Blitzen Trapper, "Furr"

I turned a bunch of people onto the Fleet Foxes on this blog... if you're one of them, check this song.

The RO Report, "Who Needs Volume?" Edition

The low volume environment, unfortunately, is continuing. But as a friend pointed out, that no longer seems to matter as far as volatility is concerned. We had about a 175 point range today in the Dow.

Another friend, Jawbreaker, just pointed out in the comment section of another post that he feels we're about to enter a very difficult phase for daytraders. This may be so. In fact, I see what he sees.

However, I've traded 10 years, I believe he's traded 12-15... difficult markets come and go. The thing is, there's always someone making more than you... which means, in essence, that you can always do better. The easiest thing you can do, is defeat yourself. Or, to paraphrase my hero (cough! cough!) Dennis Kneale, let's not talk ourselves into a recession over here!

Anyway, today marked a bit of a change for me, as I officially change my stance back to bearish. I've been bullish since that November low, but I hated the way the bulls just let SPY 89 go. Also, the price of crude is alarming.

Now, I think we can expect something like this to play out... not particularly pretty, but perhaps more realistic than thinking the worst was behind us forever.

In blog news, I'm working hard to have another history post up on Wednesday. I also have a funny story about The Wizard of Oz and looking up the skirt of a model, but I can't work on that until I get the history post up...

Also, tomorrow I'll announce the first book for The Dinosaur Trader book club, soon to rival Oprah's in importance.

Finally, you have just one more day to vote for Jon Swift. Please do.

Okay, now the numbers... out of 27 traders today, 20 were gross positive, or 74%. 10 traders finished up over $1,000 gross and only one lost over $1,000 gross. Those are the best numbers we've seen since the start of 2009... let's hope the worst is behind us. I was #9 of 27, happy to finally make a living wage again.

"Lucky Pierre" - Trader B, $9,850 on 163k shares traded.

2. Trader N, $8,794 on 135k shares traded.
3. Trader C, $6,768 on 161k shares traded.
4. Trader H*, $4,176 on 23,700 shares traded.
5. Trader V, $2,558 on 50,200 shares traded.

"Chambermaid" - Trader M*, -$2,110 on 0 shares traded.

2. Trader J, -$521 on 10,600 shares traded.
3. Trader 6, -$502 on 1,900 shares traded.
4. Trader O, -$323 on 37,400 shares traded.
5. Trader 9*, -$322 on 1,700 shares traded.


Here's your heatmap and technical analysis of the day.

A Trade In SPY

Man, last week was so tough, it was difficult to find a trade that I wanted to highlight.

On Friday, I lost money. However, before I lost money, I was actually up decently. At one point, I was even top dog in the RO.

It was a brief moment.

What got me there was a long trade. I had been watching the $89 level on SPY. It's hard to remember if I came up with this wonderful support level on my own or if it was pointed out to my by the HCPG collective. (As an aside, a bunch of pansies read that newsletter.)

Anyway, not only did this approximate level represent the price on the downtrend line from the late November rally, but, making the support even stronger, theoretically, was the 50dma at $89.07.



So when we moved down to this level in the SPY, I started long positions in SPY and a couple of other names. I'll just highlight the SPY trade, since it was the impetus for the whole trade.

One little caveat... I bought and sold SPY many times trying to jump the gun on this one. And so I was down quite a bit before the support was hit. Looking back, it's hard to know what the heck I was thinking. This market rewards patience.

Things have changed from the gunslinging trade we were enjoying just a few weeks ago... again, adapt or die.

So I picked up all the SPY I wanted, between $89.20 and $89.28. I couple thousand. I only got so aggressive because support was either going to hold and I was going to be okay, or it would break and I would immediately exit. The low of the day at this point was $89.14, so I was realistically risking $250 to $400.

Support held. However, volume didn't exactly flood into the market like I was hoping. Instead, it slackened, so I immediately started to take profits. I sold 1200 of my 2000 share position between $89.43 and $89.57. With some profits locked in, I could now afford to sit back and watch a bit knowing that even if it came all the way back to the lows, the worst case scenario was a breakeven trade.

$89.75 became a sticky area that SPY couldn't fight its way above, so I exited 400 more shares at $89.67. So I had 400 left.

Now, I decided to move this last 400 stop to my entry instead of waiting for a new low. I'm never sure what to do in this situation... keep the stop at my original level, or move it up. Because I was down on the day and unenthused by the volume from a significant support level, I opted to move it up. As a result, at 10:30, I was stopped from the trade at $89.25.

Shortly after, the stock made a new low, but held $89. I thought it could be making a double bottom, so reentered the long and bought 1000 shares at $89.31. I put my stop at $88.99 and told myself to just walk away.

In fact, I didn't walk away. I never do...

I exited 300 SPY when it got up to the sticky $89.75 area just after 11am and then watched the stock slide backwards all the way back to my entry. This action blew. 20 minutes later I had another opportunity to exit and I sold another 200 at $89.90. I was happy the $89.75 level broke but looking back, I should have taken a friends advice and used that level, $89.70-$89.75 to stop the last 500 of my position...

Instead, I ended selling 100 more at .50 and the rest at $89.33.

Going forward, without a significant uptick in volume and volatility, I'll be following more trades like this, where I can put on some size by what I deem to be an "important level."

Souls Of Mischief, "93 'Til Infinity"

No word from Trader N, so I'll post something I think the RO will find worthy.

The RO Report, "Grind" Edition

This market is getting scary. Every trader I knew thought we had a lot to look forward to in January and instead, we're getting a really awful trading market.

Or things have just changed and it's time to adapt again. A whole new learning curve, just when you thought you had it sussed.

But that's the game we play. Adapt or die.

I lost a bit today. For the month, I'm flat. I'll take it. Preserve your capital and keep studying. There's an edge that you have to find.

Again, the numbers are similar. Out of 28 traders today, 17 were gross positive, or 61%. 4 traders made over $1,000 and 6 traders lost over $1,000. I was #15 of 27. Lame, but I'm trying lots of new stuff. The Manservants win again.

"Chambermaid" - Trader B, -$25,258 on 684k shares traded.

2. Trader D, -$17,805 on 187k shares traded.
3. Trader H*, -$3,228 on 15,000 shares traded.
4. Trader L, -$1,539 on 34,600 shares traded.
5. Trader 8, -$1,456, on 12,800 shares traded.

"Lucky Pierre" - Trader N, $5,686 on 80,800 shares traded.

2. Trader Z, $2,293 on 124k shares traded.
3. Trader 9*, $1,657 on 0 shares traded.
4. Trader P, $1,009 on 68,400 shares traded.
5. Trader F, $740 on 137k shares traded.

Linkday

I'd like to hear what Danny thinks about these guys. Fast forward to 2:20. Just, sick!

Foresight.

Another life saved by "The Secret."

How about a Fund of Fund of Funds?

Okay, I'm a little twisted, but I can watch this over and over...

Hilarious predictions for 2009. My favorite? "Axl Rose withdraws Chinese Democracy, saying he needs just a little more time to work on it." Meanwhile, vote Jon Swift.

Irony.

Animal Collective is one of my favorite bands. Their new album just got an amazing review. 9.6 from Pitchfork doesn't happen often.

In a public relations effort, Thai police are wearing smiley-face masks.

Did you know that elephants can feel grief?

Calvin & Hobbes on the financial crisis.

Hard to watch but important to see.

Jay Z, "Brooklyn We Go Hard"

The Trader D spray choice. Earned by doubling the #2 Boss.

The RO Report, "Yawn" Edition

The RO spent the better part of the day churning and discussing the death of daytrading. I tried, in vain, to get them to spend their time fruitfully by making WeeMees, but no one listened.

So, while I didn't make any money today, at least I have a bangin' WeeMee.

This employment report tomorrow better do something to this market... January wasn't supposed to start this way. I was expecting some activity. Instead, it's like late August without the warm weather and summer people.

We barely traded over a billion shares today...

