A Trade In FAZ

I was going to start this post with a bold assertion along the lines of, "I milked this trade much like a perverted farmer might go at the teats on a cow."

However, you see that big run after 1pm? I totally missed that. It was a big miss, and I was humbled yet again by Mother Market.





Anyway, I caught the morning trade pretty damn good, so I'll talk about that.

It didn't start well. I woke up, wiped some sleep from my eyes and turned on my screens. FAZ was trading over $49 pre open. There was an HCPG level at $48. Not knowing about the market news that was to drop at 8:30 (Trader A would ask, "How come you never know what's going on?") I put in a bid at $48.10, hoping the $48 level would be support on a pullback.

At 8:30 when the news came out, my limit was hit and the stock immediately plummeted 4 points from my entry. How's that for a nice welcome to the trading day? It seemed bad, but in a way, it alerted me to the fact that FAZ had some good support at $44, or at least recent congestion. So I added to the position at good levels and by the time the open rolled around, I was basically back to flat on the day with only 100 shares remaining.

FAZ opened for regular trade and pushed higher before pulling back down toward the $44 level, where I added a couple hundred more shares at around 9:40.

Why was I added to this position? I had 3 reasons. First, I felt I was adding in a fairly safe area due to the recent congestion around the $44 level. Second, the HCPG level up at $48 was close enough (and I was bearish enough) that I felt it might act as a magnet. Third, and this is what really caused me to stay with this trade was the fact that on a 60-min graph, the downtrend line aligned nearly perfectly with $48.

So I felt there was a double magnet pulling the stock higher, and decent enough support just below my entry.

I'm not going to bore you with all the entry and exit details, but that was my thinking for the trade. Miraculously, it worked out according to plan and I did a solid job of exiting. I purchased again when it pulled back to the $48 level and made another nice, though smaller, trade.

I felt great.

Of course, then I moved the solid move in the afternoon, barely, and nearly lost my mind. But that's trading for you... you're a genius one moment, and a complete idiot the next. At least that's how it is for me.

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.

Trading MDR On An Otherwise Quiet Day

My day was really dominated by one stock. I traded several stocks on the day, but all with 100 shares, since I didn't have any confidence in their setups... I was just taking small gambles.

I liked MDR though, and so I watched it very closely, mostly because I didn't feel there was much else happening. Volume today, was pathetic (until the close, that is) and as it was the last trading day of the month, I planned on taking it easy no matter what.

MDR was on the HCPG watchlist last night for a move up to $62. However, they added a caveat that they thought the stock needed "more time." Apparently, the stock didn't want to wait. It spiked nearly 2 points in the first 15 minutes of trade before taking a breath, at around $61. At this juncture, the stock needed to base before it could move much higher, and so it was time to chill and watch.

About a half hour later, the stock worked its way back up to $61 and I bought a few hundred shares with an average price of $61.05. He moved up and so I bought 100 more at $61.20. Now, I threw some sell limits out there up in the $61.80-$61.90 area, but they weren't hit.

Instead, the fucker reversed.

I wish I had sold out of all my shares, but I wasn't quick enough. This is a problem I have with the target system... if I'm expecting the stock to trade higher, and it fails, I'm not quite sure how aggressively I should be moving my stops up. I probably shouldn't have held my position as the stock dipped below $61, but I did.

In fact, I bought a little more at $60.89 and $60.90. So I had 600 shares, which lately, is a large position for me.



But man... that's when "the stand-off" began. For the next 20 minutes or so, the dude traded in a dime range. My "out" was $60.80, and so having "the toad" (Wincity's technical term) trade pennies above this level for such an extended period of time wore out my nerves. I flaked and sold 300 shares at an average price of $60.86. The remaining 300 I left stopped at $60.80.

I noticed on the 15 minute graph that MDR was making some NRIBs, or something... I went over to Jamie's site to see what I could find... some answer or something. From what I could figure out, he liked the setup (meanwhile, Jamie, if you're reading, am I right to think those are NRIBs on the 15 minute graph from 11:00-11:30 today?). So when the stock cleared the top of the first 15 minute bar in the "set" I bought 200 more, at $61.17. So I had 500 again and the stock began to move in my favor. I actually felt confident that I was going to be right with this one.

Still, I flaked and sold 100 at $61.34 and another near the morning highs, at $61.42.

But with my last 300, I held, and I was fairly satisfied with the results. I limited 200 of the 300 out at $61.90 expecting resistance at the old high of $62. So far, so good. The last 100 shares, I really wanted to hold, so I set my stop low, at $61.25, giving the stock plenty of room. As it traded up, I moved the stop below the previous 15 minute bar.

After the stock cleared $62 with some "brio," I decided to move my stop just below the most recent price level. The low of the move, at 12:55, was $61.86, so I put my stop at $61.85.

Well guess what? The motherfucker came down and stopped me out, filling me at $61.78, the low of the fucking move. After that, it sailed back up over $62, reaching a high of $62.72 before reversing lower to close at around $62. So I was pissed. A good trade, but I still managed to get myself stopped out at the low of a move for some shares.

I finished the month with a green day, and so, I'll take it. But man, I'm itching to start sizing into these positions more. I felt confident with this trade after it cleared $61.17 the second time around... perhaps I'll start getting that feeling more.

Also, the fact that my worst trades of the day were made with small size I also take as a good sign.

Tomorrow I'll post a "monthly review" since I set some monthly goals for myself in May, I want to assess how I did. Also, bloggerdotcom has been teasing me with some new post that he may or may not have written... that will drop, eventually.

