVE ME! I'm a stock trader but I want to live on a farm in Maine and write about the dawn and the sound that loons make swimming on dark empty ponds. Email me dude. Thx.

But look, if Surowiecki won't help me out, perhaps Jon Stewart will. In fact, if I had a half hour to live and the choice between watching The Daily Show or reading The New Yorker, I'd pick watching The Daily Show. Okay, quick! Everyone click on Jon Stewart's name NOW! Mr. Stewart, how's it going? Look, SAVE ME! I'm a stock trader, I run a third-tier blog, but what I really want to do is live in NYC and poke fun at politicians that I hate! Email me dude. Thx.

A neat list of where all that TARP money went.

Rick Sanchez tears "Joe the Plumber" a new one.

But before you start thinking I like Rick Sanchez, let me share with you one of my favorite video clips ever... "Do it!"

You're a racist.

Diane Sawyer got a little wasted at the inauguration.

I am a member of the Wolfpak, I admit...

Trader X is revamping his blogroll. In an effort to "guilt him" into including me on his, I will link him here.

Okay, that's it. I know I engaged in lots of "third-tier" behavior this week (especially in this post, sheesh!) and didn't write one history or around the house piece and I apologize. Just know that next week will be the best week ever here. I already have an around the house post set to go for Thursday and a history post nearly complete for Wednesday.

Don't miss them. Because soon, when I'm a writer for The New Yorker/The Daily Show, you'll be able to say you knew me back when I was "third-tier."

Thursday, January 22, 2009

Animal Collective, "My Girls"

The RO Report, "Confusion" Edition

I think today was pretty difficult.

Sure we had a nice dive this morning, but I had a tough time padding my account during it. Instead, it gave me a nice short bias going into the afternoon which nearly killed me around 2pm when the market squeezed hard.

After two days of nice clean trending closes, today was a rude awakening. Just more proof that you constantly have to switch up your game. What worked yesterday doesn't necessarily work today.

So I don't have a great read on the market going forward. I look at the SPY chart and feel like we're forming a bear flag and will soon break 80, but enough smart people see some bullish divergences that it's giving me pause. Hopefully tomorrow clarifies the picture a bit. I'd like to go into the weekend with my sanity and my finances intact.

Anyway, it was a mixed day in the RO. Trader B nearly reversed all of his gains from yesterday, which couldn't have been pleasant, and no one really cleaned up.

The best you can say about the RO performance today is that most people managed to stay somewhat green. Out of 31 traders today, 21 were gross positive, or 68%. 8 traders made over $1,000 gross, and 4 lost over $1,000 gross. I was #13 of 31. Underperforming, but happy to come out of the day alive.

"Chambermaid" - Trader B, -$35,070 on 635k shares traded.

2. Trader 9*,
-$2,072 on 7,100 shares traded.
3. Trader I, -$1,236 on 3,000 shares traded.
4. Trader 6*,
-$1,105 on 300 shares traded.
5. Trader O,
-$776 on 31,600 shares traded.

"Lucky Pierre" - Trader F,
$3,284 on 63,100 shares traded.

2. Trader D,
$2,905 on 131k shares traded.
3. Trader A,
$2,126 on 258k shares traded.
4. Trader Z,
$2,032 on 329k shares traded.
5. Trader J,
$1,909 on 75,000 shares traded.


Aflac In Pain

Look for the Aflac duck at your local Chinese restaurant soon!

"Cubicle Boss"

This video is hilarious. Again, another reason to be a trader, no deranged boss.

Wednesday, January 21, 2009

Pixies, "Head On"

The RO Report, "We're BACK!" Edition

After a few choppy weeks to begin the year, it appears that the good times are back.

The RO kicked ass today, demolishing all other prop firms in the process. Take a look around you tomorrow when you go to trade at your "third-tier" shop. See those guys? A bunch of losers they are. We've got all the winners over here... it's almost unfair.

Of course, it helps that the market broke out at around 1:30 and never looked back. Nice clean closes these past couple of days, reminiscent of the autumn. We were afraid they were gone forever. I'm sure some of the guys in your office did okay too...

Anyway, you know how I like to talk about perspective. If you got some perspective these last couple of weeks, cherish it... If you've made a little money these last couple of days, respect it...

Always remember that your job isn't only to make money, but to be in control of your emotions and expectations. The good times come and go, as do the bad. Always remember, this too will pass... so, after that speech, we will humbly accept (granted, I talked a little smack) these gains and see what tomorrow brings.

Out of 29 traders today, 25 were gross positive, or 86%. 17 traders made over $1,000 gross and only 2 lost over $1,000. Nice, solid numbers. I was #12 of 29. Underperforming, but okay with that, since I had some awful overnight positions that I had to overcome.

