Freedom to cut down world's oldest trees
Freedom to make Indians get down on their knees
And pray to your God and obey your FBI
And freedom to protest if you're not too scared to die.
Allen Ginsberg "Industrial Wave," White Shroud: Poems, 1980-1985
Today was a real chopfest. We gapped lower with lots of bearishness, but then ripped higher the entire first hour. After that, it was chop until a mild sell-off in the last hour.
Not fun trading action despite the impressive volume, over 1.8 billion traded.
I recall when the Bear Stears (remember them?) news dropped two Augusts ago that we were doing over 2 billion a day and sometimes close to 3 billion on the NYSE. If we start to see volume rise, it could be an indication that some kind of climax is approaching.
Or, perhaps volume is simply rising as stocks across the board get cheaper, making traders have to buy more shares to make the same profits. Who knows?
Anyway, we tested Dow 7,000 today. And no, it's not the bottom... so expect a nice 6,000 number sometime next week. My stomach churns for boomers locked into stupid retirement accounts.
The RO got clipped today. Out of 29 traders, 15 were gross positive or 52%. That's bad... worse, only 1 trader made over $1,000 gross and 9 lost over $1,000 gross. Were I not dead this year, I'd suffer from survival guilt with my #2 showing. As it stands, I don't feel guilty at all. I'll take the #2 and a solid close to my week.
The Manservants dominated. And "Trader D" pulled a rare "George Michael" today. (A "George Michael," for you n00bs, is when a trader's daytrading account and swing account are the worst two accounts of the day.)
"George Michael" - Trader D, -$10,783 on 281,000 shares traded.
Trader 10*, -$2,562 on 8,000 shares traded.
3. Trader J, -$1,981 on 30,000 shares traded.
4. Trader F, -$1,827 on 96,400 shares traded.
5. Trader N, -$1,501 on 97,800 shares traded.
"Lucky Pierre" - Trader B, $2,045 on 733k shares traded.
2. Trader S, $593 on 9,600 shares traded.
3. Trader O, $457 on 24,400 shares traded.
4. Trader R, $405 on 11,400 shares traded.
5. Trader T, $314 on 5,700 shares traded.
I hate dogs because people let them bark outside their houses for hours on end. Another good reason to hate dogs is because they all worship Satan. See below.
Slightly Possessed Demon Dog - Watch more Funny Videos
I'm so happy that "the Fly" finally released his PPT to (roughly) coincide with Obama taking office. Whenever he complains that the market is tanking because of something Obama did, I'll just blame the PPT. Gonna be a fun 8 years. DT Wins Again!!!
The Reformed Broker sits down with none other than JP Morgan to discuss the financial mess we're in.
Then he re-imagines "I Will Survive" by Gloria Gaynor sung by Vikram Pandit. Internet gold.
Just in case you've missed the last 10 or so years of the Internet, Time gives you the top 99 things you've missed. I was #100 apparently.
Overkill punishments dished out by the greek gods.
The diary of a sperm. Surprise ending!
File under crazy religious zealots... dude kidnaps a woman, saddles her into an adult diaper, and then reads the Bible to her FOR THREE DAYS!
Is This The Bottom?
Bobby Jindal, America's Slumdog Millionaire.
Trader X found a nice graphic of Golden Parachutes.
Einstein solved major problems with one second nano dreams. Zentrader tells you how you can do the same thing.
Topless coffee shops? Changing the meaning of "You want cream with that?" forever.
Worried about the moral hazard that all the bailouts create? Stop worrying!
Naked chick alert... 2/3 of the way into the video there is a topless woman whipping something. Porn Thursday indeed!
I traded early, made some easy money and decided to spend the rest of the day raking and picking up leaves.
You may ask, why the fuck would he do that? The answer, my friend, is that right now I'm all about small consistent victories that will rebuild my confidence. I traded only 6200 shares today and made about $600. A great confidence builder. If I manage 3 positive days in a row, I'll build my share size on each position. That's my plan for now.
As for the RO, they had a pretty solid day. These past few days have really helped bring a few guys back to positive or nearly positive on their year to date levels. Volume slackened a little today, but the bulls suffered another reversal. Those recent lows are very close...
Out of 29 traders today, 20 were gross positive or 69%. 8 traders made over $1,000 gross and 3 lost over $1,000 gross. I was #10 of 29, happy. The Bosses took the day.
"Lucky Pierre" - Trader B, $10,147 on 432k shares traded.
2. Trader D, $8,842 on 310k shares traded.
3. Trader H*, $5,152 on 18,300 shares traded.
4. Trader C, $4,933 on 122k shares traded.
5. Trader &, $2,021 on 50,200 shares traded.
"Chambermaid" - Trader A, -$5,626 on 130k shares traded.
2. Trader L, -$1,599 on 40,000 shares traded.
3. Trader N, -$1,361 on 95,800 shares traded.
4. Trader V, -$770 on 51,464 shares traded.
5. Trader F, -$546 on 95,400 shares traded.
Click here for Brian's take.
I've had a hard time finding windows of time to write my longer posts this week. So while I have many in development, none are ready for "prime time."