Have a good weekend, stock market bitches.

Here's the stats:
P&L, $122
Best, MDR, $243
Worst, RIG, -$89

4200 shares traded.
9 stocks traded, 4 winners, 5 losers.

My Next Child Will Be Named "Momojuicing"

It will be hard to break that one to Judy, but I have to do it. Read on for details.

It's a little late for me to be starting this post (when you have a 3 year old, it gets late very quickly) so I'm going to make it somewhat brief. It's too bad actually, because there's a lot I need to work through. Still, if I'm anyone's bitch, I am the bitch of Father Time.

So here goes... I got a little smoked this morning trying to grab the breakouts in EOG and ECA. I was early to the game in both instances and was down a few hundred.



My first buy came at 9:50. I bought 600 shares just before the guy dropped 45 cents. So, I lost close to $300 there. My second buy came around 10:00, just before he dropped 45 cents... so, I was down over $500 in the stock. I was very discouraged at this point.

Luckily, the third time was a charm. Of course, when the stock finally broke out, I only had 400 shares (I was buying with 600 the first two times) but happily, I held on nicely (been working on that, so happy it worked out) and made my money back and then some. I ended up over $300 in the stock.

I had similar trades in ECA. So really, the first half hour of the day was a nightmare for me but I made it all back and was up a couple hundred by 10:30 or so.

Buoyed by my success in these oil trades, I felt very confident buying into DO when it traded $120. It was an important level on the daily, and I went in with 600. I was filled at the top of the move.



I lost a half point on most and, embarrassingly enough, even more on my last 200 shares. I lost $377 in the dude. Completely my fault. No ass-rape or anything like that... just a bad trade.

Okay, so now we get to the fun part, or the reason why my next child, girl or boy, will be named "Momojuicing."

So via email Momojuicing and I are conversing. He's like, "Man, I wish I could blog like you..." and, "I wish I was smart like you..." And I was like, "Yeah, well, I'd name my second child "Momojuicing" if I could trade like you..." and he was like, "Oh yeah? Well check out this MA on a break of $198." The graph tells the rest of the story.



I short 300 around $198. I covered 100 at $197.25, 100 at $196.39 and the last 100 at $194.18. So I went from being down a few hundred to up $400 after this trade.

So I felt good about the trades. The name thing sucks, but, what can you do?

Anyway, the even better news came when I closed the day strong. I caught the bottom in MA with 200 shares when the news hit about ABK. I sold 100 after I made a point, and rode the other 100 for 4 more points. So MA turned into one of my biggest winners in awhile, at $1098.

Here's the stats:

P&L, $804
Best, MA, $1098
Worst, DO, -$377

21,000 shares traded.
15 stocks traded. 8 winners, 7 losers.

The Shorts Get Squeezed

I have a hard time going back on a day like today and making sense of my trades.

I mean it's tough to remember that at 12:30, it felt like we would be dining in hell again.

Just a few short hours later, people are ready to max out their credit cards and buy properties in Florida.

The stock market is filled with humor if you look at it in the right way. Basically, people are silly. "Human nature" is hilarious.

Anyway, the good news for me is that I didn't wait for the big afternoon rally to start making money. I was up $2000 by 10:30 due largely to an unbelievable long in FED.



This was a good and bad trade for me. Good in that I held 200 shares for the full 4 point move. Bad in that I sold out of another 500 shares between $32.40 and $32.80. But looking at the positives, I caught this one right.

You'll recall that a couple of days ago I posted stocks with high short interests. These were the stocks I was focusing on should we get a rally. This strategy really paid off. I know loads of stocks ripped today, but the moves in FED, JLL, CNS and ABK were ridiculous. Just having it in the back of my head that these stocks had heavy short interests helped my confidence level when trading them.

In short, my recent focus on research seems to be paying off in terms of helping my confidence level. I'll keep at it and the lame "good morning" posts.

So I sat on my $2000 early morning gain for the better part of the day. I churned a bit making a losing money, but not too bad. After giving back in the middle of the day recently, I cut my size so I wouldn't get too hurt.

The afternoon rally worked like this. At first, it really started on low volume and I was only a little involved. but take a look at the volume spike at 2:50 or so...



That spike told me not to worry too much about the 1x2 quotes on my screen. There were robots buying the market. They didn't show up in individual stock quotes, but they were there buying stocks with abandon.

So I started buying stocks with abandon. Not really... I'm still taking it easy... but I bought enough for now.

My two best afternoon trades were in OMG and JLL.

OMG was a break of the downtrend play. Here's a 30 minute graph where it shows up nicely.



I picked it up around $51.25 or so. It was a choppy trade, so I got shaken out a few times and had to reenter. It was pretty, but I made $700.

JLL was also a downtrend play, but it had the added benefit of being a short-squeeze play.

Here's the daily.



Unfortunately, I only had a couple hundred shares of this one. This stock trades thinly and frankly, it freaks me out a little. So, I took it easy.

Anyway, like I said in the VO post, I have a feeling trading could relax a bit up until FED day next Wednesday. That's not saying too much though since trade has been absolutely nuts. I just don't think we'll be trading over 2.5 billion on the NYSE again for awhile and I also think the VIX has topped out for awhile.

Still, it's earnings season and there's still lots of uncertainty and headline risk. Should be plenty of opportunities.

Here's the stats:
P&L, $6442
Best, FED, $1677
Worst, MEE, -$119

45,600 shares traded.
34 stocks traded. 25 winners, 9 losers

Best Pick By "the Fly" Ever...