"Lucky Pierre" - Trader B, $40,983 on 911k shares traded.

2. Trader Z, $27,577 on 380k shares traded.
3. Trader F, $16,770 on 262k shares traded.
4. Trader C, $11,165 on 405k shares traded.
5. Trader N, $9,409 on 166k shares traded.

"Chambermaid" - Trader 7, -$2,293 on 32,000 shares traded.

2. Trader D, -$2,024 on 286k shares traded.
3. Trader I, -$676 on 12,200 shares traded.
4. Trader T, -$127 on 7,600 shares traded.
5. Trader U*, $2 on 0 shares traded.


Brian's take...

The Daily Show On The Inauguration

Since I'm way behind in my writing responsibilities right now, I figured I'd toss up some "old school" Dino fare.

Tuesday, January 20, 2009

Beta Band, "Dry The Rain" (Live)

Ushering in the new era. "Say it out loud, it'll be okay."

Meanwhile, if you don't know this song you will like it. Give it a listen.

The RO Report, "Croup" Edition

My daughter has picked up some 18th century illness. So, I am off to the doctor. The RO will be up later.

UPDATE: I always have a tough time the day after a 3 day weekend, and today was made even more questionable by the inauguration of Barack Obama. However traders enjoyed a real smooth move today, minus the chop from 12 to 2pm.

I always love a good, peaceful transition of power. Even if the Chief Justice garbled the oath... it was a great speech, and I think, glancing at C, and BAC that everyone must be rooting for Obama right now.

Not that he's here to fix the financial system... instead, I look at those stocks and see them as symtomatic of a sick country that hasn't been treated properly. The country has been coughing like a sick dog for the last 8 years and no one has been doing their jobs to make it any better.

Time to move forward.

I'm not even sure what to say anymore. Rarely have I ever felt so certain that so many stocks were going straight to zero. Are we entering an era where money is meaningless? We're not yet at the November lows on the Dow, yet C and BAC are basically worthless... I'm slightly confused and very concerned by this action.

Nonetheless, the RO had a decent day. Probably one of the best days of the new year in fact. Sure, we have a few accounts to the downside, but the bottom 3 were all swing accounts.. active traders did okay today. Out of 30 traders today, 18 finished gross positive, or 60%. 11 traders made over $1,000 gross and 6 traders lost over $1,000. Not great numbers by any stretch, but an improvement. I was #6 of 30. Pretty pleased.

"Lucky Pierre" - Trader B, $12,728 on 414k shares traded.

2. Trader P, $8,378 on 103k shares traded.
3. Trader A, $6,096 on 302k shares traded.
4. Trader C, $4,410 on 116k shares traded.
5. Trader D, $3,247 on 190k shares traded.

"Chambermaid" - Trader H*, -$13,703 on 18,100 shares traded.

2. Trader 10*, -$6,849 on 7,000 shares traded.
3. Trader 9*, -$3,070 on 800 shares traded.
4. Trader I, -$2,588 on 49,800 shares traded.
5. Trader F, -$2,201 on 64,800 shares traded.

Goodbye Neocons!

Looking forward to the future for the first time in 8 years. The worst is behind us now.

Monday, January 19, 2009

I'm Slow

Interesting fact: It will take you 30-40 seconds to read this post, but it will take me 12 days to write it.

Anyway, we went away this weekend and instead of slaving away in front of my laptop to craft a history post, or to finish the multitude of around the house posts that I have partially finished, or to figure out how to get the ball rolling in the "book club," I hung out with my friends and family and spent some time cross-country skiing.

In short, I've fallen behind and besides the RO posts, I don't know what you can expect from this blog for the rest of the week.

We will see. Perhaps I will get a history post done, or maybe I'll discuss getting surrounded by barefoot "yoga people" while clinging to a Wizard of Oz lunchbox. The point is, I have lots of catching up to do around here. Patience.

Friday, January 16, 2009

Smashing Pumpkins, "Drown"

Congrats to Dinosister on leaving her old job and starting a new one.  Change is good.  Here's her song pick.  A surprisingly good one.

Linkday


Yep... he's still there...

A Russian professor predicts the USA is going to split. At least the Northeast joins the EU...

Ever been pissed about getting a parking ticket? You'll relate to this.

I love this story. Rich guy fakes own death, found buying Bud Light Lime.

You didn't miss episode 1 of "the Fly Show" did you?

Cornography.

Greening the ghetto. Save the world and poor people at the same time. Sign me up. No wait, I hate the world and poor people... forget it.

This was an easy article to miss, but man did it depress me. Turn off the TV and video games and start parenting again people.

