A Clear Swipe At Wolf Blitzer

Wolf Blitzer, you're a dick.

Why? Because you're more interested in getting the candidates to fight with each other and "make news" instead of letting them discuss the issues in a smart and civil manner.

Democratic Debate, January 31st 2008

Discuss...



Vote online at Politico for questions you'd like asked during the debate.

Belly, "Gepetto"

NOTE: Don't forget to watch the Democratic Debate tonight at 8pm on CNN. Only Hillary and Barack... should be great! I'll put up an "Open Thread" if anyone wants to comment on it.

OH, ALSO: I know I said I'd have an "around the house" thread up, but I got smoked today and was just busy, so it may have to wait until early next week...

So Where Did I Go Wrong?

Okay, on a day where the Dow rallied 400 points off the low and where we traded a huge amount of shares, I should have made money.

Especially considering that my first two trades of the day were winners.

I short MA pre-open and covered with a 4.5 point gain. Then, I short X on a spike up and made about 80 cents. So I was up over $600 in 5 minutes.

Of course, it's easy to look back and say that I should have just stopped and gone surfing, but I thought I might be in for a big day and with a $600 cushion, I felt good about my prospects.

So here's what went wrong.

First mistake, buying in anticipation of a trend break instead of waiting patiently for the break to occur. And yes... I make this mistake a lot.



Simply put, I need to be more patient. Had I waitied for the break and test I would have not lost $600 with my first 2 failed trades and I would have had more confidence to hold size for the move when it did come. Instead, I did buy again but with big losses in the stock already I was defensive and had only a couple hundred shares for the majority of the move. I trimmed my losses in the stock, but those losses shouldn't have even happened.

I think what I'll do is at least force myself to not buy a full position ahead of a break. If I want to be aggressive and pick up a couple hundred shares and risk a failed trade with small size that's fine. However, both times I went in early on the stock I had 600-800 share positions. Not a good idea.

Another problem I ran into today was not lightening up winning positions. I think again, that I had this problem because I was looking for "a big day" and not dealing with what was right in front of me, mediocre positions. I got seriously clipped at around 11:45 when the futures ran up on good volume only to pull back drastically in the next 15 minutes. The position that hurt me most at this time was CNS.



I seriously top ticked the stock at around 11:50. I had 400 shares and bought 400 more at the high, right before the stock dropped 80 cents. It ripped my face off and brought me negative on the day.

Instead of getting caught up in the euphoria of the market rip, I should have been lightening my winning position because clearly, the futures were moving into an overbought situation... a pullback had to come. I just wasn't careful here... Another problem? This is a thin stock. 800 shares is too much for me there.

I also had a churning problem today in BBD, my 4th worst stock of the day. Nearly a third of my shares traded went into this "toad" (to borrow Wincity's term) today. In fact, my worst 7 stocks of the day accounted for over half my shares traded today. Considering I traded 33 stocks, that's very bottom heavy volume there... never good.

In general, my biggest problem today was position sizing. I was buying and then adding because I was swinging for the fences and I ended up striking out a lot. If anything, as I size up again I'll need to buy larger positions when I enter but not worry about pyramiding, until I get my confidence with slightly larger positions again.

Overall though, looking back on the month, I did great.

I started the month unemployed after leaving my employer of the last 6 years and shacked up with a new group. I completely remotivated myself, stuck to my new research schedule and starting taking the job seriously again. I learned a new software system in a very volatile market and only had 3 or 4 down days while making over $10,000 in less than a half month's work.

Not too shabby considering my circumstances.

Anyway, here's the stats:
P&L, -$654
Best, MA, $450
Worst, RWT, -$232

44,400 shares traded.
33 stocks traded, 11 winners, 22 losers.

QUESTION: Is anyone else having issues with Blogger spellcheck?

Virtual Office, $1472. Dow, +207.53, 12,650.36.

Evolution, $3384 on 43,600 shares traded.
OBAT, $302 on 9800 shares traded.
Retardo, no trades.
Wincity, no trades.
Denarii, -$125 on 2200 shares traded.
Me, -$654 on 44,400 shares traded.
Dehtrader, -$1435 on 4250 shares traded.

What a crazy day.

