Wednesday, October 29, 2008

Last Hour

No sooner than I was done kicking myself for not getting long the greatest last hour rally (Tuesday 10/28 2pm cst) than we had the biggest last hour head fake (Wednesday 10/29 2pm cst).  I left the office Tuesday angry I did not "make more."  Wednesday afternoon's action showed me why Tuesday afternoon was not my pitch.  And there have been plenty of pitches to look at and swing at lately.  Which brings me to some data I have been following...

At Trading RM we have several propietary oscillators.  I particularly track one that compares the S&P daily range to NYSE volume and another that compares the # of 5 and 10 point S&P moves to NYSE volume.  The high mark in my oscillators were obviously mid September and Mid October.  In both situations NYSE volume spiked ahead of the daily ranges and the intra day moves.  

This week I have seen the daily range of the S&P begin to spike again along with the intraday S&P point moves. However NYSE volume is somewhat flat lined.  I know many traders look for a revisit to a stock/index level on less volume to fade the move.  I am not exactly sure what my data tells me, but I will continue to watch if expanded daily ranges and point oscillation is met with increased volume or static volume.  

In the below chart the green line is the 5 day NYSE volume moving average.  The pink and green lines are moving averages of the S&P daily range.  Again... I will watch to see if expanded ranges (crazy last hour moves) are met with increased volume or not. 



On a side note, this is the CNBC quote of the week, compliments of Mark Haines: "If you can't handle the truth get out of the kitchen."  ????

 

Thursday, October 16, 2008

I find writing on the blog to be very therapeutic.  The last few days have been profitable ones, although not as profitable as I had hoped.  My ideas have been right, but the execution hasn't been as strong.  I would rather get paid, than be right.  As frustrated as i was, i need to realize that keeping it green on a consistent basis is also very important.  Being emotional and hard on myself comes with the job.  I need to step back enjoy the evening and come back tomorrow (expiration) and execute my game plan. 

Tomorrow (friday) is expiration.  This could possibly be the craziest/weirdest expiration you have or will ever see.  We are currently getting a minimum range of 700 DOW points every day.  That being said, if you are down money in the morning, there will be plenty of time/opportunities to make it back during the day.  Make sure your head is clear and emotions in check. 

This article about the VIX makes me happy to be trading.

http://www.cnbc.com/id/27220935/site/14081545

Wednesday, October 8, 2008

CNBC's credibility

If there is anything humorous about the last 6 months of market activity, it has been the implosion (in my opinion) of CNBC's credibility.  Here are a few things heard/seen on the channel over the past few months:



  • Several instances of a host saying "breaking news...right after the break."  How important/real time is the news if a few commercials need to be fit in first?

  • Today, October 8th, the focus has been on the rally(s). No mention that Ford (F) is on its way to zero. 

  • Cramer: Has made his recent career of giving the public stocks to buy ever day.  Recently he now says it is time to sell everything.  Thanks for the heads up.

  • They repeatedly have a guest named Hugh Johnson.  Are they trying to give trading desks ammo? Didn't Bart Simpson used to look for him at Moe's Tavern? 


  • Some genius recently uttered "the market won't be at this level forever."  Someone got paid to say that.

  • B. Pisani - 1) Why do you have to walk briskly when reporting?  2) Were there really people "cheering" the rally this morning on the floor with "many more on sidelines ready to jump in?"  Head cheerleader. 


  • Comment days ago: "only forced sellers today, no buyers." 

  • Next week look for guest commentary from Carl Spackler.  " I'd keep playing. I don't think the heavy stuff will come down for a while."





Wednesday, October 1, 2008

September Recap

September was a monumental month.  Here is what I learned about my trading and myself:


  • Timing...whether the market was crazy (end of month) or slow I was paid well by using my timing principles. When I chased or went outside my timing guidelines my PnL took a hit.  Busy or slow I need to stick to my guns. 

 



  • Sector trends...I can and do go against trends.  However reviewing my trades I found it beneficial to be more aggressive on short terms trades in the direction of longer trends, and less aggressive short term against the longer trend. For example early and mid September Agriculture names (MOO) were is a huge downtrend.  When I had intra day long set ups I was less aggressive than intraday short set ups. 

 



  • Profit goals...I seem to get blinded by the one time out of ten that my nice winners turn into monster winners.  I go for the 500 foot homerun every time.  Upon further review my equity would be higher at month's end had I taken 10 of 10 trades off at my initial profit goal, as opposed to holding some or all of my positions for the homerun. 

 



  • Opinion vs fact: this was touched upon in greater detail in my last post.  I did better when trading the names that were moving as opposed to trading the names I thought should be moving. 

 



  • This picture is humorous, I'll let you draw your own conclusions: