Tropicalicious

I found this video over on Lindsay's Wallstrip blog.

It's hilarious...

Stocku

the mysterious
dark pools of liquidity
killing the market

Yes folks, it's another red day here at Jurassic Park.

-$225 with 2 hours to go in the week.

I'll Believe in Anything - Wolf Parade

I love this song. Had to post the video. First song of the week.

Wallstrip

Wow, thanks to TraderMike I just found a great website.

Check out Wallstrip. "Where Stock Culture Meets Pop Culture."

Lindsay is just like Maria Bartiromo, except she has a sense of humor and she's prettier!

Hybrid Market = ECN

Check out this article from TradersMagazine.com that reports on a study that contends the NYSE is really no better than an ECN since the implementation of the hybrid system.

Big Board Loses Edge As Price Improvement Drops

Of course, if you trade the exchange daily, you probably already know that trading has gone straight downhill since the advent of the hybrid system. But if it helps you to know that it's not just you and that it stinks universally, then check out the article.

Stocku

An old dear friend of mine, who I hope to have guest blog someday, gave me a great idea this evening. "Write some stock market haiku," he said.

So, without further ado, here is my first jab at "stocku".

No green on my screen
Oh my god I am so smoked
Like a long-dead fish

End of Day 03/15/07

Unfortunately, I couldn't follow up my nice day yesterday with another one today. Worse, I had a "feeling" that today was going to be a choppy, do nothing kind of day but I got sucked in nonetheless.

Stats:

Net -$805

Best stock: TNH $418
Worst stock: SQM -$511

13 stocks traded, 4 positive, 9 negative.

154 total trades.

TNH - The Freaky Hybrid Trade of the Day!

As promised, here's what TNH looked like and why it wins freaky hybrid trade of the day honors.

The chart, though inexcusably choppy, doesn't tell the whole story. What's important is how erratically this stock moved on such light volume.

9900 shares moved the stock down 1.5 points in 20 minutes on mostly 100 and 200 share prints. There was never an offer shown to indicate any type of selling pressure. This move was simply 100 share lots smacking 100 share bids and causing the stock to move straight down.

In addition, the quotes were updated over 600 times during this time period, or about once every 2 seconds. An overflow of information but unfortunately, none of it was useful in helping one discern what was happening in the stock or why it was moving down. Remember the art of tape reading? For decades it was a reliable tool on Wall Street, no longer. The hybrid system has killed tape reading.

Trades like this make me and many others doubt the integrity and overall feasibility of the hybrid system. And this is no anomaly. Really, there are literally hundreds of examples of trades like this. And lest you think I'm complaining because I somehow got wrecked in the stock, that's not the case. It was one of my better stocks today. I just happened to be watching it at this time and thought I'd highlight it's craziness.

Freaky Hybrid Trade of the Day

I've decided to create a new daily entry into the blog that I am lovingly calling the Freaky Hybrid Trade of the Day.

The first stock that I am nominating for this dubious distiction is TNH and the freakiness that associated the trading in this stock today between 9:40 and 10:00am.

I will post a detailed analysis of the freakiness at the end of the day.

If you would like to nominate any stocks for the Freaky Hybrid Trade of the Day "award" please do so by adding a comment.

Impressive Rally Off The Lows On Good Volume

Well, the end of the day is near and that was a nice bounce we had there starting just before 1pm. Best thing about the action today was the volume. In contrast to the rallies of last week, this one had some good volume. I especially like the way the market went below the lows of last week and even dipped below 12,000. That probably scared a lot of the "weak sisters" out and may just give us a chance to rally further. Who knows though? I'm just a trader and thus, my long-term vision is awful. Read the IBD the next week and let them tell you if the correction is over.

Anyway, I had my first good day since the disaster that was last week. I didn't get stubborn and try to short the market during it's midday run. I got long some stuff and even increased my position size since I regained a little confidence throughout the day.

Here are some stats:

Best stock of the day: SQM $763 (this on an early morning short)
Worst stock of the day: GHL $295 (the one stock I shorted during the rally)
P&L: $2378

My top 3 stocks all were in the fertilizer sector. I always find it easier to trade a sector because if one is working, it gives me confidence that one of the others may work as well. I used to do this all the time with oil stocks, but it's been awhile since I've traded them actively.

The key for me is to wake early tomorrow and build on the confidence I regained today. It's more important right now for me to focus on keeping my losses small than to worry about making big trades for gain.

I'll work on making my end of day stats more readable and clean. I still have a lot to learn about getting this blogging thing right.

Forkcast now "embedded" on Dinosaur Trader

Well, I've now officially "teamed up" with Pitchfork to embed their playlist onto this blog. You can access it over there to the right. Just click the green "play" button.

