The Uptick Rule Didn't Help The Market In 1987
Just for fun... a news report about Black Monday. Damn "yuppies."
Saturday, August 11, 2007
Friday, August 10, 2007
For The "Maria" Voters
Listen... I've been watching CNBC daily for 8+ years. Not once... NOT ONCE has Maria Bartiromo said a damned thing that helped me make any money.
I know that most of you don't listen to what she says. You're there, clacking away at your keyboard, starting at your computer monitors, looking for cool video clips on Youtube and trading stocks. CNBC is background noise. You really keep it on just in case something happens to blow up somewhere. Sometimes you glance at the TV and, oh yeah, she has nice eyes. Big deal.
Wouldn't it be nice if the news anchors were informed? I mean, we're going through a financial crisis and they haven't said one smart thing this week. Ratigan is good and Erin could be good (if they let her). Instead, all most have done is cheer the market on as it bleeds to death.
Anyway, watch how Maria gets owned by Anderson Cooper in this celebrity Jeopardy death match. Don't want to watch the whole thing? Fine... they GIVE HER fake money at the end so she can participate in Final Jeopardy.
Lou Reed, "A Walk On The Wild Side"
FLASH: Maria is surging in the poll. She's up to 14%. Perhaps she has her own plunge protection team.
Dinosaur Trader Provides Market With Liquidity
How I found time to trade 173,000 shares and blabber and make jokes all day on Wallstreak is confusing to even me. I think I type really fast.
Anyway, check out some of these graphs.
In the beginning, there was PCP.
See that third bar? That's where I bought. At $123.50 and $124 and $124.50. Now, in hindsight it looks great, but it had to be one of the scariest trades I've been involved in, ever. Why? Because I bought 500 shares to start, was filled at $123.50 and then the bid dropped to $115. Mentally, I wasn't really prepared to lose like $5,000 in two minutes. Why I immediately bought more is confounding. I guess I had lots of confidence that the stock would bounce at it's 50-day moving average.
It was extremely tempting to sell it all after it ran up to $127. But I was good and just gave the market dribs and drabs of my position all the way up until $132. It was my second best stock of the day, I net just under $4500 in the trade.
Here's another crazy one I got involved in only with far fewer shares.
I mean, what the fuck? Seriously!
I got long at around $106 with 400 shares. I sold half before $107. The other 200 I sold over $112. Then, to be piggish and greedy, I got short at $112.50 and covered around $109. It was wild.
But as the volatility can work in your favor, it can just as easily work against you. For example, I lost $1900 in TNH today playing it with 300 share positions.
And then there's TFX...
Stewie called this one out. These "Streetsmack" plays, or parabolic short scalp plays have been working like a charm recently. However, I got involved with TFX a little too early and perhaps too heavy at around $74.50. I had to cover around $76.25 for a big loss.
Then I got short again at around $77.50. Thing is that I got short less when it actually started to work. At one point I was down a few thousand in the stock and managed to trim my loss to -$1403. I'm short 400 into the weekend. The only thing that would drive this stock up 15 points in this environment is a fund having to unwind a short position... that's just a guess of course. I'd love to get anyone else's opinion.
Anyway, I just hope I don't become further fuel for that squeeze on Monday. We'll see.
Meanwhile, there was loads to watch all day. The fertilizer stocks (besides, ahem... TNH) were strong. Lots of money seemed to be moving there. The financials also bounced. In fact, my best stock of the day was AMG.
I was in and out of him aggressively all day long, trading over 22,000 shares of it alone. All of my profits came on the long side, most in the bounce between 11:00 and 12.
We'll see where this market takes us. Based on some of the wacky moves I witnessed today I feel like there are some funds being forced to cover positions. I expect more bad news to come out on the financial sector. I mean, all the banks and brokerages seem to be hiding the truth from themselves, their investors and the media. That doesn't sound good.
And I don't put much thought to the market when I'm not trading it, so I don't have any clue about what the Fed move means today, throwing dollars at the market like that. It smacks of desperation, that's all I can read. I mean, 3 moves in one day like that is "unprecedented?" That can't be good, right? They threw more liquidity on the market today than they have since right after 9/11. Odd, if everything is just fine, no?
(Note to Wallstreakers: I couldn't get on after 3pm or so...)
Anyway, here's the stats:
P&L, $10,528
Best, AMG, $6492
Worst, TNH, -$1892
shares traded, 173,000
44 stocks traded, 25 winners, 19 losers
708 trades
Virtual Office, $11,131. Dow, -31.14, 13,239.54.
Me, $10,528 on 173,000 shares traded.
OBAT, $446 on 6000 shares traded.
Bubs, $157 on 900 shares traded.
Misstrade, $0 on 2000 shares traded.
Denarii, no trades.
HPT, no trades.
Evolution, vacation, no trades.
Wow. Well, I guess I provided the market with a lot of liquidity today...
Most of the Voers were on the sidelines today. For those who dipped their toes into the market, it was complete lunacy.
The story today isn't one of the indexes. Take a look at some of the individual stock moves today. They were insane. I mean, I hope someone can help explain these moves eventually. I'll show some graphs on my daily post, but I'm assuming some funds were just unwinding positions and that led to massive moves in some stocks.
Anyway, let's see what Monday brings. The FED dumped some dollars on the market today. These are strange days. Be careful with your long term positions. There's no reason to be a hero.
Complete Wackiness
I caught both stocks well. Meanwhile, there are two songs I can't stop listening to right now.
Dedicated to the market, "Slippi."
And, dedicated to the financial companies... "Not A Problem."
Wallstreak Posts Embedded
Because today will be a little nuts, I'm embedding my Wallstreak posts over on the right sidebar. They are delayed, so don't buy or sell anything based on them, but I thought it could be interesting to follow along.
It'll be there for at least today. If you find it interesting, I'll leave it up. Lemme know.
UPDATE: I took it down because it was slowing down the site.
Blood On The (Wall) Streets
Europe down 4%, everyone on CNBC now thinks we're headed for hell in a handbasket. Peter Shiff finally gaining some respect... it may be time for a bounce at some point today. Not "the final, coast is clear" bounce, but expect a couple of tradable rallies here or there.
I kind of remember Mark Haines saying it wasn't so bad yesterday.... hmmm.
Oh, look who showed up to play in the market today!
Be careful today. If you can't follow stop-loss rules if you lose a lot, then automate it or don't trade today.
Good luck. It will be busy so this may be my last post until things chill out.
UPDATE: Wasn't it just a couple of days ago that CFC said they had 187 billion in liquidity? Now they're freaked out? Oh wait... someone says the market is "overreacting" to their 10-Q... move along, everything is fine! CFC to $100! God Bless America!
And by the way, who can ever trust Goldman again after that bullshit from Wednesday afternoon. Rumor that their Quant fund is going under and the market drops 200 points from its high. They come out and are like, "Shucks, what's everyone freaked out about? The Quant fund is fine!" So the market rallies back up.... However, yesterday, they said another one of their $700 million funds is going belly-up... talk about a lie of omission!
Thursday, August 9, 2007
FXY And The Yen Carry Trade
Watching Fast Money tonight... I mean, you have to right? and they started discussing ways to hedge against the down market.
Most everyone knows about the QID and the SDS, the inverse ETFs.
However, they also mentioned the FXY, a stock that "the Fly" mentioned today on his site. This is an interesting play, because, as they explained on Fast Money, if you believe that the contagion in subprime will lead to an unwinding of the Yen carry trade, the Yen will have to go up.
They also mentioned that a rate cut is now priced in BEFORE the Fed meets in September. That doesn't mean it will necessarily happen, but as Mackey stated, a surprise rate cut "will kill the USD." And if the USD goes down against the Yen, again, FXY benefits.
Meanwhile, I bash CNBC all the time. But Fast Money is a good show.
UPDATE: Commentor "Gappingandyapping" over at Fly's place hooked me up with this link by our friend Woodshedder. It explains the Yen carry trade very nicely. The charts are from February or March though...
