Bob Dylan, "Chimes Of Freedom"

Slow And Steady

I tend to hate trading gap-down/gap-up days on the open. So I exercised a bit of restraint and discipline and stayed away for the first 10 minutes of chop.

My next 3 trades were all solid winners. I short AGU twice and made over 50 cents the first time and 40 cents the second time. My third trade was similar as I made a straight point shorting MOS. Thing is, since I'm still taking it easy, I was only trading 100 shares.

So while I didn't make huge money on these trades, they were successful. The more I make good trades and gain my feel for the market again, the more confidence I'll have. In time, I will build my size again and the money will come.

Anyway, I short AGU because he opened and tried to trade up through the low made yesterday afternoon. So when he traded above $70, I thought he would run into resistance because the market was so weak. You can see it here on the 30-minute graph.



My best stock of the day was COH. I'm really liking this stock lately because it trades fluidly and it hasn't been as volatile as the other stocks I normally trade so it's been a good stock for me to watch. I short him when he broke the opening range low and made a little money. However, I made more on the afternoon long.



I was looking long even though the market was getting smoked because the stock stabilized after some heavy down volume right around noon. After that, it started to show good volume bars on the upside and weak volume whenever it traded down. Also, TIF, another specialty/high end retailer was showing signs of life.

My worst stock of the day was CNX. This was a simple pair trade gone wrong. I was watching the other coal stocks go negative on the day and short a little CNX thinking it would play catch-up around noon. It did not.



I could blame myself for trading in the middle of the day. However, it wasn't a big disaster. I took the loss and let it go. As it turns out, I should have kept watching because it dropped sharply in the afternoon session.

Anyway, another good day of confidence building and learning. I'm getting my feel back.

Here's the stats:

P&L, $295
Best, COH, $144
Worst, CNX, -$119

11,800 shares traded.
10 stocks traded, 7 winners, 3 losers.

Virtual Office, $2614. Dow, -277.04, 12,501.11.

Misstrade, $3246 on 4000 shares traded.
Denarii, $624 on 400 shares traded.
Me, $295 on 11,800 shares traded.
Wincity, $84 on 350 shares traded.
Akalawoo, no trades.
Retardo, no trades.
Dehtrader, -$224 on 1770 shares traded.
Sanglucci, -$441 on 3400 shares traded.
OBAT, -$970 on 12,752 shares traded.

Wow, another bloodletting in the markets.

My father called me today and asked me if he should be worried about his portfolio. That means the market is starting to worry the "common man" who normally cares more about his golf game, or favorite football team.

Should the "common man" join the institutions in selling this market, a new element of fear would be thrown into the mix.

I mean, I imagine that demographically there are a lot of baby boomers who are retired, or close to it, who are wondering if they want to sit through another bear market.

When you get really, really old, why not just let your money grab 5% in some fixed income investment instead of chasing the 8-10% historical average that the market provides? Is that 3-5% extra worth the risk when the financial system looks like it's about to melt down, an idiot runs the country, and a bunch of clowns are trying to supplant him?

I'm thinking no, but then again, I'm not old yet.

Anyway, volume exploded today after yesterday's mediocre levels. We traded over 1.8 billion shares and the VIX ran up a bit, .53 to 23.43.

I found the VIX interesting today. I would expect it to run more on such a down day. Also interesting is the fact that one of the more disciplined traders in the VO, OBAT, had a big down day. This just shows how damn hard trading is... everyone has their dog days.

Let's see what happens tomorrow. Earnings season is upon us. The volatility may just be starting.

Morning Articles Of Note

• Citigroup Posts Record Loss
• Biofuels... Europe Ahead Of The US Again On Green Policy
• The Commodity Boom, it's different this time. Hey, at least there's no inflation!
• When I'm 81, I'll be retired.
• Jimmy Carter: I Got What America Needs Right Here.
  

Citigroup: Net Loss of $9.83 Billion & $22 Billion In Writedowns

And then it trades higher...



Oh good. Back to reality.



NOTE: C also cut its quarterly dividend 40%.