Sweeeet. Blogging is fun. Trading is fun too, but you still need music.

Enjoy the music.

Not all of the songs are great. I'm gonna try to edit out the ones that drive me nuts and keep the others.

Hope you like.

Hybrid Webinar

Here's a link to the Webinar hosted by the NYSE regarding the Hybrid Market.

I found this minimally useful as far as helping my trading strategy, but at least it helps you understand the terminology on the Hybridtalk blog.

Anyway, here's the link.

Enjoy! Don't forget, you'll never get that 40 minutes back!

Midday Trading

Between 12 and 2 in general it's just not a great time to trade.

This isn't a rule or anything, but you should definitely think about paring back on your positions and being really sure before you initiate any new ones.

More often than not, I give back profits or lose more in the middle of the day.

Just a thought.

Forkcast

Here is a link to pitchfork's forkcast.

Even if trading isn't going well, at least you can listen to some good music.

And hey, if trading is going well, even better!

My current favorite songs are:

Lost-The Mary Onettes
To the East-Electrelane
That Summer at Home-The Twighlight Sad
Eyes Are At The Billions-Cortney Tidwell

Market trying to hold on...

Well, this morning, the crazy hybrid actually came to my rescue! I saw the futures getting stronger into the 9:30 open so decided to buy 400 POT at the open.

I was filled on the opening print of 12,400 shares at $154.92 200 shares later, the stock was trading over $156.50. Think about that. It took only 2000 shares, in 100 share lots mostly, to make the stock rip a point and a half. I sold all 400 shares into the "strength" over $156.50 and was happy with the profit. Of course, in subsequent trades in the stock, I lost about a quarter of what I made... but I'm not complaining.

What bothers me is that there was never any real buying interest in the stock. 2000 shares should just not move a stock so drastically. Because there was no buying interest and this was basically an artificial move caused by the thin and loose trading of the hybrid market the stock has since declined. It's now off over 2 points on the day trading near 153. If you were a "ma and pop" investor trying to buy this stock today you were simply done a disservice by the hybrid system. In the old trading world, 2000 shares at the open would have been eaten up and I doubt the stock would have ever seen $155.5.

Please feel free to comment on any crazy things you witness that are due to the wild fluctuations of the hybrid market. I'm really just trying to find my footing here in this new marketplace and would love to hear about any strategies that any of you are employing successfully.

Good hybridizing.

Volume on the downside

Light volume rallies and heavy volume sell-offs. Not really much smoke and mirrors here, the market is weak and weakening further.

I'm frustrated beyond belief as a lot of my shorts that I got washed out of in the low volume rallies, SPY, AOB, GOOG, and CFC have taken big hits today.

The only short I really caught today was FED and it's my best stock of the day. I'm currently up $587 in him and have covered most of my position.

My two worst stocks of the day are heartbreakers. AGU and MTG. I was short both, just a little early apparently... in fact, I've learned something about timing these last two weeks. IT IS EVERYTHING. You can be right ultimately but if your timing is off YOU ARE WRONG.

That simple.

Oh, and if anyone thinks the hybrid "system" hasn't made stock trading erratic, take a look at the trades in POT in the first half hour of the day. NYSE stocks never used to trade so wildly so often. I hope something changes in time.

End of Day 03/12/2007

Some end of the day volatility in the steel stocks brought me into the green for the day. Barely.

I traded 25 stocks today and made 289 trades.

I made money in 11 stocks and lost money in 14.

My best stock of the day was CRS. I made $349 in him.
My worst stock of the day was TNH. I lost $162 in him (see earlier post for trade anatomy).

Today was slow. That's right... yet another LOW VOLUME RALLY. And while I'm very bearish about this market short term, it's getting more and more difficult to watch these rallies slide by. I really need to rid myself of my bearish opinion on which way the market is going so I can free myself to trade intraday. Since I've been cut off from holding overnight positions for the time being, I should simply focus on intraday action.

I did a good job of cutting my losses today except in TNH. That trade was a nightmare.

I caught a spike in CRS at the end of the day and made over a point in the trade. I hate trades like that, but I'll take it right now.

It's all about getting my confidence back so that I can boost my position size again and get on the right side of trades.

Net $53.44

Anatomy of a (near) disaster

A slow day. Low volume... no volatility, "best not to take much risk", I thought.

Then how do I explain what happened to me in TNH? A momentary lapse of reason I suppose? Not sure how to label it, but I know it happens over and over again to myself and others trading the market. I also know that if it happens too much, you're definitely doing something wrong.