Jim Cramer Calm, Stock Market Freaks...
I left the house at 4:40 to head out to the beach for some early morning surf. I didn't bother to look at CNBC to see where the futures were. Then, while surfing, I got creamed by this huge wave and I saw this hot girl on the beach laughing... I didn't give a shit, I'm married and hardly notice women anymore, but it was a sign.
When I got home, I turned on my screens and did a double take when I saw that the futures were down huge. I was long AMG and LAZ overnight. I figured with the GS rumor out of the way at the end of the day yesterday that we'd have a bullish open. And I wanted to fuck with "the Fly" by taking the opposite side of his LAZ short. Anyway, WRONG!
You could say, and you wouldn't be overstating anything, that today was not the best day to be long brokers overnight... It's never a good sign when you're calling your risk manager at 9:35 and asking them to ease your risk limit for the day, since you've already maxed it out. But this is what the first 4 hours of my day was like.
The good news is that I hit my low of the day, P&L-wise, at 9:40. The rest of the day things worked out for me.
Problem was that I churned a lot. I tend to get a little overexcited on days like today. I didn't have my P&L up, but I'm sure I had huge disgusting swings in my P&L. I'm 100% positive that I did not close at my highs. I know this because I bought 800 shares of AMG at 3:30 and lost a quick point on it. That's when I decided to call it a day. That's the way the market was today, easy come, easy go. And since I traded 125,000+ shares today, I did a lot of coming and going.
Anyway, my head is kind of spinning still. Excuse this post if it's unintelligible. However, read on.
One important thing I realize. This volatility has allowed me to pick up some of my bad habits again. So far, I've been bailed out by the volatility, but it will not last forever. I need to get my shit back together. Take Monday, Wednesday and today of this week. Traders who are on their game, as user Streetsmack over at Wallstreak is, are making huge amounts of money. That is exactly as it should be in this market. I've been saying it over and over for the last 3 weeks... the stock market is a big money machine right now if you have your trade on... huge opportunity.
Man, I'm tired.
Another thing I've been repeating over and over since the beginning of this meltdown is that it's not just going to end in a snap! February was freaky in that the market got hit so hard and bounced so strong and so fast. Methinks this time is different.
"Banks don't trust each other." That's one thing they said on CNBC today that stood out at me as being extremely scary. That means they're probably lying to each other. If they're lying to each other, then they're lying to their investors as well.
Another thing that stood out at me on CNBC today was when Maria said, "Dow industrials are down 295, (and then practically yelling as if a huge rally has begun) they were just down 300!" As if that 5 points were gigantic or something... apparently she was thrown off by the first digit of the number... Maria is a cheerleading idiot. Perhaps that's why she only has 4% of the vote on my poll... Okay, fess up... who voted for her?
So, the bad news is that I'm long the financials overnight again.
Kidding.
Here's the stats:
P&L, $1608
Best, RWT, $906
Worst, AMG, -$1278
shares traded, 126,600
43 stocks traded, 23 winners, 20 losers
trades, too many...
UPDATE: I'm happy to say that if you search Google for "2007 Bull Trap", my blog comes up 5th.
Virtual Office, $6789. Dow, -380.84, 13276.45.
Misstrade, $3120 on 2000 shares traded.
Me, $1608 on 126,600 shares traded.
HPT, $1500 on 51 contracts traded.
OBAT, $456 on 9600 shares traded.
Denarii, $105 on 1000 shares traded.
Evolution, vacation, happy birthday
Bubs, no trades.
The one thing I didn't say today was, "Man, it's too bad Bob Pisani is off this week. Only he could clear the smoke and tell me, the homegamer, what is up with this market.
Anyway, the market got smoked. I have to step away now. I'll have a daily post up in a bit with more color.
Me And The Market, Right At The Open
Luckily, some poor fool took 200 shares of my LAZ long at $40.50. So I only lost 30 cents there. Still have 100. And 300 AMG...
(h/t bloggerdotcom)
Wednesday, August 8, 2007
Children & Pesticides
I'm a bird guy, I love birds and so I hate pesticides because they directly or indirectly kill many birds.
