Virtual Office, $2570. Dow, +108.44, 12,378.61.

Evolution, $1005 on 60,500 shares traded.
Me, $652 on 24,200 shares traded.
OBAT, $523 on 15,400 shares traded.
Dehtrader, $402 on 6900 shares traded.
Akalawoo, no trades.
Retardo, no trades.
Misstrade, no trades.
Denarii, -$12 on 2200 shares traded.

It was definitely slower today. However, I want to send a special message to Melissa Lee.

She's sitting in for Maria, so I assume she feels the need to be annoying. I won't even start on her voice...

Anyway, between 3 and 4 she said on 3 separate occasions that "volume was really, really light." No.... we traded over 2 billion shares today... that is not anywhere close to light. Where was she for the last 4 months when we were trading 1.3 and 1.4 billion shares a day regularly?

Seriously... CNBC needs to find informed anchors. It shouldn't matter if they're fat and ugly. They just need to know about the market. Otherwise, the channel is useless. Let FOX have the sexy stupid anchors... CNBC has the opportunity to corner the market on "smart" financial TV.

Okay, enough of that.

So we traded almost 2.2 billion shares on the NYSE but the VIX headed downwards. It felt really choppy out there despite the volume. After the first hour of trading the futures were ruthless mostly chopping around in a 10 point range.

Check the links below. I find this new "rogue trader" theory very interesting. Should it be true, then as "the Fly" pointed out there is absolutely no reason to cut rates again next Wednesday. A non-cut could make the market interesting again...

Greenspan Disputes US Recession Signs

The Rogue Trader Theory (h/t Ducati)

HPT's Blog Blows Up

I know it's not funny that he lost $31 grand, but it's pretty damn funny to look at his stats freak out...



He went from 200 visits on Sunday, to 15,000 on Monday, to 37,000 on Tuesday!!!

Sex With Robots? NEVER!!!

It's a little slower today as expected... so here's some midday humor.

Morning Link Love

First of all, something to think about from today's IBD:

The nine biggest up days in Wall Street history all occurred during the bear market of 2000-02.

Moving on...

• Hopefully, this guy will find his way over to my old company, and blow them up too.
• The ECB is still talking tough. No interest rate coming.
• A new presidential poll is out and it shows Obama gaining. My wife's grandmother is supporting Obama. She's an 85 year old conservative Italian who has never voted Democratic in her entire life. I'm just saying... he's a true "uniter."
• If the Bond Insurers go you may want to build that bomb shelter and start hording food.
• Sometimes the truth isn't so exciting. Brian at Alphatrends speaks some truth.
• Do individual daytraders make money? Dr. Brett digs deeper.
  

Good Morning

Time: 6:47
Mood: Good

Note: Be sure to check the up volume report today in Big Charts. That will tell you where the money moved yesterday.

The Who, "Squeeze Box"

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

Virtual Office, $11,247. Dow, +298.98, 12,270.17.

Me, $6442 on 45,600 shares traded.
Sanglucci, $2900 on 39,000 shares traded.
Evolution, $1028 on 12,200 shares traded.
OBAT, $681 on 12,800 shares traded.
Dehtrader, $248 on 7180 shares traded.

Wincity, $18 on 200 shares traded.
Retardo, no trades.
Akalawoo, no trades.
Denarii, -$70 on 1600 shares traded.

DAMN!

The market rallied 600 points from the bottom on unbelievable volume to close up 300 points on the day. This was the catalyst. The bond insurers getting a bailout.

A trader's paradise.

As "obvious" as the rally seemed at 3pm when the robots couldn't hide their volume with diced up 100 share orders, it was nonetheless somewhat hard to hold. Stocks were taking fairly wild swings, shaking traders out left and right. Of course, if you bought early enough, you had an easier time holding... if you missed the early part of that rally it was probably somewhat frustrating.



A short term bottom is in. Unless we get hit with disastrous news, we should be somewhat safe here... if the FED cuts by 50bp next week, we could be off to the races for awhile... if they don't we could revisit the lows. We'll see.

