Trading Funk

I feel that I have been in a little funk lately with my trading. Over the weekend I thought long and hard about what I have done right and wrong this month and how it has impacted my results. At the start of the month, I felt I was trading well, managing risk and hitting doubles and singles. With a good start under my belt, I started speculating in cheap options in great size trying to hit a couple of grandslams.

While I was correct in thinking these crap stocks would rally, I was early. I would have been better served buying equity, as the options expired worthless a week before the moves I was looking for took place.

So it is back to the basics. I will stop all speculative trades in options, and be patient with my equity trading, until my results are more in line with what I expect. I also will cease looking to hold things for more than overnight.

I don't need to be Babe Ruth or one of todays modern steroid using homerun hitters. A guy named Ted Williams did pretty well just hitting the ball.

Finally a selloff

Finally we got the selloff we have been waiting for. Unfortunately you needed to be set up for it on Friday which I was not. I booked a modest gain yesterday, but it was nothing special. I am not really sure about today, as I expected a gap up this morning, following yesterday closing at lows.

Because of this, I will look to rally after the open in what will be a set up for more selling pressure today. Hopefully I can position myself to fade this rally.

What a week

Wow, I really fucked last week up. I tanked my whole month in a few poorly placed options trades. Going forward, I here by pledge that no matter what, when I have my position paid for I will at least cover half of my position. No ifs ands or buts. That is all I will say about last week and Friday in particular. I was pretty mad at myself all weekend, but its in the past and on to the next day.

The market is opening down which is good for my SRS calls spread. Depending on the action today, I look to get into some short positions in names such as ZLC, PIR and other such turds that are up 500% plus.

On the open I will be watching the banks with special attention to STT, STI, and BBT for short opportunities.

Good luck

Its been a while since my last post, and this one will be cut short. I have had some time constraints this week, so I will get back to it on Monday.

Yesterday, I had a very uncharacteristice blowup. I traded extremely well in the morning trade, only to give a lot of my gains back at the end of the day. The move in reits really took it out of me as I was run over repeatedly only to miss the sell off. I was extremely frustrated and did some dumb things with sizing. This will be a focus today and over the weekend. Good luck.

Plan for the day

I look for today to be a busy day, and after Goldmans shennanigans, I expect the market to finally sell off. I have prepared a list of names that I will be working my way into today after the opening sequence. My ideal set up would be for us to go positive right after the bell, but we will see.

DRI- A lot of you chart munchers will look at this stock and say, "It has broken out to new 52 week highs, blah blah blah" That is precisely right. However, they also sell bad food to people who have found themselves recently unemployed. For this stock to be at 52 week highs is absurd.

MGM- this stock has more than tripled this month. Stocks that have made this kind of move can be tricky and even if it is worth $3 it could go to $10 first. Vacancy rates are still poor, and CITY CENTER is not complete. Worst case scenario, Vegas, other than the strip, will completely go away....This will be a day trade, and if it works I may look to keep part of the position and let it ride.

COF- I think this stock is entirely fucked and will burn in hell when the massive wave of credit card defaults starts. I will try to be careful with my entry on this one, as BAC and C are already up sharply this morning as people are still buying crap in full force.

DRL- If I can get a locate on this, I will start building a short position today. Nuff said.
RTH- I am not buying into the consumer pulling us out of this crap, and I like short into retail sales.
Good luck today ladys and gents.

Post from Fly's site

Ruby Tuesday

Please feel free to follow the link and give my post a high rating. Also feel free to vote against my competition.

Day after Easter massacre?

Well not exactly, however, I am short and would love nothing more. Coming off Thursday, I am long SRS, short FAZ puts, long ZLC puts, and short RT. At the minimum, I was expecting a gap down before going higher, so I am not married to these positions, and will take profit if the market shows strength.

Looks like GS is putting that TARP money to good use and starting a new fund.

ESRX is buying some units from WLP.

Keeping it short today, will post more on Fly's blog at Ibankcoin.com

Plan going into Monday:
--If market continues Thursday's gains, will look to buy some transports(mainly rail's), select Tech names(looking for good entry points in the hardware industry), nibble at some materials(ex-energy:ex. chemicals, base-metal miners), and watch how healthcare names perform at the open. Will also look at continuation of REIT's. As fundamentally poor as many of these names are, its tough to argue with recent price moves.
--If market the market gaps down, and the market internals signal price moves towards the offer will look to sell apparel names, home improvement/furnishings/anything housing related, advertisement, travel and leisure names, energy, and industrial names that seem to be exhibiting bearish setups. Depending on how commodity names behave early on, I will also flirt with selling some country ETF's whose economies are based highly on commodities as well as Chinese ETF's and individual names.
The easy trade has been difficult to find this week. I am having a hard time leaning one way or the other, so in either situation I will tread lightly and look to cut losses early at any sign the market is not confirming my hypothesis.