I appreciate your patience. As an apology of sorts, I offer the following without comment or explanation.
null - Watch more free videos
I'm not going to throw a party or anything, but it appears volume has returned to the market. Two days in a row we've traded over 1.5 billion on the NYSE.
I was very hopeful at 3pm when the market was ripping and the financials were leading. When we decide to go higher again, the financials are going to have to lead. Also, the fact that USO climbed higher and was pinned to the highs was positive.
Unfortunately, we're in a nasty bear market and rallies get absolutely no respect.
I hate late day reversals and always have a hard time trading them.
It was a mixed day in the RO. Out of 30 traders today 19 were gross positive or 63%. 7 traders made over $1,000 gross and 4 lost over $1,000. I gambled on a couple of MOCs at the close and lost... DNA, man. I was #23 of 30.
The good news is that we had a full on "spray" by Trader A. As you know, that means he picks tonight's song. I will post it later. He led the Bosses to victory.
"Lucky Pierre" - Trader A, $26,632 on 297k shares traded.
2. Trader D, $11,496 on 307k shares traded.
3. Trader C, $7,422 on 147k shares traded.
4. Trader B, $6,861 on 524k shares traded.
5. Trader F, $5,850 on 198k shares traded.
"Chambermaid" - Trader Z, -$7,787 on 309k shares traded.
2. Trader R, -$6,903 on 22,000 shares traded.
3. Trader &, -$2,603 on 22,400 shares traded.
4. Trader J, -$1,356 on 13,800 shares traded.
5. Trader E, -$675 on 11,400 shares traded.
Stock Market Trend Analysis 2/25/09 from brian shannon on Vimeo.
This is a perfect example of a low probability setup. Traders always need to balance risk and reward. This here was all risk...
Brutal Roof Jump to Trampoline Faceplant - Watch more Funny Videos
(Yes, I'm skipping right over Gary Bielfeldt. However, while he seemed like a nice dude in the interview, his hands aren't squeaky clean according to this Forbes article. A fun read if you're familiar with the Market Wizards interview.)
Anyway, the Ed Seykota interview has been my favorite thus far in Market Wizards.
Why? Well, I appreciate anyone who can have a good sense of humor and be humble despite being richer than a cat in a fish store. Also, the man has the ability to break trading rules down into aphorisms that stick in your head. I've read a lot of books on Buddhism and I'm always amazed at how simple but dense some of the writing is. A lot is conveyed in a very efficient way.
Seykota on trading is as good as Thich Nhat Hanh on Buddhism.
Okay, sure, all the humor and humility in the world isn't going to make you money if you don't have some other things working for you. But I want to stress that developing a good sense of humor and a true sense of humility (not to be mistaken with false modesty) are very important if you hope to be a good trader.
Think of trading as a lifestyle, not just an occupation. It's longevity you are striving for, not simply riches. Having a sense of humor and humility will help keep you in this job through difficult times.
And longevity is important. According to Seykota, "Longevity is the key to success."
Again, I'm re-reading this book during a difficult stretch in my career, and so I tend to focus on those parts of the interviews that deal with setbacks. But Seykota didn't even want to talk about setbacks... the dude was just focused on the here and now and the positive future. I liked that because only by focusing on what's in front of me will I be able to move forward again.
Seykota is primarily a systems trader. He wrote some sort of trend following trading system that generates buy and sell signals, and he sticks to it. I couldn't help but wonder if this was why he was so damned cheerful and happy... he's got a goddamn robot making hundreds of millions of dollars for him. What's not to be happy about? Still despite this fact, he had many insights that can apply to us daytrading types.
I mentioned how he doesn't like to dwell on mistakes. He moves quickly past them and focuses on the next opportunity. Obviously, this is a great skill to try and develop. When you start dwelling on past errors, you tend to want to correct them as quickly as possible. This can lead to overtrading, or taking excessively large bets in an attempt to "make back" all the money you lost.
While occasionally this might work out for you, long term, it's not a good strategy. So, when you make a mistake, move on.
If Seykota finds himself in a trading slump, he simply limits activity. Meanwhile, if things are going well he gets more aggressive and takes larger bets. Again, this seems very simple but in practice, it is often tough to remember. That's why reading books on trading should be part of your everyday job description as a trader.
There are many truths to trading that are obvious but also easily forgotten. Books help you remember.
Seykota says that cutting losses is the most important element of trading. After 10 years I can't tell you how sick I am of hearing this trading axiom. However, it's constantly repeated because it's a very tough rule to master.
I mean, look, you're going to read these words over and over again: "cut losses short." I guarantee it. If there is one positive change you make today to your trading, promise yourself that you're going to read these words now, "cut losses short" and master them. Here and now. Done.
Easy enough, right? But in practice, when the screens are flashing and the news is spitting out of your computer speakers or worse, the television, connecting to the rules in your head is often difficult.
Always remember... trading is simple as you want it to be.
Take the small loss. Just take it. You can always get back in if the situation improves. As Seykota puts it, "Losing a position is aggravating, whereas losing your nerve is devastating."
Finally, Schwager asks what a losing trader can do to transform himself into a winning trader. Seykota responds, "A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That's the kind of thing winning traders do."