"The Fly" called this one when it was trading in the low 30s. Luckily, I picked it up way back then and decided to hold it in my long-term account. Milk the farmer!

Stock Market Volatility

Yesterday I was, in a word, "de-balled." I just want to briefly touch on what it was like to be squeezed for over 50 points in FSLR.

It sucked.

Okay, moving on.

At around 3pm, my balls were handed back to me by "mother market" and I was able to resume trading. Actually, I was massively short at 3pm and got badly squeezed giving back $1000 of my then, $2500 in profits. "Mother market" is one fucked up chick.

However, due to the strength of that squeeze, I realized that it was probably a buy program. I took a look at C and GS, which were rallying hard, took a deep breath, and started to buy stock hand over fist.

Funny thing is that I really bought the wrong stocks. My largest positions, DSL, FLR and MTG all either shook me out or didn't move in a way that allowed me to profit. Instead, I made good money in smaller positions in CMI and FXI.

Basically, you could have bought almost anything and made money. That's my kind of rally.

Earlier, I caught the bottom in DRYS with 300 shares. I mean, not "the bottom" exactly, but close enough. I bought around $91.80 and sold at around $95.



Now, you can be a dick and ask my why I sold so "early" but the fact of the matter is that at 1:00 we hadn't entered "rally mode" yet and it still looked like the sky was falling. I thought it wise to take some profits and get ready for it to go back to the lows.

Anyway...

So, I'm a little shot right now. I'm going to let this post die and go play with my kid.

Here's the stats:

P&L, $5179
Best, DRYS, $971
Worst, GHL, -$422

82,100 shares traded.
22 winners, 11 losers.
461 trades.

The Robots Freaked Out

(First of all, be sure to try out my new fancy stock widget. Click on the blue box next to the stock symbols in this post. From that link you can click on the stock's profile, see a graph, get news, etc.)

At 1:00 I was busy emailing people and commenting on other blogs, whining about how I was getting smoked. My neck was killing me and I was making a mess of my keyboard with the Tiger Balm. It stank of peppermint in my office. Meanwhile, my daughter was downstairs "foot painting" with Judy and had just made a mess of a rug.

It was a bad day.

But you know, if you're feeling a little "no" all you have to do is add some "yes" to the "no" and things normally start to work out. Luckily, I have some friends in the ECB who were about to supply some "yes" for my day. Isn't life strange?

The first indication that something was wrong with the market was when I made money in a short trade. The stock was UBB.



I got short around $144 and covered just over $142. That got my blood flowing again and I realized that something was up. Weakness was really showing in the futures. Candles not retracing at all... red cliff forming quickly.

I don't know what I did or in what order, but I know I got massively short BEN and ANW. I also got short MLM and JRJC. All of those stocks turned into big winners for me. My other big winner, TNH, was a long.



I bought TNH when it was still in the middle of that first huge drop. I got filled on 400 shares at $121.98 and basically closed my eyes. It was like my PCP trade on my last huge day (in August). Sometimes, when things get wacky and extreme you just have to jump in... no price target, no "R" calculation... you just have to react.

Anyway, the stock retraced nicely. I missed the drop down to $116. What a fucked up stock.

If I was creating a "watchlist" today for future long positions, BEN would be on that list. Why? Because of the way it held up amidst the carnage. Also, JCI. Still, BEN was my best stock today because of the money I made on the short side during the selloff.



My worst stock of the day was DSL... he basically twisted the knife that he inserted in my back yesterday. I lost about $400 in him.

Anyway, like I said in the VO post, thank goodness we got some volatility today although I expect it to be short lived. But I guess you never know, perhaps Uncle Ben will freak everyone out tomorrow during his "talk." I mean look at this old picture of him... anything is possible.



Here's the stats:

P&L, $7443
Best, BEN, $2430
Worst, DSL, -$395

63,800 shares traded.
26 stocks traded, 19 winners, 7 losers.
234 trades.

Complete Chaos

Let me tell you, if you've never witnessed four, 2 and 3 year old children fighting over 1 chair (in this instance, a highchair, they all wanted to be the "baby") you have thus far missed out on a "tiny hell" that parenthood can throw your way.

Congratufuckinglations.

The "playgroup" that descended on my house yesterday just after the close was, in short, my worst kind of nightmare. Normally, I can be jovial and have fun with the kids. But yesterday, my plan was to get the heck out of here and head down to the beach since we have a great 4-5 foot swell running. However, I knew I was in trouble when at 4:01 I heard a male voice downstairs... a "Dad" had brought a kid... what the? And that meant I was compelled to stay.

It's like, you can't leave another guy in a house full of mothers and screaming children. It's part of the code... you just don't do it or you'll end up living in a trailer park someday with 11 red-headed step children and an ex-stripper as a wife.

A poorly aging ex-stripper. With tattoos in bad places that aren't as "taut" as they once were.

Anyway, that was yesterday. And the complete chaos that whooshed into my quiet and humble home kept me from the surf and from blogging.

Thus, I woke an hour before the sun to make sure I'd get some waves in this morning.

It was worth the lost sleep.

The waves were beautiful. It was a cloudy and gray morning here and 4 and 5 foot sets were rolling in from the mist. There was one guy out when I got there, an old guy who rides a beautiful wooden board. He was way outside, but I quickly realized that that was where I had to be to avoid getting rolled by the larger sets that were occasionally running through.