Bernie Madoff rapping. Okay, maybe the dude just looks exactly like him...

The Reformed Broker hates the bailout and Cafe Metro hates him.

Toyota wins again! They beat the Big 3 to hybrid, and now they'll get electric too.

Buy local and organic... buy local and organic...

Another reason to trade... no boss to kill you with a trident!

It didn't feel like it yesterday, but is volatility about to dry up?

I'm headed up to my mountain retreat for the long weekend. I'll try and get the RO report up, but no promises when. Trade well and stay warm.

Thursday, January 15, 2009

Prodigy of Mobb Deep, "Diamonds"

The RO Report, "Death" Edition

The report will be late... 9pm or so.

UPDATE: Another day, another early selloff but unlike yesterday's Plan C action, today was Plan A all the way. Gap down, test support, and then rip.

From 12:30 until just about 3pm, the Dow rallied nearly 300 points. I wasn't keeping tabs on what my mates were doing, but I knew most of them were nicely green. That all changed drastically when the market couldn't retake the highs at around 3:15. That's when the death began. Traders who were caught long got clipped as the market dove 100 points in about 20 minutes.

One trader got out close to the highs... bonus points if you can guess who...

Anyway, we had a nice bounce on support today. It would be much nicer for the bulls had we been talking about SPY 89 holding up... but that was way back when BAC traded in the double digits and C wasn't sub $4. That was another market. Now we're back to be excited that we actually managed to close green.

We have a long weekend and then the inauguration. There are all kinds of rumors about what's going on with C and BAC. Will they be nationalized? These are strange days. Let's hope that next week brings us more clarity.

Out of 29 traders today, 17 finished gross positive, or 59%. 6 traders made over $1,000 gross, but 9 traders lost over $1,000. We've clearly entered a more challenging trading environment. I was #5 of 29. Survivor guilt.

"Chambermaid" - Trader F, -$37,372 on 505k shares traded.

2. Trader N,
-$32,018 on 252k shares traded.
3. Trader D,
-$16,780 on 448k shares traded.
4. Trader E,
-$12,499 on 83,400 shares traded.
5. Trader C,
-$7,413 on 374k shares traded.

"Lucky Pierre" - Trader B, $44,694 on 1 million shares traded.

2. Trader A,
$9,071 on 278k shares traded.
3. Trader L,
$4,212 on 87,800 shares traded.
4. Trader J,
$3,134 on 109k shares traded.
5. Trader S,
$1,762 on 43,800 shares traded.

Please Explain...

I found a link to this commercial at Wall Street Fighter. I watched it, and frankly, I've been confused and unable to piece logical thought together ever since. Help.



Also, this was linked... which is definitely offensive, but also really funny.

Great job today with the links, WSF... it's 8:18 and I'm off my game...

Whatever Happened To JJ The SWC Pumper?

Long time readers of this blog will remember the good ole days when the platinum supercycle was about to take off and JJ the Robot, who had every single cent of his retirement in SWC, was going to die rich.



Apparently, times have changed. In a sort of "where are they now" moment, I'm just wondering what happened to this dude.

I used to have so much fun with him.

Wednesday, January 14, 2009

Naughty By Nature, "O.P.P."

One of the worst ever.

The RO Report, "Plan C" Edition

Plan A is, you hit support and bounce hard. You clean up on longs.

Plan B is, you hit support, base and tank. You clean up on shorts.

Plan C is, you hit support and go sideways, giving false breakouts in both directions. You chop yourself to pieces.

For me, it was a Plan C day. For the rest of the RO, not so much.

You know those lab experiments they do with mice? To test their intelligence? They see how long it takes them to discover that food is hidden and stuff? Well I'm the stupid fucking mouse. I starve and my stiff body is lifted out of the maze. Other mice have nibbled on my feet...Enough said.

Out of 28 traders today, 19 were gross positive or 68%. Not great. What's nice however is that 9 traders made over $1,000 gross and a good number just missed that mark. I was #26 of 28... bloodied and chambermaided. As punishment, I will post bad music tonight.

Oh, and B pulled off a rare George Michael...

"Lucky Pierre" - Trader D, $6,015 on 292k shares traded.

2. Trader C, $5,360 on 139k shares traded.
3. Trader A, $5,130 on 145k shares traded.
4. Trader Z, $3,976 on 111k shares traded.
5. Trader N, $3,609 on 103k shares traded.

"George Michael" - Trader B, -$10,381 on 773k shares traded.
2. Trader H*, -$4,195 on 8,400 shares traded.

3. Trader S, -$1,966 on 47,200 shares traded.
4. Trader 6*, -$1,003 on 0 shares traded.
5. Trader O, -$257 on 25,400 shares traded.