Good Morning

Time: 6:44
Mood: Guilty (I snoozed)

The Byrds, "I Wasn't Born To Follow"

Building

As you know, I woke up this morning in a good mood. I wasn't just in a good mood, I had been anxious all weekend to trade. I have to say, it has been awhile since I was so motivated to trade.

Unfortunately, when I opened my software, I had a few problems. I won't bore you with them, they have to do with my transition. But basically, I couldn't trade early.

So I barely traded. Because I could fit it all on one screen, I decided to cut and paste my order window, for your entertainment. There it is.



As you can see, I'm trading with very light size still.

Anyway, I had a decent day. I was very happy about my trades in COH, both sides.



My first trade came right around 10am, when the stock rallied hard off the lows up near the opening price. I figured it may hit some resistance, and with other high end retailers getting spanked (TIF, ZLC) I felt pretty good about the trade. So I went size and "smacked" the stock down with a 200 share short order.

I covered 100 at $26.11 because I still have remnants of suckiness. My original plan had my stop up at $26.30, or over the opening range high of the morning. For whatever reason, I got nervous and covered half. Of course, I kicked myself immediately afterwards as the stock broke the figure and headed below my original sale price.

Anyway, you can see what happened on my order screen. When I covered the 200 shares around 12:25, I meant to only cover 100 but entered 2 orders accidentally. A total learning mistake.

I also caught some of the move on the way back up after 2pm. This time, I "sized up" with a 500 share order and a 100 share add. As I get more comfortable with my software and the market again, this will be my normal position size for most stocks.

My worst trade of the day came close to the close in DSL.



At around 3:40, DSL broke its downtrend on the 5-min on huge volume. I bought 300 shares a few minutes later. Unfortunately, the stock topped out and rolled. I placed 3 separate stop orders in the stock, one below the green bar that broke the downtrend, one below the prior 5-minute bar, and one at the low of the afternoon. Each of them were hit and I took the loss.

Despite my low volume and P&L total, today was a great day for me. I took a lot out of my trades and felt very in control and emotionally stable. I mean, I didn't get emotionally involved in any one trade... I entered, set my stops, and for the most part, let them work or fail.

I'll be in bed early again and hope to wake and do more research tomorrow.

Here's the stats:

P&L, $149
Best, COH, $162
Worst, DSL, -$65

8 stocks traded, 5 winners, 3 losers
4800 shares traded

Virtual Office, -$3637. Dow, +171.85, 12,778.15.

Me, $149 on 4800 shares traded.
Dehtrader, $102 on 1100 shares traded.
Wincity, $56 on 650 shares traded.
OBAT, $32 on 16,800 shares traded.
Retardo, vacationing
Akalawoo, no trades.
Denarii, -$25 on 600 shares traded.
Sanglucci, -$492 on 4000 shares traded.
Misstrade, -$640 on 1600 shares traded.
Evolution, -$2819 on 92,600 shares traded.

It was a slow, low volume, low volatility day in the market. We traded just over 1.4 billion shares on the NYSE and the VIX dropped .78 to 22.90.

It's like, over the weekend, people forgot that the market is going to zero, and decided to come in and buy stocks today with very little conviction. This created a very wishy-washy type of day.

But despite the overall trading malaise, there were some ridiculous moves made in the Agricultural and Fertilizer sectors. These sectors just keep on giving volatility to stock traders.

Meanwhile, the VO basically got smoked. You'll find that in this type of trading environment that the cream really does rise to the top.

More on my "huge" day later...

Lindsay's New Digs

I'm guessing her new vlogging gig has something to do with political culture and events. That's cool, she can still do nude scenes now and then...

Au Revoir, Lindsay!

Lindsay has moved on.

One can only hope that her acting career fails and that she ends up in b-movies doing sex scenes, sooner, rather than later.

Kidding, Lindsay! (As if she reads my third-tier blog.)

People Hoarding Money, Food

It's an interesting coincidence, but the last time personal consumption declined was when "Bush, The Father" was our president back in 1991.

From the article: "...the country may be experiencing a rare decline in personal consumption, not just a slower rate of growth. Such a decline would be the first since 1991, and it would almost certainly push the entire economy into a recession in the middle of an election year.

There's something about the Bush family that just doesn't inspire confidence in regular people. Check the full article, below.