I had the best ride of my life today. I was straddling my board, bobbing around when I saw a set forming out in the gray. The winds here are calm, so it's been hard to really pick out the waves with ease... you need the winds to be a little offshore to make spotting the waves easier, but there was no mistaking the lines I saw forming out there.

The first one came and I let it through, the old guy jumped on it and I watched as he disappeared on the other side of the wave, the only thing visible to me was the churning water behind the break. That's one of the cool visions of surfing... most often you have the perspective of the waves breaking before you. When you're outside, you can see the back of the waves and the way it looks after they break. It's hard to describe, but you see the wave crest and then once it breaks it turns white and then the whiteness grows and spreads out into the surrounding water.

Anyway, I had only a second to appreciate the beauty of that first wave when I was picked up by the second. I barely paddled and got right up on it, very high on the wave and caught a nice 5 foot drop into the belly of the wave. The funny thing is that normally the break is a left but here I took a hard right to ride down the face and then did a left bottom turn to ride the wave in. It was a powerful wave with a good push and I must have been on it for a couple hundred yards because it was powerful enough to reconnect me with the inside waves. It was an amazing ride.

When the wave died, I laid back down on my board and started to paddle back out. With that first paddle, I also did a slight turn, to move the nose of my board into the incoming waves. That's when I felt the pull. My upper back simply gave out.

So, as I type this, I have an icepack strapped to my chair. My back is sore. It's not spasming anymore (it was no easy feat to paddle back in, luckily because my ride was so huge, I was only 50 or so yards from the beach) but it's uncomfortable. And I have to say, that after a ride like that and knowing that this swell should continue for at least one more day, that I'm really hoping it's feeling better by tomorrow morning so I can get in there again.

In March and April when my back was out, it was a nuisance, but no huge deal because I wasn't doing anything active anyway... now however, I find this injury to be completely frustrating... I just want to get out and surf again.

Anyway, so I got back to the desk really late. I made some great short trades this morning, most notably in DSX (the shippers tanked) and UBB.



I'm up nicely. Now, I'm going to lay down with ice, continue reading "The Dogs of Winter" and try to heal as quickly as possible.

Meanwhile, I hope my daughter is the only toddler I see all day.

A Big Day

At around 2:30pm, I thought it was 11:00am... no joke.

It's hard to begin this post. As you can imagine, I feel a little light-headed right now... almost shellshocked.

Look at the above graph of the Dow. I was long between 15k and 20k of stock at that point right when it decided to drop 200 points. I mean, I was in a bunch of stocks... I had no choice but to sell, because trust me, at 3:00pm, it certainly looked like we were going to test the lows of the day, we were only 50 points away on the Dow...

I liquidated every single one of my positions. And I called my wife up to ask her if I had enough "buffer" to trade the rest of the day. She gave me a big smile and said that I was doing fine.

I now know that I was up about $11,000 when she checked at 3pm. I'm pretty sure I lost close to $10,000 between 2pm and 3pm... with all of those positions, it was hard not to.

Anyway, I'm not sure if I should do this chronologically or what. Here's my best stock of the day, HXM.



Here are my trades from the last hour of the day in this stock:

15:17 Buy 500 @ 45.97 (500)
15:22 Buy 300 @ 46 (800)
15:24 Sell 100 @ 45.89 (700)
15:24 Sell 200 @ 45.88 (500)
15:27 Buy 300 @ 46.14 (800)
15:28 Buy 400 @ 46.26 (1200)
15:28 Buy 300 @ 46.41 (1500)
15:33 Buy 300 @ 46.56 (1800)
15:35 Sell 300 @ 47.13 (1500)
15:38 Sell 300 @ 46.82 (1200)
15:45 Sell 500 @ 46.86 (700)
15:57 Sell 200 @ 48.35 (500)
15:58 Sell 200 @ 49.14 (300)
15:59 Sell 300 @ 50 (flat)

This is less skill and more like, being in the right place at the right time. In fact, I'd love to have those 500 shares I sold at $46.86 back...

My second best stock of the day was PCP. I made $3900 in him. Again, mostly in the last hour. I had 500 shares for the entire move.



And then, there's UBB...



I traded 26,000 shares of UBB alone today. I basically built up a really nice position for the run from $92 to $100. Of course, I didn't hold it all... I was selling on the way up. But here's the part that sucked. I never saw it trade $100... and really, the next thing I know it was trading $96 again. 4 points gone in less than 5 minutes. I added at around the $96 level and had over 2000 shares when it plummeted down to $94. I got out, cursing. I had just given between $5,000 and $10,000 away in the stock in very short order.

However, I did buy back, quite aggressively, though not until it traded back up to $96. I was too battered in the stock to be buying when it was $93... at that point, I was sure it was headed back to the lows. That's about the same time that I called Judy in to check my P&L. I was really dejected at that point because I knew I had just thrown thousands away. In fact, and I know this may seem crazy now, but I asked her to check because I thought I might be close to negative on the day.

Anyway, while these were my 3 big winners of the day the real deal is that I had 12 winners for over $1000 today while my biggest loser of the day was $761. That's how the numbers added up like they did.

So TBSI was my worst. The reason? It just didn't bounce! I mean, it did have a move from $26 to $28... but I didn't catch it. Luckily, I never had more than 400 shares of the stock. I got chopped multiple times in him.



Sorry this post is lame but I'm shot. I'm walking away from the computer now and going to get dinner with friends. Perhaps after dinner I'll be able to reflect some more. Right now, my head is still spinning.