In other words, adapt or die.
You need to constantly change with this game since the market is constantly changing. Don't get attached to a certain style of trading because you are setting yourself up for much pain in the long run. Instead, understand that you have to constantly reinvent the way you approach the market all the while hanging onto the core principles of trading.
Seriously, this was a great interview to read. If you are just picking and choosing through the book, be sure to spend a half hour and read this one.
While it is already being derided by so called "first tier" bloggers, I will submit that it's much nicer to have a President who sets lofty goals during a time of crisis, instead of one who tells you to "go shop."
A reminder that polio still plagues much of the world. Why the fuck not?
Never has relief been so palpable...
If you've been following along, you know that 2009 has not been kind to the RO. There has been lots of blood, large drawdowns, and a couple of blowups. So it's nice to see nearly everyone do well together.
It's the kind of day that renews confidence.
I have no idea what to expect tomorrow. My guess is that this was mostly short covering ahead of the Obama speech, but we had solid volume today and the VIX cratered so perhaps it will last a bit.
It would be nice to look back at this point in June and see a nice double bottom.
The RO kicked ass, putting in probably the best day of 2009. Out of 30 traders today 23 were gross positive or 77%. 15 traders made over $1,000 gross and only 3 lost over $1,000 gross.
I was #15 of 30. Baby steps. I know the game. It's all about building back up and not trying to make it all back at once.
The Bosses dominated.
"Lucky Pierre" - Trader B, $29,509 on 746k shares traded.
2. Trader A, $19,464 on 572k shares traded.
3. Trader D, $14,785 on 527k shares traded.
4. Trader Z, $13,545 on 244k shares traded.
5. Trader C, $10,457 on 369k shares traded.
"Chambermaid" - Trader E, -$1,881 on 75,600 shares traded.
2. Trader M*, -$1,571 on 0 shares traded.
3. Trader 9*, -$1,204 on 600 shares traded.
4. Trader T, -$908 on 4,900 shares traded.
5. Trader G, -$493 on 45,000 shares traded.
Today's heatmap is the inverse of yesterday's...
Click here for Brian's take.
Since I got busy trading today, I didn't have time to finish the Ed Seykota post. It will be up tomorrow.
Meanwhile, my discussion of the Market Wizards interview with Ed Seykota is in development. I'll either have it published midday today or tomorrow.
Back when I was in grade school, I had this teacher who always used to complain that us kids were running around like "chickens without heads." As an adult, I recognize that this teacher was probably somewhat disturbed.
However, the image has stuck in my head and today I get to use it because I watched CNBC. Every person who was on CNBC today was running around like a chicken without a head, with the exception of Dylan, who is a bit cooler than most. No one knows what's going on... all anyone has are questions... it's a great mess.
People are a bit freaked out, and rightly so. Trader P pointed out to me that we're almost exactly 50% off the Dow highs of 14,198 set back in October of 2007. It's an amazing and swift giveback. However, unless you're among the lunatic fringe who, sadly, seem to frequent "the Fly's" site almost exclusively now, you can see it in a positive light.
Unless you truly think the world is coming to an end, most of the pain is probably behind us. And if you truly think the world is coming to an end, what the fuck are you doing reading this anyway? You have work to do! Go get that gun! Go buy those grains!
I traded very lightly. I'll continue to do so until I get a consistent trade going... a trade I see over and over again and that works. When this happens, my confidence will come back and I'll start trading heavier again.
I know I am not the only trader suffering from confidence loss right now. The RO got slammed. But, like the market, I plan on being around in 10 years. In 10 years, these couple of months of drawdowns will be a blip.
Anyway, the Manservants took it to the Bosses today. Out of 28 traders today, only 10 were gross postive or 36%. 5 traders made over $1,000 gross, but 8 traders lost over $1,000 gross. I was #11 of 28, or basically flat.
"Chambermaid" - Trader B, -$22,858 on 385k shares traded.
2. Trader D, -$16,881 on 252k shares traded.
3. Trader F, -$16,053 on 89,600 shares traded.
4. Trader H*, -$13,793 on 25,300 shares traded.
5. Trader C, -$7,421 on 117k shares traded.
"Lucky Pierre" - Trader Z, $6,185 on 80,100 shares traded.
2. Trader A, $4,394 on 116k shares traded.
3. Trader E, $2,624 on 22,400 shares traded.
4. Trader N, $1,617 on 24,400 shares traded.
5. Trader V, $1,461 on 31,200 shares traded.
Click here for Brian's take.
"Out of opposition, a new birth."
-Carl G. Jung (1875-1961). Psychology of the Transference
Meanwhile, check out this article to understand why a new birth may be our only option. The old patient is cold. (h/t Jawbreaker)
IMPORTANT: The so called "Trader Tax" would be the end of proprietary trading as we now know it. It would place at 0.25% transaction tax on "the sale and purchase of financial instruments" including stocks. It is in a bill, H.R 1068 which is currently being debated for passage. If you are a proprietary trader, you need to write your congressperson to voice your opposition today.
Here is the full text of the bill.