We rallied over 400 points from the lows of the day to the high on excellent volume. We traded over 2.1 billion shares on the NYSE and the VIX dropped 1.37 to 26.25.

So why didn't I make money? ARGH!

Anyway, at least Evolution stepped up to save the office and do a sweet repair job on his rocky month to close out in style. Nice work, ET.

I think Denarii summed it up quite nicely when he said, "If I had just held my longs from the morning, I would have tripled my monthly profit." Exactly. Today was a buy and hold type day...

There were some clouds on the horizon at the end of the day though... GOOG missed earnings and just before the close, S&P cut their rating on FGIC and said MBIA and XL may soon get cut.

Looking forward to February. Let's hope it's as trader-friendly as January was...

NOTE: This is the last day I'll report the Dow number with the VO. From now on I'll report the S&P 500 since it's more representative of the overall market.

Also... who will be the new VOer? Details Monday...

Dramatic Lemur Is New Volatility Mascot

Bubs got Clarence on the macedemia nuts again... it's sad.



(h/t Shane)

Unfortunately, I haven't been able to use this volatility to my advantage... quite the opposite really. However, the office is making loot.

Morning Link-Love

First of all, a message from our sponsor:

The IBD says that even if this recent rally holds, there's nothing worth buying as most stocks have yet to form sound technical bases. The process could yet take months.

Now, onto the love.

• Tim Sykes Gives Up Daytrading, Opens Nursing Home
• Where Obama Lived In 1980s New York
• Another Gem From Wall Street Fighter. Simply Put, This Is Hilarious!
• For Only $2 Or $3 Billion Dollars, You Can Save A Needy Bond Insurer. Won't You Help?
• Sadly, Ego Makes Us Act In Crazy, Stupid Ways
• Everybody Can Just Calm Down Now. The FBI Will Get The Bad Subprimers!
• Attitude Trader Talks About Meditation And Its Benefits For Traders. A Must Read.
• Stewie's Blog Is Simple, Just Like The Best Trades.
  

Good Morning

Time: 6:38
Mood: Good

Akalawoo's Last Moments

You know, I asked him to do a presentation and he just couldn't get it done. Notice he's now in the cemetery (check the right toolbar), with the rest of the VO has-beens.

Good luck trading the Forex, Akalawoo. That is, if they let you out of jail.


guy freaks out in coffee shop - Watch more free videos

A new member is waiting in the wings... stay tuned.

Lemonheads, "My Drug Buddy"

Fuck this guy and his hair... but the song is good.



Another video in the college series.

Ben Bernanke Scares The Stock Market

Let's just forget about the whole first part of the day. I traded very lightly and was up about $200.

Then, the FED cut rates and the market freaked out.

I generally trade FED days very lightly. While I like to trade when the market is volatile, the FED days typically have this "the market is going to the moon/the market is going straight to hell" type of feel to them that I just can't trade.

Mostly because the market takes the round trip from the moon and back to hell in under 5 minutes.

The fills are often horrible.

So, even after the cut, I traded with small size. I'll detail my trades in one stock, SKF. Readers of "the Fly's" blog know that yesterday I bought some in my LT account at $100.04. I figured, if I lost in the trade I could harass "the Fly" about it forever, and if I made money in the trade, it was its own reward. A win-win situation if you will...

Anyway, these were daytrades though. Completely separate from my LT account. I'll hold that position until the end of the bear market... or 2010.



2:20 Buy 100 @ $97.24
2:26 Sell 100 @ $96.01 (the low of the move on a sell-stop @ $96.50... some fill!)
2:37 Short 200 @ $99.76
2:39 Buy 200 @ $98.77
3:08 Buy 200 @ $95.25
3:09 Sell 100 @ $95.47
3:13 Sell 100 @ $96.83

So as you can see, I left dollars and dollars on the table on both sides of most of these trades. Still, I managed to make $250 in the stock. But man, if only I wasn't so damned skittish.

The reason why I didn't catch the move from 3:20 on was simply because I was waiting for a pullback to enter. This is also why I missed a lot of short opportunities in other stocks. I looked at the SPY and thought we'd maybe form a Head and Shoulders formation before heading lower. Instead, the market traded lower violently and quickly, chopping off the dudes arm.