Here's the stats:
P&L, $28077
Best, HXM, $4239
Worst, TBSI, -$761

shares traded, 211,400
49 stocks traded, 33 winners, 16 losers
903 trades

NOTE: If you haven't already, please vote in my poll. Thanks!

Dinosaur Trader Provides Market With Liquidity

How I found time to trade 173,000 shares and blabber and make jokes all day on Wallstreak is confusing to even me. I think I type really fast.

Anyway, check out some of these graphs.

In the beginning, there was PCP.



See that third bar? That's where I bought. At $123.50 and $124 and $124.50. Now, in hindsight it looks great, but it had to be one of the scariest trades I've been involved in, ever. Why? Because I bought 500 shares to start, was filled at $123.50 and then the bid dropped to $115. Mentally, I wasn't really prepared to lose like $5,000 in two minutes. Why I immediately bought more is confounding. I guess I had lots of confidence that the stock would bounce at it's 50-day moving average.

It was extremely tempting to sell it all after it ran up to $127. But I was good and just gave the market dribs and drabs of my position all the way up until $132. It was my second best stock of the day, I net just under $4500 in the trade.

Here's another crazy one I got involved in only with far fewer shares.



I mean, what the fuck? Seriously!

I got long at around $106 with 400 shares. I sold half before $107. The other 200 I sold over $112. Then, to be piggish and greedy, I got short at $112.50 and covered around $109. It was wild.

But as the volatility can work in your favor, it can just as easily work against you. For example, I lost $1900 in TNH today playing it with 300 share positions.



And then there's TFX...



Stewie called this one out. These "Streetsmack" plays, or parabolic short scalp plays have been working like a charm recently. However, I got involved with TFX a little too early and perhaps too heavy at around $74.50. I had to cover around $76.25 for a big loss.

Then I got short again at around $77.50. Thing is that I got short less when it actually started to work. At one point I was down a few thousand in the stock and managed to trim my loss to -$1403. I'm short 400 into the weekend. The only thing that would drive this stock up 15 points in this environment is a fund having to unwind a short position... that's just a guess of course. I'd love to get anyone else's opinion.

Anyway, I just hope I don't become further fuel for that squeeze on Monday. We'll see.

Meanwhile, there was loads to watch all day. The fertilizer stocks (besides, ahem... TNH) were strong. Lots of money seemed to be moving there. The financials also bounced. In fact, my best stock of the day was AMG.



I was in and out of him aggressively all day long, trading over 22,000 shares of it alone. All of my profits came on the long side, most in the bounce between 11:00 and 12.

We'll see where this market takes us. Based on some of the wacky moves I witnessed today I feel like there are some funds being forced to cover positions. I expect more bad news to come out on the financial sector. I mean, all the banks and brokerages seem to be hiding the truth from themselves, their investors and the media. That doesn't sound good.

And I don't put much thought to the market when I'm not trading it, so I don't have any clue about what the Fed move means today, throwing dollars at the market like that. It smacks of desperation, that's all I can read. I mean, 3 moves in one day like that is "unprecedented?" That can't be good, right? They threw more liquidity on the market today than they have since right after 9/11. Odd, if everything is just fine, no?

(Note to Wallstreakers: I couldn't get on after 3pm or so...)

Anyway, here's the stats:
P&L, $10,528
Best, AMG, $6492
Worst, TNH, -$1892

shares traded, 173,000
44 stocks traded, 25 winners, 19 losers
708 trades

Stock Market Meltdown

As I discussed in the Virtual Office link, the market is currently in meltdown mode.

If you are a daytrader or a swing trader it doesn't really matter why the market is melting down, you're just happy to see some volatility again.

But I have to say, while I had a nice day, the morning completely sucked and I gave back a good chunk of change when it looked like the market was going to bounce at around 2:45.

If you haven't noticed, 2:45 is a very important time... Everyday, at 2:45 the market moves and I don't know why. If someone does know, please fill us all in via the "comments" section.

So it was a wild day of trading with big gains but also big losses. Such is trading when the stock market is a volatile beast.

My best stock of the day was AG.

I got short at 10:21 when it looked like the market was weakening and the stock couldn't recapture the highs of the morning. It worked out to be the perfect time but unfortunately, I covered most of the shares somewhat early, in the mid $38 level. The rest I covered just around $37.50. I made over $1200 in the stock.

My second best stock, ITU, was at one point, a huge winner for me that I gave a lot of money back on during the 2:45 squeeze.



At around 1:45 I noticed that UBB another large Latin American bank stock, was getting smacked around. I took a look at ITU and saw it still trading up. With the market just beginning to melt, I started getting short. I got heavily short (for me) and sold about 2500 shares between $47 and $46.80. The stock dropped quickly to $46.50 and then bounced back up to the $46.80 level. Then, it dropped hard to the "unched" level on the day. I covered some here, but not enough and the stock ripped back over $46.50. This is where I screwed up, covering most of my position.

In retrospect, this was a boneheaded move. The problem was that I had a lot of trades on and at that particular time, I was getting squeezed in most of them. I didn't even take a look at the chart... I just covered and made only a little on my initial trade. The stock dropped from here on out, and I got short again, but with a smaller position.

My worst trade of the day deserves a little attention because it had me getting back into a very bad trading habit, revenge trading.



I bought VNO at the open on the strength of all the "interest rate sensitive" names however, I never got a report back from the NYSE. The stock traded up over $107 but then back down to $106.75. I called my company to get some report and they said the NYSE was just crazed and not getting all reports back quickly. True story. Anyway, they called down while I waited on hold and got my report. When I got the report, I immediately sold at $106.80 and lost the 20 cents on my 400 share purchase. No big deal.