So this is mainly a way an opportunity for me to keep myself accountable. Secondarily, to use this site as a central point to keep idea's together and aggregate item's I find noteworthy. Enjoy.... or don't. I honestly don't care.

Is this the blackswan of short-term trading? And its followup. Many short-term trading strategies are mean-reverting. However, if liquidity is drying up, and an event like the one talked about above is coming. The last strategy you will want to use is a mean-reverting strategy.

Looks like a big morning

Well with WFC reporting a record quarter out of nowhere, I am left somewhat speechless. Looks like financial bears will be castrated today. I need to delve into the reports more, but my instinct tells me a lot of this is refi related. As I feel the housing market will continue down, these new loans could pose problems down the road. As it stands however, I want no part of shorting any banks until all have reported. I may try to pick up some BAC calls.

In other news it looks like TXT may get a $21 per share bid from UAE and Kuwait. I am a little sceptical about this one, and may look to pick up some puts when the stock levels off after the open. I picked up small shares at 14.00 this morning and took a quick 2.5 points. If the ports deal was any indicator, the U.S. government does not like arab countries owning things that are connected to defense or security.

International exchanges were up accross the board. I will cut it a little short today to comb for opportunity. Good luck.

Insurers to get a piece of the pie?

Insurance stocks such as MET, PRU, LNC AND HIG are all up sharply on speculation that they may be allowed to borrow from the tarp. This could spark a pretty good rally in the sector, and I will look to bottom fish some of the more downtroden names.

Looks like Pulte will buy Centex. I guess they decided to pool resources and build houses nobody wants to buy.

I don't see how the market will stay down based on these stories. Coupled with BBBY's earnings report, I expect the market to go green and make a substantial up move after the open. I will be looking for good long set ups after the bell.

PLD is keeping the trend going with its very own secondary.

Asian and European indexes were mostly down.

Another reason I am glad I am not a Californian.

Market gapping down

Perhaps a little sense is creeping back into the market as we gap lower today. Most Asian and European markets were down sharply overnight, and the dollar is up sharply over the Euro.

Looks like GM and Chrysler are stepping up bankruptcy preparations. I must admit that I never thought Obama would let them go into bankruptcy. Although this is necessary if they are to ever recover, it will be extremely painful for many people in the midwest. If GM closes down most of its brands and is left with Chevy and Cadilac, how many dealers accross the country will be forced to close shop. Everyone who sells the other brands can't just start selling Chevy's or you would have unsustainable competition.

In M&A news DISK and Nyx (not nyse) have agreed to ammended merger terms. (Full disclosure) I have taken a position in DISK this morning as I beleive this deal will be done. It shows good faith that Nyx is adding $1 million in working capital in the interim. This sum represents close to 3% of the total purchase price and is non recourse. (These statements are all my interpretation of the facts and are not intended as investment reccomendations).

I know that Meridith Whitney's comments yesterday goosed the market at the close, but I don't beleive she has really changed her stance. Not wanting to initiate shorts at this level does not mean she thinks they are worth buying. Companies and consumers are defaulting at an increased rate, and this trend is likely to continue. I am not short any banks, but I don't think Dick Bove was correct in saying BAC would return to highs. At least not in the next decade, in my opinion.

Monday Morning.

Europe and Asia are up small , and if we don't get a sell off in U.S. equities today, I think I will start kicking small dogs. We could use a nice 15 point down day in the S&P.

As today is Monday, my main focus will be on risk control after the open. ( I have a tendancy to overtrade on Monday's.) I will be diligent in selecting high probability trades during this time.

Calculated risk has an article about proposed mortgage legislation. If this bill passes, I do not see how it can do anything other than further retard growth. I don't feel that we will ever return to the level of securitization we had in my lifetime, but moves like this are going to keep the housing market down for a long time.

More good news for Banks. I love how the government can be propping up banks with one hand and bitch slapping them with the other.

As I noted yesterday, IBM and SUNMICRO have hit a snag, and JAVA is down 22% in premarket trade.

