Black Car, "Black Tambourine"

Shoegazers of the world, unite!

White Stripes, "I Just Don't Know What To Do With Myself"

Normally, after a day like today I would post some depressing song... but today I feel good for some odd reason. I'm not going to try to figure out why.

Smoked

The worst part is, I saw it coming.

My first short order went into JCI this morning at 110.70, or about 5 points from the top. No, I didn't see the news that it was upgraded until later... rookie mistake... also a consequence of not trading in an office.

Why do I trade like that? Because I knew at *some point* the stock would turn tail as it did after 10:30 and drop. The problem, naturally, is figuring out when that point comes without having to lose thousands of dollars first.

I'm getting better at trading the hybrid market. But I realized something else today that is different. In the past, back when people respected me and the market "traded normal", if I was trying to "pick a top" like this, I'd put my buy stop a little above the last high of the day. If I was early, the stock would trade my stop and then fill me (30 or 40 seconds later) 20 to 40 cents higher. Clearly I'm generalizing here, but that's what it used to feel like. Even when you were getting squeezed, it happened slower and it was less violent.

With instantaneous fills (really, the speed still amazes me... I know you Nasdaq traders are used to it) the speed at which you can get squeezed (or clipped) is stunning.

It causes my eyes to literally glaze over because I can't even follow the quote action... the screen just kind of blurs, I see large green bars moving ever higher against my short position and my mind goes kind of quiet... and then something weird happens.

I imagine, for a brief second, being poor. I'm mowing a lawn on some estate... there is a repugnant man there... he is throwing an empty fluorescent green can at me and calling me a "Mexican" even though I'm Italian. I reach down and pick up the can... "Monster Energy Drink"... what the?

Anyway, The big spike today in JCI happened so quickly, that I just had that deer-in-headlights thing happen. And I felt it. It's a helpless feeling, but I can identify it now. The thing I need to train myself to do in the future, when I feel it happen, is just to cover and wait for the stock to settle down.

The opportunity will come, it always does. I just need to be more patient.

Despite today's smackdown, my spirits are still in good shape. I feel I turned some corner in May and that things are looking up. Thankfully, it's still early in the month.

This is a good reminder that I can't let big losses pile. I'm going to try a new rule... and I'm going to call it something gay like the 3-trade rule. If I trade a stock 3 times in a row and lose on each trade then I won't trade that stock again for an hour. Something like that would have prevented my JCI disaster today.

Without my blowup in JCI I would have made money today... so it goes.

Anyway, here's the stats:

P&L, -$1726
Best, TNH, $768
Worst, JCI, -$2188

shares traded, 35,800
stocks traded, 13, 5 positive, 8 negative
total trades, 199

Virtual Office, $285. Dow, -129.79, 13465.67.

Misstrade, $2534 on 13,000 shares traded.
Denarii, $249 on 3600 shares traded.
Dehtrader, $63 on 9600 shares traded.
EvolutionTrader, -$835 on 60,600 shares traded.
Me, -$1726 on 35,800 shares traded.

Well, I'm a little clouded in my perspective right now, but I guess you can say it was a volatile day, both in the market and in the VO.

Volume was treading lightly, lower than yesterday's run-rate until that final selloff... then it really picked up and closed higher than it was yesterday.

Concerning action? or a buying opportunity. Time will tell.

Sesame Street In The Hood

Some humor to take the edge off today... found this on the Fly's site under one of his comments... and I STOLE it! HAHAHAHAHA!

Elliot Smith, "High Times"

Sounds like this song is about being addicted to drugs.

Today I feel like I'm on drugs. Smoking and getting smoked by JCI.

Ah, the life of an idiot...

Brightblack Morning Light, "Everybody Daylight"

I'll let you find the video on Youtube and watch it there. Excellent song... the entire album is great. One of my favorites from the last year.

Ron Paul On The Daily Show

In case you missed it... btw, they seem to remove the Daily Show videos from Youtube rather quickly, so email me if the link doesn't work anymore.

My Bloody Valentine, "Sometimes"

Choppy Action Outside Of Midday

To be honest, I didn't know what to expect when I checked my P&L at 4 today.

