Good Morning
Time: 6:35
Mood: Eli Manning Isn't A "Hero"
Monday, February 4, 2008
Sunday, February 3, 2008
Coal: Black Crack.
Perhaps my title is overstating things... anyway, lately people can't get enough of the stuff.
For those few, lonely souls who aren't watching the goddamn Super Bowl, check out Woody's post on the coal sector. Good stuff.
The Super Bowl Is Gay
That's right.
BONUS SUPERBOWL OBSERVATION: Joe Buck's head is enormously large. Way out of proportion to the rest of his body.
A Beautiful Morning
I woke up this morning to go surfing. The conditions were perfect for me and my longboard. A nice, clean and glassy, 4 foot swell. Really mellow. Although the water temperature is now sub 40 degrees, it didn't feel cold at all because there was absolutely no wind and the air temperature was pleasant.
It felt like spring.
The coolest thing was when a harbor seal poked his head up out of the water about 20 feet from where I was sitting on my board.
So a couple of times after I caught rides I had to paddle all the way back out from the inside. It was somewhat challenging, because I'm still not in great shape. My lungs are still feeling the effects of a month-long bout of bronchitis. When I was in that position, I thought of a quote I read when I was browsing around late Friday night.
"Fall seven times. Stand up eight."
-Japanese proverb
Its worth in terms of getting through trading and trading slumps, is obvious.
Saturday, February 2, 2008
The Library Rules
So after work, Judy left immediately to go to a dance performance with a friend and I took our daughter out to dinner with some friends. We got home, played, and then I put her to bed.
This was at 8pm. I fell asleep until 10:30. (And thus, you get a 1am "special.")
I woke up, and started writing my daily blog post. Afterwards, I surfed my blogroll and stopped over at Wall Street Warrior. From there, I found Trader-X (his annotated charts are newly blogrolled).
Shortly after, I was on the verge of buying $125 Fibonacci stuff and self-help books.
Luckily, (remember, I'm still struggling here) I moved on and quelled my desire to purchase by visiting my public library's site and picking up some good books.
This is what taxes are for people...
I ordered Steve Nison's "Japanese Candlestick Charting Techniques" from the inter-loan library system of my public library.
Anyway, I expect by this time next year I'll be a freaking millionaire. The market should just send me a check to make it easier for everyone involved.
However, I also ordered "The Great Crash of 1929" by John Kenneth Galbraith. Just to keep myself steady.
Hope your weekend started right.
NOTE: My weekend has started in grand fashion as I woke up this morning to a fresh attack from another stock blogger. Seriously though, I relish an attack from Ragin Cajun. It gives me another chance to embarrass him...
Friday, February 1, 2008
Flaming Lips, "Slow Nerve Action"
Here's an example of why Youtube is great. I love this song, yet there's no official video. This guy made a really nice video for it, where before none existed. Kudos, moody walking dude.
Daytrading As A Spiritual Practice
The other day, in one of the comment sections here, I told someone that daytrading is analogous to a spiritual practice.
Sounds funny, I know, but it's true.
I mean, I write down these rules, all of the age-old daytrading adages, like, (add booming voice of God coming down from mountain), "let your profits run young man, but cut your losers" yet I still make the same mistakes.
I have the wisdom, it's just hard to implement it in the reality of the market moving. It's so easy to look back at static graphs and no where you went wrong. But when the futures are moving one way, ticks are moving another and news is constantly hitting, it's hard to keep your presence and perspective.
It's like "love thy neighbor." I mean, okay, I get it, but when I get cut off by some shithead driving a Hummer and talking on a cell phone, it's a good thing I don't carry a gun.
I freak out. I lose my presence and perspective. 10 minutes later I can look back and know that throwing my water bottle against my windshield only hurt myself and not the Hummer shitcake, but that doesn't help me in the heat of the moment.
So here are two trades that I wish I could make again.
First off, LFG. It was as perfect an afternoon play as any.
I bought 200 shares at $49.85 at 2:41 in anticipation of a move up to the figure. So far, so good. The most the trade moved against me was 22 cents. Now here's where I begin to fuck up. At 2:50, I sell 100 shares at $49.90 locking in the 5 cents of profit... YES! And then, at 3:16 I sell my last 100 shares "all the way up" at $50.13. Total profit, $32.
Meanwhile, look at the move! I should have made a straight point on my shares without question! There was never a reason for me to sell. The market wasn't coming in. Furthermore, I should have added to my position when the market broke $50 and then came back on light volume. In other words, I made $32 on a trade that I should have made hundreds of dollars on. It was an easy trade. My execution is all wrong.
Here's another, MTW. While this trade wasn't as perfect, still, it should have brought me more money than I let it bring.
Again, I bought 200 shares in anticipation of a breakout at 2:20. The stock had been in a long tight base and the market was moving higher. Volume started increasing to the upside. And here's where I screwed it up. I sold 100 shares at $38.65 and the other 100 at $38.72. Why? I don't know. Again, here's a trade that didn't even run a dime against me yet the moment it ran a little in my favor I locked in the profit, $37.
In this trade, I'm not as upset that I didn't buy more because the position never really tested the base. It just ran. Here, I'm upset that I didn't have the patience or the confidence to let a winner run.
Here's a final analogy for you Seinfeld fans. Remember the episode where Jerry makes a plane reservation but then his seat is sold anyway? He gets into an argument with the ticket representative and repeats over and over to her, "You see? You can take the reservation, but you can't hold the reservation..."
It's like that.
Anyway, I can't get into the system to give all the stats. Enjoy your weekend. I'll post here once or twice this weekend, so check back.
P&L, $155
27,600 shares traded.
NOTE: Again, I apologize if there are egregious spelling errors in this post. Spellcheck isn't working. WTF, blogger?
Virtual Office, $2396. SPX +17.40, 1397.00.
OBAT, $830 on 7600 shares traded.
Evolution, $808 on 64,800 shares traded.
Retardo, $796 on 2 contracts traded.
Me, $155 on 27,600 shares traded.
Dehtrader, $51 on 2328 shares traded.
Wincity, $35 on 200 shares traded.
Denarii, -$44 on 3100 shares traded.
Sanglucci, -$235 on 39,600 shares traded.
And we have a new leader!
OBAT has been on a real roll lately. It was a real dogfight at the top of the VO today too. Good job, guys.
I felt that it was a slow day today, but that didn't stop people in my office from making thousands of dollars. We traded 1.8 billion shares today on the NYSE and the VIX fell 2 points to close just over 24.
I'll post a little this weekend, so be sure to stop by.
UPDATE: It's 10:53. Judy went to a dance performance tonight and I was babysitter in chief. I fell asleep with my daughter when I put her to sleep! So now I'm wide awake. Daily post forthcoming...
Luna, "Time To Quit"
Art Cashin's Comments, February 1st, 2008
On the Microsoft Yahoo deal
I think the MSFT deal is a defensive move, only a counter attack against GOOG.
On the futures giveback after th jobs data
By the end of the day, Goldilocks will throw down a few Prozacs and have a few cosmopolitans as well.
Has anything altered your short-term view?
No. The underlying technicals are still short-term weak. Though this oversold rally has lasted far longer than I thought it would. I also failed to anticipate that the MBIA conference call, with only written questions, could only provide positive headlines.
Thursday, January 31, 2008
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
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.
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