Americans Cut Back Sharply On Spending

Good Morning

Time: 6:30
Mood: Positive

"Volatility Mascot" Tryouts

Ned's Atomic Dustbin, "Grey Cell Green"

Ah, the early 90s.

Patience vs. Anticipation

I had a bad day. But I didn't have any one really bad trade. I just had many 25-30 cent losers.

Looking back at some of the trades, it appears that I'm anticipating trades too much and jumping at them instead of chilling out and waiting for them to develop. Same thing with the GGP yesterday. Had I just waited for the break of $34, I wouldn't have lost $500 in the stock.

My goal next week is to just be patient. I mean, I worry that the trade will go through my level and I'll get a bad price so I jump early. Clearly though, a bad fill here and there would hurt me less than consistent jumping.

Overall, I'm feeling hopeful. I've never thought much about my attitude and how it could effect my trading, unlike my friend Attitude Trader. However, after my "hiatus," I had time to gain some perspective and I now feel this is very important. It's kind of a new thing for me, because I really like to indulge in negatives. However, negative isn't helping me right now.

I had a good work ethic this week. I'm working on having a more positive attitude and next week I'm going to work on being more patient.

Okay, enough of that.

My best stock today was AGU.



I bought a couple hundred right before it had that nice run around 10:30. After the morning run, it consolidated, selling off on lighter volume. So when I saw it slowly gain on higher volume, I got in.

My worst, was LNN.



I caught some of the run from $69 to $70 around 10:40. The problem is that instead of selling, I held. The stock seemed to be breaking a downtrend on the daily and I thought it would run more. When it sold off of $70, I bought more and was stopped out. So I turned a winning trade into a loser. Annoying.

Worse yet, I bought back when it dipped below $69, caught a move back above $69 but again, held and added instead of selling. I was bullish. It was tough to be bullish today in any stock, and I got burned when it spiked down from $69 to $68.

Anyway, next week I hope to have my software mastered. The research schedule really worked well for me this week. I felt more involved in the market.

My ethic is good and under my control, the profits will come.

Here's the stats:

P&L, -$633
Best, AGU, $359
Worst, LNN, -$268

25,800 shares traded.
26 stocks traded, 11 winners, 15 losers.

Virtual Office, $3371. Dow, -246.79, 12,606.30

Evolution, $3155 on 79,200 shares traded.
Sanglucci, $749 on 15,600 shares traded.
OBAT, $471 on 5800 shares traded.
Wincity, $65 on 200 shares traded.
Akalawoo, $28 on 1 contract traded.
Misstrade, no trades.
Retardo, no trades.
Denarii, -$12 on 200 shares traded.
Dehtrader, -$452 on 344 shares traded.
Me, -$633 on 25,800 shares traded.

Today was a real grinder.

We had solid volume as we traded close to 1.8 billion shares, but it was a battle. Every time the buyers tried to step in even a little, the sellers overwhelmed them and took the indexes just below the prior level. Then the buyers would have another go and the sellers would win again. Besides the open, there weren't any real dramatic moves one way or the other intraday, just a slow and steady trend down.

As I mentioned in yesterday's post, Evolution has made a nice comeback from his New Year's hangover. It's great to see him pull up with a big one to end the week. Sanglucci and OBAT also had nice performances.

The rest of us kind of sucked. Especially me. I got pulled into most rallies today, and lost.

Anyway, have a great weekend.

Potential Inverse Head And Shoulders Patterns Developing?

You might have noticed that I watch Brian's videos as part of my daily research routine. Today's video is a perfect example of why. As a daytrader, I have a very short -term view of trade... too short to have a clear view of a larger picture.

Normally, I vacillate wildly between unbelievably bearish or unbelievably bullish. That's okay, but I think it's much better to have more perspective.

This video tempered my bearishness somewhat.

Bank Of America Buys Countrywide Financial

I guess this is good news. It's an all-stock deal worth $4 billion.

However, BAC was also "smart enough" to buy up at $18 back in August.



From a trading perspective, it looks like a hail-mary type, betting the house, type of trade.

Adding to a loser... a cardinal sin.

UPDATE: Full story from the NYTimes here.

Good Morning

Time: 6:33
Mood: Solid