However, take a look at that next 5-minute bar... the stock spiked up to $110! Man was I pissed! So, what'd I do? I bought... and the stock plummeted down to $108. I churned the stock for the next half hour, angrily, sometimes making and sometimes losing but always trading angry. I lost over $300 in the stock before I realized that I was trading like a drunk and took the stock off my screen.

We will see what tomorrow brings. I'd love for you to share your stories on the day. Feel free to fill us in via the comment section. Days like today are fun to talk about.

Here's the stats:
P&L, $6147
Best, AG, $1241
Worst, VNO, -$301

shares traded, 99,600
30 stocks traded, 19 winners, 11 losers
354 total trades

The Importance Of A Floor To Stand On

I was going to name this post something like, "RIP 'Slump' March 2007-July 2007" but I decided against that.

I think that instead I'm going to treat "the slump" kind of like we treat the "War on Terror" here in the U.S. It's going to be a never-ending battle that requires vigilance and constant changing of tactics.

That said, I won a pretty significant battle today, no doubt.

My "best" trade of the day also happened to be downright lucky. It was a short in TBSI.



I was turned onto this stock over the last week by the guys in Wallstreak. It's a shipping company and therefore, it often trades along with the price of crude and with oil stocks in general.

It was relatively strong going into the Oil Inventory data that was released at 10:30 and so maybe I shouldn't have been shorting it at all. However, with the weakness in every other shipping stock, including the other recent leader DRYS, I took a shot.

Here are my trades in the stock:

10:14:13 Short 300 @ 38.85 (-300)
10:14:27 Buy 300 @ 39.04 (flat)
10:23:15 Short 200 @ 38.65 (-200)
10:30:36 Buy 100 @ 37.70 (-100)
10:31:39 Short 300 @ 38.09 (-400)
10:38:05 Buy 100 @ 37.65 (-300)
10:44:04 Short 200 @ 37.78 (-500)
10:50:09 Buy 300 @ 34 (-200)
10:50:49 Buy 100 @ 34.18 (-100)
10:50:54 Buy 100 @ 34.20 (flat)

Never in my dreams was I expecting the stock to drop to $34. I was thinking it could go to "unched" on the day, but I didn't see that drop coming. In fact, the low of the day was $33, so I left a point of profits on the table. No complaints, I made over $2000 in the trade.

Anyway, at around the same time that TBSI was falling off a cliff I made another good trade. This time in a recent favorite of mine, MOS.



Again, I found this trade by watching all of the fertilizer stocks decline. They were all weak, though again, I had no idea that they were all about to fall off the face of the market.

I initially short MOS up around $38.80 because it was struggling to regain it's highs from the early morning and the rest of the fertilizers, most notably MON, were coming off. Again, I was hoping the stock would get to it's 50-day moving average line and then stabilize, setting up an opportunity to buy.

It shot straight through the MA. In fact, I covered way too early and then got long. I took a loss in that initial long but kept watching the stock. I bought back a little later and rode it up for a nice retracement. I made a little over $1500 in these trades.

I also had two other fertilizer stocks that I traded for over $1000 in gains each, CF and TRA. Both were short trades made at the same time I was shorting MOS. So, the charts speak for themselves.





On the other side of the ledger, I made bad trades in ARD and BTJ today. I bought ARD during it's slide lower in the morning and then missed the bounce. BTJ, I bought once and lost a straight point on. Sometimes that happens in BTJ, he's a lunatic. The good news was that I didn't get stubborn and try to fight the stock or make a revenge trade. I took my loss in BTJ and walked away. -$392 on 400 shares traded.

So back to the post title. Surely the market has been better for trading these last few days and that has something to do with my recent success. However, I also think that calling my risk manager and placing a very tight loss limit on myself has done wonders for easing some of my mental strain. It was kind of like admitting that I had a problem and that I needed some help in getting my discipline back.

Simply put, I no longer feel like I'm trading without a net.

During my big years, I was in an office. I can be a "competitive shit" and I wanted to beat the other traders because frankly, I thought most of them were meatheads. I never had big losses. I knew they were the hallmark of a bad trader. I just focused on making good trades, taking long lunches and letting the boys with the big egos scream red-faced at their 12 monitors and talk about their fancy cars and their country clubs.

Wanting to beat those idiots made me a better trader. And for the years I traded in the city, I beat most of them day in and day out. Back then, my competitiveness provided me with a "net".

Since I've begun trading from home, I've had a hard time channeling my competitive spirit back into the market. Despite the fact that I'm a trader and I like to trade well, I've never been a materialistic guy. Making money for the sake of making money has never interested me.

So then I became a father and the entire focus of my world turns towards my daughter. Making money then became more about "security"... having enough for her college, having enough for (if you can believe it) her nursery school! This led to a classic mindfuck. Every time I lost money it became anxiety. Every new loss turned into "how can I afford to send her to school?" etc. This is a very poor mindset to trade with because it killed my ability to want to take on any risk... I became afraid to lose money and ironically, this led to me losing money over and over again.

Over the past few months, even before I contacted my risk manager, I started working on taking my foot off the pedal. I took up surfing again. I started walking away from my computer in the middle of the day... I began to trade less and I began to search for perspective again. These efforts, combined with the "net" from the risk managers have given me a floor to stand on again.

Hopefully, the trend has finally changed here.