I felt like I was getting smoked all day, but I think that's because I kept playing around with CMI and losing. The good news is that when I lost in him, I only lost with a few hundred shares at most. So it never got out of hand.

Volume on the NYSE really picked up today versus yesterday's levels, so it was a clear day of distribution for the Dow and S&P. But still, with the gains of the last couple of months, who really cares, right? If we see a couple of more days like today though, it will be time to start paying attention.

Anyway, I had a rather slow day. My best stock of the day was CF which, like TNH and POT makes fertilizers. The entire agricultural sector was the only place I found green stocks today. Every one that I have on my screen, DE, AG, CNH, LNN, POT, TNH, AGU, MON, CF and MOS were up for the day. The only other place where similar strength occurred was in the solar stocks.



Despite it's strength, CF was a choppy trade today. I really just got lucky by having a fairly large position in the stock when it spiked up just after 10:00. The good thing was that I recognized my luckiness and took profits near the top. Other than that trade, I lost in most of my other trades in the stock today.

The morning was crappy and the move in the market came midday. I miss a lot of midday moves because I trade very lightly, if at all, between 11:30 and 2. Ideally, I'm looking at charts and trying to find good ideas for the afternoon. Today, I mowed my lawn and got a haircut.

Anyway, I have to cut this short today because I have to be out of the house by 4:30.

Here's the stats:

P&L, $51
Best, CF $289
Worst, CMI, -$260

shares traded, 29,800
stocks traded, 12, 6 positive, 6 negative
total trades, 198

Virtual Office, $3655. Dow, -80.86, 13595.46.

Misstrade, $3520 on 14,800 shares traded.
Denarii, $76 on 2400 shares traded.
Me, $51 on 29,800 shares traded.
EvolutionTrader, $8 on 47,300 shares traded.

Well, it was a dull day for everyone except Misstrade today.

The market really just chopped around for the first hour-and-a-half and the real move downwards came at around 11:30. That's the time I typically chill so I had trouble gaining any momentum.

Today, I used the middle of the day to mow my lawn...the market used that time to mow down the longs.

So anyway, we'll try this again tomorrow.

Short Da Bull

Found a new site today called Short Da Bull by clicking one of "the Fly's" $75 advertisements... as if that dude needs more money right now.

Anyway, it's a fun site. Looks like it will only get better as new users find it and vote news stories up or down. Check it out.

Also, here's a link to an article by Van Tharp on "Getting Through The Tough Times".

Lawn Is Beautiful, Covered TNH

Well, not sure if this was the right thing to do, but I covered the TNH short with some limit orders, some at 94.15 and some at 94.79. The rest I just bought back at market at 95.47.

The more I come to terms with the new reality of the hybrid market the more I realize that market orders are simply dead unless you are trading very liquid stocks.

For the first 8 years of this job I traded "thin" stocks (typically trading less than 750k per day) with market orders and I consistently made good money. Since the inception of the hybrid market I have learned that strategy is no longer viable.

The first big change in my trading is that, I now actively cover positions, long and short, with limit orders only. I still don't like it, but it seems to be what works now.

Mowing The Lawn

Going out to mow the lawn with my new Brill Lawnmower.

This isn't a lawn and garden site or anything, but if you have a fairly small, flat lawn I would highly recommend this mower. It's quiet, doesn't require gas and there's no dust. It has completely changed the way I think about mowing my lawn.

My "mowing the lawn" short position is in TNH...

Hopefully it gets back down near 94 where I will cover some of my short. The market feels like it's really weakening now so we'll see what happens. 2283 declining issues on the NYSE.

Cortney Tidwell, "Eyes Are At The Billions"

A choppy day thus far in the market. TNH is rocking and rolling again as is the entire AG sector which really, besides airlines, are the only stocks I have in the green right now.

Here's another great song. This girl has a sweet voice but the best part about this song is the way it just blows up.

Spoon, "The Underdog"

From their new album.

Funny how PR works nowadays. Last night, I read an article in the New Yorker about the band's new album. I'm a longtime fan and it was a solid review. Then this morning, I wake up, check Pitchfork and they have this song posted.