This bonanza may tail off a bit now. Still, with earnings season upon us there should be plenty of opportunities. It's all about January 30th and "Ben the Beard."

Bush Inspires Confidence In The Economy

Art Cashin Reacts To Rate Cut

Letterman Thinks "Dr." Brady Barr Is An Idiot Too

(h/t Kawika)

Good Morning

Time: 6:42
Mood: Good

HPT Lessons Learned

By now, most have you have seen HPT's dramatic blow up video that I posted here the other day. Unfortunately, youtube removed it because he dropped the f-bomb about 3000 times in 10 minutes. Incidentally, I think it's silly that youtube allows kids to post videos of them beating each other up but will remove a video for using the word "Fuck."

That's seriously stupid.

Anyway, check the video below for what HPT learned from his blowup.

Also, kudos to him for using his now wideranging Internet exposure to tout a few charities. Not like I'll donate or anything... but still, it's nice.



And finally, check Tim Knight's parody video of HPT. FUDGE!

White Stripes, "Black Math"

Stock Market Volatility

You all know the story by now... the Dow gapped down 464 points at the open and then rallied madly back for the next hour and a half.

It nearly went positive for chrissakes!

Then it based for the rest of the day and churned unsuspecting traders into a head spinning oblivion. Unfortunately I was one of those traders. I gave back half of my profits from 11 to 4.

I'm still trading small size and still getting used to my system. I've been using more limit orders lately, but this morning I should have used market orders. I missed a lot of good trades because stocks just went straight up that first half hour and my limit orders were never hit.

I've been trading 9 years and I'm still learning... go figure.

Anyway, I'm shot. Immediately after the close we went out with a group of friends who all have 3 year olds... If the market doesn't finish me off, surely the 3 year olds will.

Here's the stats:

P&L, $1707
Best, BBD, $451
Worst, AG, -$208

51,200 shares traded.
32 stocks traded. 19 winners, 13 losers.

Virtual Office, $4176. Dow, -128.11, 11,971.19.

Me, $1707 on 51,200 shares traded.
Dehtrader, $1214 on 4540 shares traded.
Sanglucci, $1010 on 27,800 shares traded.
OBAT, $143 on 3200 shares traded.
Denarii, $102 on 700 shares traded.
Misstrade, no trades.
Wincity, no trades.
Retardo, no trades.
Akalawoo, no trades.

Well it was one for the ages.

I feel like a mook now... a rookie trader in an office full of animals. I was basically low man today (in my real office) while multiple traders made tens of thousands of dollars. 2 traders made over $50,000. Most everyone made the lions share of their money by 10:30.

It's frustrating. However, it also gives me hope that there is going to be lots of money to be made for a long time. The traders are in control of the market.

We traded huge volume on the NYSE today, over 2.5 billion shares. Also, the VIX skyrocketed over 37 today before settling down at around 30.80, still up over 3.5 on the day. Could that have signaled a bottom? Maybe... however, I'd be surprised if we don't test the lows. While it felt like the market rallied today, we still closed down substantially.

It only felt like a rally because we opened down 500 or so...

You can't overstate the importance of the FED meeting on the 30th. Will "Ben the Beard" do it again?

It's at least interesting and fun to be a trader again, that's for sure.

Quick Note

"Life with diabetes is about 'going for it!'"

FED Cuts By 75 Basis Points

Futures still down 40.



Dollar tanking.

When Will The Rate Cut Come? & Black Monday Revisited

Meanwhile, here are some posts from back in October, back when everyone was celebrating the 20 year anniversary of Black Monday.

WSJ Online Remembers 1987.
Black Monday, Terrible Tuesday, Wussy Wednesday.

Finally, Alphatrends pulled the graphs from the FED cuts after 9/11 to show how they effected the market. When the FED threw the first surprise cut on the market, it didn't help. People still sold. The second cut put in the bottom.

Check it out.

Good Morning

Time: 6:47
Mood: Nervous