Still, the "Lucky Pierre" of the day, Trader D, managed to make impressive profits.

It's sometimes unfair, having to trade beside such greatness. The man lives like a king, and has a really nice little dog, to boot. Kudos, Trader D on your continuing brilliance and congratulations on spraying (2x next dude) to get your reward, a song choice. Perhaps eventually, he'll grace us with that post he won...

Still, despite the valiant effort by Trader D, the Manservants took the day. And note that 3 out of 4 Bosses are swing accounts (denoted by the *). Active traders weren't happy today. Out of 28 traders today, 18 were gross positive, or 64%. 4 traders made over $1,000 gross, while 4 traders lost over $1,000 gross. I, again, was #12 of 28. Odd how similar these numbers have been all week.

"Chambermaid" - Trader B, -$7,728 on 401k shares traded.

2. Trader A, -$3,434 on 248k shares traded.
3. Trader C, -$1,333 on 34,700 shares traded.
4. Trader Z, -$1,176 on 37,200 shares traded.
5. Trader R, -$844 on 43,200 shares traded.

"Lucky Pierre" - Trader D, $6,220 on 100k shares traded.

2. Trader H*, $2,075 on 8,500 shares traded.
3. Trader 9*, $1,345 on 0 shares traded.
4. Trader M*, $1,044 on 0 shares traded.
5. Trader L, $872 on 49,600 shares traded.

Here is your heatmap and a touch of technical analysis.



Tomorrow I'll have my first "Friday links" post up which will showcase some fun things I found on the Internet this week. Also, please support Mr. Swift... let's edge him into second place! You can vote once a day.

"Wash Your Dishes Happily"

Sure this is a blog about trading and the trading lifestyle, but close readers know I have this thing for perspective... so enjoy this video by Zen Master, Thich Nhat Hanh.

Nas, "Big Things"

Fuck.

The RO Report, "India Is Still There" Edition

I don't know what's with this market. I'm not talking about the daily fluctuations, I'm talking about the volume. It sucks.

Are people extending their Christmas vacations all the way to MLK day this year? Is that what's going on?

Anyway, we went lower all day... just a slow bleed. I made some completely idiotic trades early, because I got all excited about the demise of the subcontinent known as India. It didn't happen, and I got my balls squeezed off by a stock with the most ironic ticker symbol, WIT. It's ironic because that stock is a dumb fuck.

Get it?

Sheesh.

Here's the numbers...

Out of 29 traders today, 18 were gross positive, or 62%. Similar to yesterday. 9 traders made over $1,000 gross, and 6 traders lost over $1,000 gross. Again, similar to yesterday. The difference between the 2 days was that the numbers were a little better today to the upside, and not as ugly on the downside. I was #12 of 29, still underperforming.

"Lucky Pierre" - Trader B, $11,455 on 399k shares traded.

2. Trader A, $5,656 on 117k shares traded.
3. Trader Z, $4,261 on 107k shares traded.
4. Trader F, $3,530 on 115k shares traded.
5. Trader N, $2,868 on 109k shares traded.

"Chambermaid" - Trader D, -$3,992 on 165k shares traded.

2. Trader H*, -$2,994 on 39,600 shares traded.
3. Trader I, -$2,269 on 8,400 shares traded.
4. Trader 9*, -$1,954 on 0 shares traded.
5. Trader 7, -$1,386 on 58,000 shares traded.

Having issues with the heatmap, but here's a little technical analysis.

NOTE: I've opened up the commenting section to allow anyone to comment again. Limiting it to Google accounts only is annoying. We will see if random haters hiding behind anonymity is more annoying... if so, I'll just turn them off again.

The Invisible Man

6am, World Trade Center.

You exit the subway, walk over to Broadway and make the left onto Wall Street at Trinity church, noting the labryinth and graveyard where eventually, you'll spend some time. You pass the NYSE and across from it, the old Federal Reserve building with the heroic statue of George Washington. It begins to rain and you're hungry. You enter the atrium of the JP Morgan building which stands further down Wall Street, to seek shelter.