The Great Cough

I stepped into the ruckus and heard the great cough.

Let me explain… Surrounding the brightly lit trading floor that I had just entered, were many smaller offices where some of the "back office" people worked. I don't actually know what these people did, but they were an odd presence. They’d shuffle by, ignoring the 23 year old dude shouting obscenities at his monitors while simultaneously trading and watching porn, and go about their business. They were mostly older and respectable looking and it was hard to understand how we could both be employed by the same company.

Had you spent some time watching their movements, you’d notice a pattern. They’d all routinely make visits to the corner office. There was never a light on in there and the door was never fully opened. Gray curtains were drawn over its large glass walls. Perhaps they were all part of a strange cult and worshiped there, or maybe, and this is more probable, the boss worked there. One thing was obvious, the man inside the corner office was very unhealthy.

He coughed all day long like a sick barking dog. A great wet cough that signaled impending death. The cough sounded like a mix between an oil burner starting and the sound mashed potatoes might make were you to hurl them against a wall. It was, in a word, disgusting, and it was the first thing that “greeted” me as I walked onto the trading floor.

WLACK! RRRUUUG! WLACK! WLACK! GGRHUMMMM!

In my two years at Anvil I only once caught a glimpse of the man responsible for "the great cough." And I only got close enough because I lost a bet. I peered through the crack in his office door and saw him bent over at the waist, wearing a black shirt, face red, eyes wide, coughing his brains out. Hacking.

But that cough was a presence on the trading floor as large as any trader. The man was always at work before anyone got there and no one ever saw him leave at night. Certainly he’d die in that office. One day he’d be coughing in there and something inside would give out and he’d bounce off the edge of his desk and land with a thud on the floor. They’d find his wet black lung lying next to his still body.

No one would attempt to revive him.

This dark office on the bright floor, this constant reminder of death was fitting. Death and trading made a good mix. I constantly think about death now. “Is trading aging me?” I wonder… “Is the stress killing me?”

Or just listen to the words and phrases you hear from other traders. “This SPY is killing me!” or “Whatever happened to that dude who blew up?” Even if you're doing well, you're "killing it!" Meanwhile, ask a trader who is getting smoked how he's doing and you might receive a simple one word answer as a reply, "Death."

If it’s good, it’s death. If it’s bad, even more death.

Stocks crash and they die. In an odd twist, traders are constantly seeking out the life blood of the market while risking death. We spend our time searching for a stock that has some life, hoping it doesn't kill you before you kill it…

It's a precarious position.

Anyway, while it was initially off-putting, I eventually used the cough for "perspective" reasons. Whenever I heard it, I thought of death. When I thought of death, I thought of the phrase, "this too, will pass." Bad trades die... good trades die... they all pass. Better not get attached to any trades. Indeed, as a daytrader, attachment to anything in the market is almost always a bad thing.

So looking back, "the great cough" taught me my first trading lesson.

I learned my second minutes later as I settled into my seat. Equality doesn’t exist on the trading floor.

Tuesday, January 13, 2009

R.E.M. "Find The River"

The RO Report, "Chop Fest" Edition

What a mess that was!

Starting at 2pm, we went into chop mode. A 100 point rip off the bottom due to some news release, followed shortly thereafter by an 80 point tank, followed again, by an 80 point rip and then silence...

It was an odd day all around, with the sectors that have been most beaten the last couple of days, oils and materials, leading the charge higher early. Then, out of nowhere, the REITs and financials joined the bullishness. Especially the REITs... where did that come from?

Basically, news played with the market today at really bad times. At 11:40 when we were near the top of our range, and again at 2:25 when we were near the bottom. If you're a trader trying to read a trend, this wrecks havoc with your system and sanity.

So the RO got hit. It has been a difficult start to this year. Out of 28 traders today, 15 were gross positive, or 54%. 3 traders made over $1,000 gross, and 6 lost over $1,000 gross. Bad numbers. I was #9 of 28. Green. Happy enough.

The Manservants win again!

"Chambermaid" - Trader A, -$9,725 on 408k shares traded.

2. Trader N,
-$7,814 on 84,400 shares traded.
3. Trader P,
-$2,357 on 200k shares traded.
4. Trader F,
-$1,666 on 101k shares traded.
5. Trader 9*,
-$1,126 on 0 shares traded.

"Lucky Pierre" - Trader B, $2,875 on 551k shares traded.

2. Trader C,
$1,460 on 75,600 shares traded.
3. Trader E,
$1,084 on 26,600 shares traded.
4. Trader Z,
$913 on 5,600 shares traded.
5. Trader L,
$607 on 23,300 shares traded.


Check the heatmap and some TA.