But I'm also a Dad and I really love my daughter. I can't believe how many people in my neighborhood still spray their lawns weekly to kill off such minor nuisances as canker worms or gypsy moth caterpillars. As a Dad, it really pisses me off because me and my family have no choice but to breathe the stuff in.
The laws simply aren't strong enough to protect neighbors from pesticide use.
It amazes me because while they are saving their trees, they are directly causing harm to their families. "But the worms may kill the trees." Whatever! The pesticides are slowly poisoning your family!
Certain types of pesticides are now being directly tied to the amazing increase in autism (1 in every 160 children being born have autism now... that's crazy!) and in Parkinson's disease.
Read more about it here. Think before you spray.
Floater
Bartender: "You want a floater with that?"
Me: "Absolutely!"
That's just a snippet of a conversation I was having at around 2:30 this afternoon when the market decided it wanted to freak out without me. I was on my way back from buying a new rash guard (wetsuit season is now over with ocean temps above 70 degrees) and my friend wanted to stop and get a drink.
So I sat in the sun, drinking this nice frozen drink, checking out the fancy cars, laughing with other people who are here on vacation, completely oblivious to the fact that the market was about to offer loads of opportunity. I'm not even going to post a graph of specific stocks. They all moved massively. Here's a look at the S&P 500 futures.
That move is simply tremendous. There is no other way to explain it. Days like today, I wish I was still trading in an office.
Anyway, so I can't really get into what happened to the market after 11:30 this morning when I decided things were "dead" and that it was time to take a break.
I will say that by 10:07 I was up a couple thousand dollars and feeling pretty good. I caught a nice longs in TNH, CT, RWT, ITU and CNS. I was specifically happy about my trade in TNH. Why? Because I've been watching the stock quiet down these last few days and I expected a real pop soon. That's exactly what happened in the morning.
I bought below $89 and got out at $92. I only had 100 shares. "Wincity," I hope you had more.
However, here's the trade that made me decide to exit for awhile. As I said, I made money on the long side of CNS in the morning.
But what happened at around 10:30 is that I got sucked into the stock again near the top as I expected both an intraday breakout and a breakout of a longer term downtrend that has been in place since June. I bought a nice position for this rather thin stock, 1000 shares, and watched it melt downward. And, I got stuck like a moth to a light bulb. I lost about 75 cents on the trade, or close to $750 dollars. So a stock that was a morning winner became my worst loser of the day, at -$339 dollars. I got stuck because I "believed" in the position too much. I liked the story... it was breaking out TWICE! YAY! and I got screwed.
Conviction is not always the friend of the trader.
Anyway, so that's that. I missed the fireworks today but I still managed to make some money. I'm very frustrated that between Monday and today I've only managed to make a relatively little amount of money however, at least it's money. I'm still working up my confidence. I hope this volatility lasts until I can really take advantage of it.
Time to try out the new rashguard.
Here's the stats:
P&L, $1356
Best, LAZ, $848
Worst, CNS, -$339
shares traded, 32,000
21 stocks traded, 13 winners, 8 losers
163 trades
Virtual Office, $10,528. Dow, +152.17, 13656.47.
Misstrade, $6780 on 5000 shares traded.
Me, $1356 on 32,000 shares traded.
HPT, $1300 on 104 contracts.
OBAT, $815 on 3600 shares traded.
Bubs, $277 on 1800 shares traded.
Denarii, no stock trades.
Evolution, on vacation.
Needless to say, if you left in the middle of the day to go buy some new surf gear and get a drink with a friend, as a certain somebody I know did, you made a really, really stupid decision.
This market is gangbusters for traders.
Like I said in my daily post yesterday, lose the story. Yes it's August, yes it's summer, but the time to trade is NOW. People will repeat this crap like broken records, that it's the summer and thus "slow" and trade is "thin" but the fact is that stocks are simply all over the map right now.
The amount of opportunity out there is simply staggering.
Keep trading. This is a stock traders market. See you tomorrow.
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