Interesting but long article about the Dow from TBP.

Looks like during my writing this post, the market has reversed and we are now about 10 points lower. Hopefully the selloff will hold. Good Luck.

Sunday, Sunday, Sunday

Well, its Sunday again, leading up to my favorite day of the week, Monday, when the trading week is new, and I generally like to give other market participents a lot of money. I am hoping not to repeat last weeks abismal Monday, which was the only blemish on an otherwise good week.

I have read reference to this story about KIM on a few blogs so I will link to it because I traded the stock on Friday, and took notice of the massive volume and strange price action. I shorted it on the open assuming it would eventually trade down to the offer price of $7.10, however, buy support at the $8 level was insurmountable. I don't know if any thing is fishy, but I still think KIM is a stinker.

Looks like the IBM for JAVA for deal has hit a snag.

It looks like HSBC executives are using the recent market run up to raise capital via dilluting the hell of current shareholders. I am sure all of the U.S. banks will soon do another round.

I really wanted to short the market over the weekend into the strength at the close and seemingly low volume in most names, but I don't really trust the market right now. It seems a lot of people really beleive things are starting to turn around, and I can't buy in to that. I also realize I am not nearly big enough to fight the crowd. So, I closed out my FAZ call spread for a $.55 loser and only initiated a long put position in ZLC. See you Monday.

-663K..... looks pretty good?

In Europe, the messiah and the super friends are busy saving the world, but here in the good old US of A, people are still losing jobs.Well I guess some people still have jobs, and thats something, right? We got an initial pop in the S and P from the jobs number, lets see if we can hold it. I must admit I am sceptical.

Asian indexes were up while European indexes were mixed.

I am not looking at any option trades at the moment, and as the market opens I will look for scalps.

I am still tinkering with format and such so starting Monday, there should be a framework for the morning posts. That is all for now.

The days trade

I originally said this would be a one post per day kind of thing, but then I figured It would be good to review the day so here goes.

I was positioned well for the rally with calls. I didn't take any profits but I did hedge at the end of the day with an FAZ call spread.

I also covered most of my ipsu position because it has failed to rally on low volume during two huge up days.

I kept trading light today because I didn't see any good reversals. The set up I really like was a breakout of consolidation in KSS. I feel I managed risk well today, and hope I am set up well for tomorrow.

RIMM is a monkey wrench in the machine. I felt we would gap lower tomorrow, but with the way they are bidding that thing up, who knows.

M to M

Looks like all major international and U.S. markets are up today. The ECB cut rates less than expected, and the Euro is mudstomping the dollar. Thus far the market is shaking off the highest initial jobless claims since 1982.

My thoughts on the day are mixed. The mark to market decision could spark a hard rally, but the news could also be baked-in to the recent run up from lows. Should make for an interesting day.

Solars have performed well over the last week and a half, look for them to outperform the market until the uptrend is broken.

Who knows what is in store tomorrow

Well today's trade seemed to be fuelled by buying ahead of the FASB decision tomorrow on mark to market. Regardless on your feelings about this issue, if the changes are made, some companies will really benefit.

I feel we will get a rally out of the news that could last until the end of the day. In anticipation, I have bought some calls in names I feel might benefit like ACAS. Either way should be an interesting day, and we should get a good push one way or the other. Good Luck.

First Real Post

Well, this is the first real post. This is a work in progress, so I am sure that things will change frequently and this thing will evolve over time.

Asian indexes are mixed this morning while European ones are down modestly. American indexes are set to open lower as well. ADP is out and ugly. I will be looking for the S&P to reverse and go positive in early trading.

Not surprisingly, the president, seems wishy washy again, as after only two days ago saying GM had 60 days to submit another plan, it looks as though Obama is pushing for a swift bankruptcy for GM and Chrysler.

No big earnings yet but we will soon see big names begin to report.

Interesting article about what Citigroup traders are thinking.

Looking at dividend yields, Atlas Energy ATN, looks tempting. At yesterdays close dividend will yield 22.4%, and the stock might have support at $10.00. A less concervative stop could be placed just under $8.00. Will buy small today and do more research.

In the M&A world not too much of importance going on. Arb premium for WYE is $3.38 or 7.84%, and for SGP $2.38 and 10.09%.

Well boys and girls, I believe that's it for today. If none of this is interesting, please remember it is a work in progress. Feel free to leave suggestions.