And then I post it here. And the wheel keeps turning.

Black Francis, "Black Rider"

Black Francis of the Pixes covering the Tom Waits song, Black Rider.

Streetwide Issues

Well, today was a slow one. The volume on the NYSE was just above what it was the Friday before the Memorial Day holiday. Perhaps it's because between 10:30 and 12:00 there were "streetwide issues" that made trading risky.

I personally had a number of orders hung and I couldn't get anyone to tell me the status of those orders. So I basically had to sit on my hands and wait... perhaps that was for the best because I had a hard time finding stocks that were moving today.



My best stock of the day was TNH although, I hardly traded it at all. Here are the trades:

9:34:22 Buy 200 @ 87.99 (200)
9:34:53 Sell 100 @ 88.44 (100)
9:35:05 Sell 100 @ 88.53 (flat)
10:09:03 Buy 300 @ 89.46 (300)
10:09:56 Sell 100 @ 89.72 (200)
10:39:20 Sell 100 @ 89.80 (100)
12:17:07 Sell 100 @ 91.13 (flat)
15:45:44 Short 200 @ 91.92 (-200)
15:46:42 Buy 100 @ 92.14 (-100)
15:53:03 Buy 100 @ 91.61 (flat)

Notice the gap between 10:39 and 12:17... that's when the trades were all screwy on the NYSE. Funny thing is that not being able to sell during that 1.5 hours probably helped me out!

Also, one note about my short at the end of the day. Everyday, at 3:40 trade imbalances are published. Mostly you see them in big cap names.

Today, TNH had a very small buy imbalance, for 14,600 shares. Normally, I don't mess with imbalances I just watch them. However, I knew that people would see this imbalance and try to buy ahead of the closing price. I also knew that the imbalance was small enough that it would almost definitely be filled by the time the confirmation came out at 3:50.

So, at 3:50 when the the news wires said, "No Market On Close Imbalance" in TNH I figured it would force the mooks who bought at 3:40 to panic and sell. I was right about everything except my entry on the trade... I shorted the stock too early.

Anyway, just figured I'd let you in on my thinking on that particular trade. It was an imbalance play. Occasionally, they are worth trading.

I'm happy to start June in the green... even if it is just $116, it's a psychological victory. I did a good job at keeping my losers small. Besides AMR, which I was trading with fairly large size, I didn't have one loser over $100.

If I can string some winners together at the beginning of the month and have a "buffer" against going into the red, it will open me up to start taking more risk again.

Hopefully, the extra risk-taking will pay off.

Here's the stats:

P&L, $116
Best, TNH, $331
Worst, AMR, -$253

shares traded, 31,400
stocks traded, 17, 7 positive, 10 negative
total trades, 166

Virtual Office, -$1261. Dow, +8.21, 13676.32.

Misstrade, $700 on 10,600 shares traded.
Me, $116 on 31,400 shares traded.
Denarii, $37 on 1400 shares traded.
Dehtrader, -$394 on 7800 shares traded.
EvolutionTrader, -$1720 on 58,400 shares traded.

A negative day for the VO is a rarity, but today we are seeing red.

Misstrade had what he termed a "flat" day but still had enough in the tank to rise to the top of the pack. I made about $100 on my first trade of the day. Had I known the rest of the day was going to be one big churn, I would have stopped at 9:40.

On the downside, ET got a little smoked. Luckily, he started the month off well on Friday so he's not in any real trouble. Check his site to see what happened.

Let's hope we do better tomorrow. The volume in the market today was pathetic perhaps tomorrow we can see a pick-up.

A More Nuanced View Of Ron Paul

I imagine that with almost a year and a half to go before the presidential election that a lot will be dredged up about all of the candidates.

Ron Paul has generated a lot of buzz from the Republican debates because he is their only candidate that is anti-war and he is not a fear-mongerer. Still, there is a lot to be learned about the man and his past.

We will see how it all plays out. For now, I still can't say I would want to vote for any Republicans or Democrats currently in the running. Thank goodness it's early.