This is where you'll spend every morning for the next couple of years.

It is filled with metal garden tables and chairs. It is a good place to sit and have breakfast. It's bustling but hushed; the room is too large and devoid of objects to collect sound. Instead, you realize as you look up, all those voices and clicking heels, swishing coats and scraping chairs are lost to the ceiling.

Temporary sounds.

But there is one man trying his hardest to be heard. You notice him standing next to an empty table speaking loudly, shouting even, to another man. He smells strongly of cologne and, like his friend, is wearing a blue shirt with a white collar and a yellow tie.

The uniform.

He doesn't notice you as you take a seat at the empty table and shake the rain from your coat. He's telling a crude joke about a girl he spent the last evening with who apparently, works with him.

He banged this chick; she was drunk.  Somebody's sister. Somebody's daughter. Instinctively, you hate this man. But it's cool, you know who he is and you know what he's about. He doesn't know you.

You're invisible here as you settle into the belly of the beast and you slip an IBD out of your knapsack.

He banged the chick, he fucked her, left her place at 3am and ignored her the next day at work. Now he's laughing with his friend and he says he's going to fuck her again this weekend.

His friend has lots of gel in his hair. He's shaking his head. He's laughing at his friend. "Fuck her," he says and then changes the subject to golf.

It'd be so easy to fit in with these idiots, you think. The code is so simple: Follow.

But there is a different way. You put on your headphones and start reading the paper.

On this morning, your first morning since passing the Series 7, you feel very much like an outsider dressed in your casual clothing of jeans and a flannel shirt. It's okay, being an outsider suits you and you're not selling anything. Compared to the well dressed and oiled people streaming by, you look not only like a kid, but like a poor scruffy kid. What are you doing here?

You're competing. You're going to make your first trade today.

You circle symbols and highlight relationships you find in articles. You decide to check the profiles for AVY and RDN when you get to the office. Early on, these will be two of your favorite stocks to trade. You're looking for an edge here, in these printed words.

But your edge isn't in the IBD or WSJ.

You take a moment to zone out and look out the revolving glass doors at the front of the building. The loud guy is out there, confident like he's standing in his own backyard. But he's not the "best and the brightest." He's just a well-connected shit who's not humble enough for the stock market. A chauffeur opens a car door and he's gone behind the black tint. Probably off to the airport. Temporary sounds.

No, you think... your edge isn't in the IBD or WSJ. Your edge is in your desire to beat these guys. Indeed, there is a different way.

You read for another hour before walking down the block to the office on Water Street. You're thinking about the uniform, the loud guy, the girl, the game. You stop into an independent coffee shop next to your building. In a year, it will be bought by Starbucks. The followers are weak and strong at the same time. Crowds have power.

You need to learn how to take them apart.

You enter the office building, take the elevator to the fifth floor and step out into an antechamber. Looking to your right, you see a door that opens to a dark, quiet, mahogany-lined and brass-knobbed, Wall Street office. A soft chuckle escapes, a phone rings and then a man in a blue shirt with a white collar, wearing a yellow tie, slips out. The door to your left opens to a dusty, just sheetrocked, flourescently-lit space that is echoing and alive with the sounds of yelling and clacking keyboards.

The new trading floor opened only days ago and your computer is finally ready. Two guys speaking Russian exit smoking cigarettes. They look like gangsters and probably were just a short time ago.

You take off your headphones, walk into the impossibly bright room., and realize that you're never going to have a boss ever again... ever.

Sonic Youth, "Mote"

Fuck, "boss music."



R.I.P Stooges guitarist Asheton.

The RO Report, "Grind" Edition

I'm trying to tell myself that it's cool the world isn't ending, but the sad truth is that it was much easier to make easy money when it was...

Back in November when I was stashing money in my basement, and having cool thoughts like, "Does it matter if I made $2,000 today when it's just going to become bribe money to escape into Canada?" things were actually grand!

Now I'm back to sweating $200 losses and thinking about "coming up with a new strategy" which means I'll be poor again in a few short weeks. Being professional sucks. God I hate 2009.