Here's the stats:

P&L, $6817
Best, TBSI, $2078
Worst, BTJ, -$392

shares traded, 63,200
22, 14 winners, 8 losers
total trades, 300

MVIS Inks Deal With Motorola

Thanks to "the Fly" for getting me involved with this gem at $4.05.

Of course, MVIS will have to print $60 to make up for the horrendous year I'm having, but $6 is a good start.

Here's the link to the press release.

Silver Linings

Yes, I lost money today but I'm going to focus on my good trades for a change.

My bad trades were not good, but they weren't bad in the way they used to be bad. In the past, when I had a big loser, it was normally because I was in and out churning the stock all day. Today, my worst stock was CF and the losses came in two trades. So, while I didn't trade the stock well, there was no fighting the stock or revenge trades... I'll take the $523 in losses and learn from them.

So on to the good stuff.



At around 11am, I noticed MLM break it's opening range from the morning. So I took a look at VMC, a related stock to see how it was acting. It was struggling to regain it's highs. I threw in a short order and was filled at 118.84. Only 300 shares. I covered 100 at 118.11, 100 at 116.32 and 100 at 116, netting just over $600.

This was a good trade for me because I didn't rush to take my profits. After I covered the first 100 shares (which as happens now, I realized was a mistake) I trailed the stock down with stops. It moved nice and smoothly. What I could have done better was add to the position.

My next good trade was in FLR which I highlighted earlier. After that lunatic plunge I began to watch the stock. My first hint that something was wrong with the stock was that buyers didn't rush in to pick up the relative "bargain". After the initial steep sell-off just after 11am the stock couldn't regain it's footing.

I watched it chop around 104 the whole time that the futures were rising. Once the futures started to break, I put in a short order and was filled around 104 for 300 shares. Once it dropped a bit, I added to the short, another 400 shares at about 103.65. This was a good thing that I failed to do in my VMC short.

Anyway, I covered most of the short under 103 making this my second best trade of the day at $585.

The thing that really hit home today was that I could have good winners with not many shares if I let them run. So tomorrow, I am going to initiate my positions with less size and add when they work in my favor. My old way of trading saw me buying most of my shares right off the bat. Since I'm allowing myself greater movement in the stock before I cover I need to work on position sizing so that when I'm wrong (like in CF) I don't take big hits.

Here's the stats:

P&L, -$603
Best, VMC, $606
Worst, CF, -$523

shares traded, 32,000
stocks traded, 28, 10 winners, 18 losers
total trades, 165

Thanks Russell!

I won't lie to you, I freaked out today.

And that despite my mellow morning in the sun and the surf.

I rushed back from the beach and due to my enthusiasm to get started, sat naked, that's right, naked in my office chair as I compiled a whole new quote screen to devote to the Russell Rebalancing. Could I have done that yesterday, or even, (gasp) the day before? Yes. But then I wouldn't have had the excuse to sit naked in my office chair.

My daughter was the first to state the obvious...

She: "Daddy, you naked?"

Me: "Yes, Daddy is naked."

She: "Daddy, you working naked? That's silly! (laughter)"

Me: "Go eat some breakfast with Mommy. JUDY! What the fuck! I told you I'd be busy today!"

Anyway, so I noticed, when going through the Rebalancing list which I posted links to here a few times that a lot of the insurers I like to trade were being added. Among them, RE, PRE, ENH, and AXS. There were more insurers, but those are the ones I typically trade. I also found a few stocks that I had never traded before but were at good prices and near highs. Among them, AWH, AYR, RRR, and LBY. There was also CPA a stock I trade occasionally.

So after the first 15 minutes passed, I bought small positions in each of them and sticking with my new "style" I planned on holding them. Unfortunately, every single stock dropped pretty rapidly. Not one of them made the holding part easy... on top of this, I got jacked in SPG and VNO. Then I lost in CF and MOS. It was, in a word, a bloodbath.

Things settled down and all of the stocks I mentioned that were on my Russell list dropped into ranges. I bought more in these ranges, throughout the day. Besides these adds, I had 3 winning trades in TNH and I net about $750 in them. So that helped my mental state, but not too much because I was still down significantly, probably a few thousand dollars.

This is how things went when the first imbalance was reported at 3:30.

It was in CAI, a stock that was not on any list I could find. I thought this was interesting. Because no other imbalances were coming out I was able to watch CAI trade. It spiked up quickly, like a hybrid trade, and then settled down. This gave me a good plan on what to do with my positions. I added aggressively and then put sell limits 30-70 cents above where the market was trading.

All of a sudden, the insurers began to spike.






Which was great. I took a lot of the profits on the way up, only holding 400 or 500 shares into the actual imbalance.

But the one that worked best for me was CPA simply because I had built up a good position in him throughout the day. Early, he was one of my worst losers but I was able to hold and get out of 1000 shares near to top of the move. I had placed sell limits at 65.50.



And that was the day. There were a couple of names on the list, LBY and RRR that I had big positions in (2000 shares each) and had to take losses on because they didn't have buy imbalances. Actually, LBY had a sell imbalance! And another that failed me was ARWR, a "fly" stock. He too had a sell imbalance despite being added to the Russell Micro index. I took a decent loss on him.

But overall, the Rebalancing net me close to $5,000. It was a tough one to sweat out with the market acting like it did today, but it worked out.

And if you read this blog daily, you know how thankful I am right now for green days.

Oh, and a tip of the hat to Ray over at Hybridtalk for doing such a great job getting the information about the rebalancing out. Perhaps I won't need you to pass my resume around after all!