And like they say in Afghanistan, no arm, no shoulder. Okay, that was in poor taste... let's move on.



So I missed the move. It's too bad, but I didn't want to chase. I knew that it was very possible that the market could moonshot again and I wasn't looking to get squeezed.

After this move, I think it's safe to start trading again with some size. The volatility appears to be back. Since Thursday of last week I've been taking it easy. Hopefully now the volume will come back to the market and trading will be good.

I'm going to get a lot of sleep tonight (after watching the Republican debate) and be at the desk early.

Here's the stats:
P&L, $421
Best, SKF, $251
Worst, CBI, -$97

15,600 shares traded.
16 stocks traded. 10 winners, 6 losers.

NOTE: Expect an "around the house" post about me and a valet parking dictator named "Romeo" to drop today or tomorrow.

Virtual Office, $4200. Dow, -37.47, 12,442.83.

Sanglucci, $1425 on 47,200 shares traded.
Dehtrader, $1035 on 2100 shares traded.
Evolution, $679 on 55,400 shares traded.
OBAT, $550 on 4800 shares traded.
Me, $421 on 15,600 shares traded.
Denarii, $52 on 1000 shares traded.
Wincity, $38 on 200 shares traded.

Well it was a wild one.

Ben "the beard" Bernanke did not disappoint the markets, cutting 50bp in the FED funds rate and another 50 at the discount window. And the market completely ripped on the good news.

Until it sold off like a motherfucker.



Volume was dead all day but took off after 2:15. The close today was amazing... financial stocks got completely crushed.

The VO did well. Not one red trader today... always a nice way to end the day.

I, for one, am very happy the FED is now behind us. Time to start trading again!

The FED Cuts 50 Basis Points

Ben Bernanke, Chairman Of The Federal Reserve

Planet Freaking Earth

Things really slow down the hour ahead of the meeting. Might as well laugh.


Planet Freaking Earth - Watch more free videos

NOTE: I can't stop watching this...

"The Fly's" Platinum Party

Be the millionth visitor and get a can of soda.

John Edwards Dropping Out Of Campaign

Ex-Senator, John Edwards

Link.

I'm guessing this helps BO, as Edwards was an anti-establishment type of candidate.

UPDATE: Just gave his "drop out" speech. Surprisingly, he conceded that he "fucking hates poor people."

Art Cashin's Comments On CNBC. January 30, 2008.

This morning, Joe Kernan and a guest questioned Art on a few topics. Below you'll find the questions and his responses paraphrased.

On the FED action today:

The rate of destruction in the GDP was stunning and it bakes a half point into the cake.

On the bond market:

They're overdoing it and they may be setting up for a turn, they're overbought.

Do we test the lows?

I think we have to retest the lows. It takes a few weeks for that to happen, not a day or two. It's a pass/fail type of test.

Are we in a cyclical bear?

Well, Goldilocks is getting a manicure and a complete makeover, but I'm afraid she'll be left standing on the porch when the limo pulls away.

Has the elimination of the plus tick rule increased volatility?

Yes. In the past, shorts were able to weigh on a stock in the same manner that piling rocks on a guys chest will eventually cause him to stop breathing. Now, they sell 'em right down and then they spike right back up, so the elimination of that rule does add to increased volatility.

Stock Market (and Politics) Link-Love

• McCain Defeats Romney In Florida
• Hey Look! Our Mortgage Brokers Ruined Europe's Banks Too. UBS Writes Down $14B.
• FED Looking To Make People Spend More, Create Bubbles.
• Thank You NYT For Your Biased Article... Sigh.
• Not A Myth: Hot Tap Water Is Bad For You.
• I Found This Yesterday Over At Wall Street Fighter. 40 Great Business Quotes.
• Go Feed The Bull! It's Like Digg For The Stock Market, Only My Stories Actually Have A Chance To Get Published.

Finally, a video. Hillary is going to have to cheat if she wants the nomination and she has no problem with that. The Democratic candidates were not suppossed to actively campaign in Florida due to DNC rules that she ignored. Just another reason for me not to support her.

McCain Wins Florida; Guiliani Done.

Senator John McCain

Guiliani went from first nationally to a complete fuck-up. At least he didn't scream.

Good Morning

Time: 7:04
Mood: Mellow