Perhaps I was still burning about getting stopped out of my TNH long at 51.62, I don't know. I do know that when I looked up and saw the stock spiking up to 55 that I thought it MUST be a short. The market itself seemed weak to flat and none of the other stocks in the fertilizer sector were showing such strength. So I began to short. I was immediately wrong. However, instead of covering and taking a 20-30 cents loss on my 400 share position, I got stubborn and decided to short more. I 'knew' that if I covered and took the loss that the stock would definitely turn lower.

I began to hope the stock would turn in my favor... a sure sign of impending disaster.

Anyone who has traded for any amount of time will tell you that hoping a stock will either go up or down means that you are in some serious doo-doo. By the time the stock got up near 56, I was short 800 shares and down over $700 in the stock.

The stock traded above 56 and then shot down 75 cents very quickly. I would have loved to cover some of my short here but it was nearly impossible... the spreads were showing offers in the 60 and 70 cent range. Even though the stock was trading in the 30s had I entered a market order, I would have been filled at the offer.

Thank you for nothing, hybrid market.

So I waited, hoping some more that this was the break I was waiting for...

However, the stock was not done going up.

As quickly as it shot down, it ripped back up, taking out the old high and posting a new high at 56.22. I had put a buy stop for 200 shares at 56 and was filled around 56.19 or so. Ugly... my loss in the stock was now close to $1000 and I was still short 600 shares. Sounds like fun, no?

56.22 happened to be the top. I ended up covering most of my shares around 55.20 and some around 54.70. I actually used limit orders because I have lost faith in market orders. Is it only dinosaurs that use market orders? I cut my loss in the stock from close to $1000 to only about $150 but it wasn't because I did anything right. I was slow to close out a losing position and I got burned because of it. The fact that I made back some losses by being short when the stock did eventually drop was really just dumb luck.

And, as is often the case, when you get into a bad situation with one stock all of the other trades you have on at the same time tend to suffer as well. For example, the strength (that I was shorting) in TNH made me take a look at the other stocks in the fertilizer sector. I thought, "Well, TNH is strong and POT is strengthening, maybe I should pick up some AGU 'down here' in case he rallies..." That was mistake #2. I bought AGU around 39.45-39.50 and all the stock has done since that time is slowly trend down. Last I looked, it was trading below 39.25. At least I nipped that loss in the bud.

Then, while all the excitement of the fertilizer sector had my attention, my FED short was actually WORKING. However, I was so concerned with my blossoming loss in TNH that I never added to my working FED position.

So my reasonable $150 loss from the morning grew into a nearly $1000 loss and has now settled in around -$250 for the day. It's been unpleasant.

I can't believe the market is up again!!!

The hybrid market... a small disaster

I'm down $150. I was up $150. There's just no trading this market right now.

Let me share a couple of frustrations...

OMG. I bought this stock around 10am near 39.50. About 10 minutes later I was stopped out at the low of the day. Nothing new there, that's been happening consistently for the last 8 years. What IS different is the way the stock traded immediately after I was stopped out. In the past, if you get stopped out but you still like it, you could get back in. Not today with OMG as it spiked almost a half point right after the stop-out... that's how stocks trade in the new hybrid market. Poorly.

Same exact thing happened with LTM at almost exactly the same time. Go figure.

One last frustration. My worst stock of the day is TNH. I bought it around a quarter after 10. Only 200 shares because I'm currently trading small and trying to get my confidence back. So I stop 100 at a new low and the other hundred just below the figure. The first 100 I got at a fair price losing 10 cents or so. The hundred I stopped below 52 however were triggered and I was filled at 51.62. The low of the day. And of course, (because this always happens when you are in a slump) the stock ran straight up after that. Argh.

So I'm down $150. My only good trade is LVS which I've made about 40 cents on. Volume is really light today. It's probably a good day to take things easy. Can't force trades.

If you like music while you trade, check the latest Forkcast on Pitchfork. Here's the link... it's like a mixtape of the best recent music they've reviewed.

http://www.pitchforkmedia.com/page/forkcast/41645

Trade well.

Monday not at all here

I had a wonderful weekend. So good, in fact, that I didn't think about trading at all and I didn't read any books on the topic either. My IBD was never delivered. I took that as a sign to just relax.

This morning I woke late, forgetting that the oil burner was scheduled to be cleaned. So, unshowered and unshaven I met a man who reeked of oil at the door and let him into the basement. He told me about his pets. He had a beautiful blue bird that he taught how to say, "Pretty Blue Bird!" that was eaten by a lizard that he normally kept caged. He also has ferrets... 6 ferrets.

I then had a brief conversation with my daughter. "I got socks! You got socks?" Then she showed me the wrapper of her fruit leather. "Mine is blue. Your pants are blue. They match!" Everything is amazing when you are 2.

The point of all this is that I haven't done too much morning research yet. The CFC news is worrying and, bearish as I am, I wouldn't be surprised if the market takes a hit.

We will see. Good trading!