Anyway, we're closing in on nearly 200 Diggs for the BSMBP which is great. Thanks to all who have helped. And let me take this opportunity to remind you to go vote for Mr. Swift.

Also, I need your help in coming up with a new way to present the RO. Any ideas that could get me away from the actual figures and lead us down a more "relative value" road would be good. In that way, I could present the entire RO, but not the actual numbers.

For now, I'll keep it the same. Out of 28 traders, 18 finished gross positive, or 64%. 7 traders made over $1,000 gross and 7 lost over $1,000 gross. Crappy. I was #9 of 28 but barely beat commissions. The Manservants kicked ass.

Finally, please be sure to check in tomorrow. I will have a history post up. First time in over a year.

"Chambermaid" - Trader B, -$20,775 on 941k shares traded.

2. Trader D, -$7,786 on 290k shares traded.
3. Trader A, -$7,473 on 431k shares traded.
4. Trader L, -$5,115 on 84,200 shares traded.
5. Trader C, -$3,675 on 85,000 shares traded.

"Lucky Pierre" - Trader H*, $3,781 on 12,400 shares traded.

2. Trader 10*, $3,565 on 5,000 shares traded.
3. Trader N, $3,564 on 84,088 shares traded.
4. Trader P, $2,727 on 86,274 shares traded.
5. Trader G, $1,789 on 66,200 shares traded.

Here's your technical analysis of the day and your heatmap.

The Dinosaur Trader Book Club

As 2009 begins, I've decided to try and be more professional about trading. It's funny... I've traded full-time for a decade, yet I've never really defined myself as a trader. As you'll read in Wednesday's history post, I've kind of always viewed myself as somewhat "anti-Wall Street" even though I'm in the belly of the beast.

So look, I'm going to read more this year. And, in an effort to make this blog somewhat more "useful" to you, my readership, I'm going to share which books I'm reading, and when I'm reading them. That way, you too can read them and we can discuss them, in an open thread which will be posted permanently under the title of the book. Get it?

We can learn together.

Anyway, I'll announce the first book next week.  No, I don't need any of your fancy ideas...

My Discipline Problem

For some of you, the hardest part about trading is "letting your winners run" or "cutting your losers short."

I sympathize. However, for me, the hardest part about trading is actually getting to the part where I can say I know anything about how I trade and understanding where my strengths and weaknesses lie. You need discipline to sit and go through your trades.

I mean, I head over to Trader X's site and he's like "keep a trading journal." Know thyself. I check out the Warrrior and he's like, "Check out this awesome chart pattern... I'm rich! Oh, and my blog is available on Kindle!" Everything seems so simple for these guys.

But you know, I bet they're doing work too and that's not what I'm about.

In fact, instead of actually going through graphs right now (like I planned on doing) I'm here writing a bullshit post about how I can't find the discipline to go through graphs and figure out how I should trade.

It's my particular curse that I need to trade for a living, yet I have no interest in actually studying how to trade. Somehow, I've done this for a decade.

So here's the plan. I'm going to "scheduleize" my life and this blog and see if it makes me more efficient. One of my goals in 2009 is to be more "professional" and this is a necessary step in that direction.

Below is a rough publishing schedule for this blog, going forward. I have a similar, though much stricter, "daily life schedule" that I'm imposing upon myself in my non-virtual life.

I'm hoping that by making order out of some of the madness around here that I get more done.

Monday - A post that discusses a trade I made.
Tuesday - Around the house
Wednesday - History post
Thursday - Porn and politics
Friday - Links from around the blogosphere.

The only things that are set in stone at this point are Monday, Wednesday and Friday. The Friday thing is a new feature... And for now, the RO posts will continue on a daily basis.

Feedback welcome. Go!

Seel Fresh, "NickelPimp"

The RO wants desperately to see this blog die... you can tell by the music they post. However, this song is really, really funny. Nice pick, Trader B.

The RO Report, "Fuck NAV" Edition

Not sure how many of you wasted your days shorting NAV today, but if a couple of you are out there, you'll appreciate the post title.