Anyway, here's the stats:

P&L, $1736
Best, CPA, $1021
Worst, LNN, -$578

shares traded, 42,400
stocks traded, 19, 9 positive, 10 negative
total trades, 151

Maybe We're Onto Something Here

I couldn't tell you the last time I traded and nearly made 50 cents for every share I traded... it's been a long while. I felt like Misstrade out there! Was it the surfing, the new trading style, or HPT joining the VO? We may never know for sure...

Anyway, the day started off with a bang as LNN reported excellent numbers and gapped up a couple of points. I stayed long 400 overnight into the earnings report.



It was my best stock of the day as I net $1281 in him.

My next best stock was AGU.



After the stock ran to new highs around 11am, it pulled back sharply. The reaction bounce at around 11:30 couldn't bring the stock to new highs, so I began to short. I short 400 at 44.80 and then 200 more at 44.77. And then I had to be patient.

I covered 100 shares at 12:16 at the price of 44.42 and was immediately angry with myself. The market was feeling weak, other AG names were showing signs of weakness and I knew I should have just held.

My next cover came at 1:38, 200 shares at 44.15. While in retrospect this too was an early cover, I didn't think it was too bad because the stock hit the figure and bounced sharply. Also, at that point, the futures looked to be improving.

I covered the last couple hundred shares very near the close, around 43.60. So this was a trade that I was in for 6 hours. That's a very long hold for this trader. I net $453 in AGU.

Anyway, I had similar trades in CF and DE netting about the same. Both trades were shorts and in both case I again didn't jump to cover. In short, I made good trades in the names.

It has always helped me when an entire group of stocks is acting strong or weak. Today, the entire group of AG names started acting weak at about the same time. Check charts of POT, TNH, CF, DE, CNH, AG and MOS. There was a lot of money to be made in a sector trade here today. When my confidence builds again, trades like that can be month-makers. Patience...

Anyway, I had one other good trade today in BEN. I caught a 4 point drop between 1 and 4pm. The only bad news about this trade is that I only had 100 shares. I had limits for more above where I got the 100 shares off but they were never hit. Still, I was very happy that I didn't cover into the spike-down at 3pm. I could have, but I decided instead to see if it would run further. It did and I made an extra $100 because of that patience.



As important as my winners were today it's worth noting that my biggest loser was for -$36 in AB. Also important was my winner to loser ratio, 8 winners and 2 losers.

So while LNN started my day off with a bang, it was less than half of my total gains. I simply traded well today and I hope I can keep it up tomorrow.

Anyway, here's the stats:

P&L, $2977
Best, LNN, $1281
Worst, AB, -$36

shares traded, 7000
stocks traded, 10, 8 positive, 2 negative
total trades, 55

Solid Day

Today felt good. Not one bad loss or stubborn trade. I didn't fight the market. I missed the rally between 1 and 2 because I really don't like to trade those hours, but didn't chase it. Had I chased, I probably would have been buried. Instead, I waited and got short again.

This tape is weak.

I wouldn't be surprised to see a couple of mediocre bounce days here and there. Tomorrow should be a telling day because of all the data to be released. Should be fun.

Anyway, once again, TNH made my day. Here are the trades I made in him.



9:33:50 Buy 100 @ 95.35 (100)
9:34:37 Sell 100 @ 95.60 (flat)
9:40:03 Buy 200 @ 97.54 (200)
9:41:00 Buy 100 @ 97.10 (300)
9:42:52 Buy 100 @ 97.86 (400)
9:44:32 Buy 100 @ 97.33 (500)
9:45:12 Buy 100 @ 97.73 (600)
9:47:40 Sell 200 @ 98.00 (400)
9:49:02 Sell 100 @ 97.65 (300)
9:50:40 Sell 100 @ 97.50 (200)
9:50:53 Sell 200 @ 97.42 (flat)
11:23:12 Buy 100 @ 94.64 (100)
11:26:44 Sell 100 @ 95.64 (flat)
11:35:27 Buy 100 @ 94.86 (100)
11:47:22 Sell 100 @ 96.08 (flat)
11:55:51 Buy 100 @ 95.89 (100)
12:13:35 Sell 100 @ 95.83 (flat)
14:52:20 Short 100 @ 94.42 (-100)
15:00:42 Short 100 @ 94.93 (-200)
15:18:40 Buy 100 @ 92.91 (-100)
15:27:33 Buy 100 @ 92.25 (flat)

It was somewhat frustrating because I had a hard time building my normal position in him today. But again, I showed restraint by just taking what I could get where I wanted it instead of chasing the stock all over.

Anyway, besides my win in TNH I had solid gains in ARD and CMI. My only triple-digit loser was in WCG. One trade, one loss. Kept me sane.

In other news, I raised some cash in my swing account (see the stockalicious ticker near the bottom of this page) by selling my laggards WAT and ARWR. It was tempting to want to sell my big winners, MVIS and KOG to lock in the gains, but I thought it was a better idea to sell the stocks that could turn into potential large losers faster. Needless to say, at this point, I'm keeping a close eye on the general market. It could be a good time to start scanning for some shorts.

I'm looking forward to trading tomorrow. I can't remember the last time I was really interested to see how the market would react to economic news, but intrigue is back!

Anyway, here's the stats:

P&L, $1230
Best, TNH, $737
Worst, WCG, -$114

shares traded, 29,200
stocks traded, 21, 11 positive, 10 negative
total trades, 203