I pretty much gave my day to that godforsaken stock...

Anyway, enough about me and my inability to notice that a stock I'm shorting has earnings news... for all my anticipation about "getting back to trading" today, the market was... well... kinda lame. I mean, volume didn't really pour back in or anything, we just kind of fucked around.

We went down a little, then retraced a little, then did nothing much for hours, then popped higher, and then dropped, only to bounce a little in the end. How's that for analysis?

IN YOUR FACE, CNBC!

Look, I'm not going to lie to you, I'm in an awful mood. I had food poisoning Sunday night and I'm still recovering.

Let me ask you this... have you ever thrown up so forcefully that you had a bean lodged in your nose? See, because I hadn't either... but Judy didn't really see fit to give me any sympathy despite the fact that at 2am, I had a fucking BEAN LODGED IN MY NOSE. And frankly, I'm still a little sore about it.

So let's get right to the numbers, and start welcoming 2009 again tomorrow because so far, for me, 2009 has been like, really, really mean.

Out of 28 traders today, 21 were gross positive, or 75%. 7 made over $1,000 gross and 5 lost over $1,000 gross. I was #15 of 28, or, trading like I had a BEAN LODGED IN MY NOSE.

Oh, and for the first time today, a "Double Dong" occurred. This means that the top two traders on the day were the same guy, his daytrading account and his swing account. Not bad.

"Double Dong" - Trader B, $13,072 on 394k shares.
Trader H*, $7,345 on 8,400 shares traded.

3. Trader 10*, $4,983 on 600 shares traded.
4. Trader C, $2,355 on 51,544 shares traded.
5. Trader 6*, $1,609 on 1,600 shares traded.

"Chambermaid" - Trader N, -$16,663 on 140k shares traded.

2. Trader F, -$7,345 on 79,300 shares traded.
3. Trader L, -$1,986 on 47,900 shares traded.
4. Trader D, -$1,358 on 189k shares traded.
5. Trader M*, -$1,075 on 0 shares traded.

Oh, and here's the "heatmap." And, how about a little technical analysis?



UPDATE: Up at 123 Diggs on the BSMBP! Thanks!

REMINDER: GO VOTE FOR JON SWIFT. IT'S EASY... NO LOGIN, JUST CLICK AND VOTE.

Thank You. It's Good To Be Back.

I wanted to thank all of my readers who took the time to Digg the BSMBP. I also want to extend a special thank you to Trader X and Complacent Panda who both went the extra mile to help me spread the post.

Meanwhile, if you haven't Digged it yet... ahem... ahem...

As it turns out, it was my most widely read post to date.

Now, in case you missed the history involved with the BSMBP, I stole the idea for it last year from another corner of the blogosphere, the funny part. Over there, in the funny part of the blogosphere, my friend and "inspiration" Jon Swift, is a finalist for the Weblog Best Humor Blog of 2008.

I know how nice it is to receive a helping hand on the Internets, so now I ask you to go and vote for Mr. Swift. You may vote once a day until January 12th.

If you are unfamiliar with his fine blog, it's decidedly "first-tier" stuff. Check out his "best of" and then go and vote. Blogging can be a rather thankless task, and it's nice to receive some positive feedback, be it in the form of Diggs, comments, or a shiny Weblog award.

Meanwhile, it's good to be back. It was a nice week off. I have some changes in mind for this blog which I will detail in a post tomorrow.

Stock Market Story

As promised, I'm going to make a real effort to write one history post per week in 2009. I will publish one each Wednesday.

Here is the tease for this Wednesday's upcoming post.

6:00am. The World Trade Center.

You exit the subway, walk over to Broadway and make the left onto Wall Street at Trinity church, noting the labyrinth and graveyard where eventually, you'll spend some time.

You pass the NYSE and across from it, the old Federal Reserve building with the heroic statue of George Washington. It begins to rain and you're hungry. You enter the atrium of the JP Morgan building which stands further down Wall Street, to seek shelter.

This is where you'll spend every morning for the next couple of years.