Monday, November 19, 2007
Simon: Market View
i think that the dow and SPX will continue to show weakness. QQQQ can follow their lead but i am betting that big cap tech is going to have a rally soon and bring up the rest of the markets. this is pure speculation based on my chart research. i suggest parting your money between bull and bear positions with more leaning towards the bear. sectors that will bring down the market will be financials and leaders if there is a turkey day rally will be from the tech. i suggest playing those two sectors if u are to play the market at all. transportation is also quite oversold and can get pulled down hard if the overall market continues showing weakness....good luck!
Monday, November 12, 2007
Simon: Good Days be Bad?
its one of the hardest things for people to understand, this concept of feeling like shit when every position on the portfolio gained. to everyone but the trader, it sounds purely like greed and bragging. but to the trader, its definitely something to be pissed off about. i definitely feel that way today.
i'll first explain by complaining about today's situation. market started off strong. well...fairly strong. seemed like a very short term bottomed might have formed. i felt this way going into the weekend and wanted much to sell 1/2 to 75% of my best performing positions on friday or on a gap up today. i decided to hold off selling on friday and instead decided that today would be good to take some profits, diversify, and take less risk in the portfolio. this is a new strategy for me that i have always preached is best for trading but never exercised...i want to sell into strength and let profits run with the other half or quarter position while looking for new trades elsewhere. all went well as i sold some position early in the day. then all of a sudden...towards the last 2 hours of trading, the market showed weakness especially in QQQQ and everything tanked. GOOG, VMW, FLR....great picks...some in my portfolio that should have been bought for puts or held if owned. so in the end...i made up my losses from the last few weeks but would have added another 10% to each of my portfolios if i had not touched anything today. i am trying to understand this lesson. in the end...i played it well...i have less risk...i still have a portion of my strongest assets, and good amount of cash to buy in more on a pullback or if new positions look good.
here is my situation...
VMW: bought, 3.86. sold, 8, last trade, 12.10 - difference of 4.10
FLR: bought, 7.06. sold 11.20, last trade, 13.70 - difference of 2.50
GRMN: bought, 8. sold, 6.3, last trade 7.80 - difference of 1.50
FXI: bought, 8.20, sold 6.20, last trade 9.92 - difference of 3.70
fuck!...if i was at school all day...profits would have been 11.80 more...$1180....horrible!
i'm mad and i'm pissed. i've always said that its worse to lose out on potential gains than to lose money in the market. i wanna get out there and make more money...i am kicking myself hard for selling so early...the trades were made for a day like today...it was handed to me and i was dumb enough not to take it...
new strategies to try to deal with the problem
1. buy in on a position before selling off an existing one.
2. for FXI, don't worry about volume...bid and ask is strong enough to make money
3. don't sell 75% of position. sell 50% if trade is still strong, which is most of them unless the overall market's trend is reversing.
4. when things are good...exploit it...at least wait til end of day to sell.
5. let it slide. be happy about having gains. thats the main goal anyway....mission accomplished...one day at a time
6. most importantly...look forward...look for the next big trade...so i will be even more pissed tomorrow...
"the market is like gambling to some...but to me, its a totally different monster. much crazier...much harder...and much more reliant on emotions. i give any consistently successful trader much respect."
note: i wanted to delete the numbers on this blog because i shouldn't think about it...its the past...future numbers are much more important...but i will leave it there..for moral reasons and for good bookkeeping..not so it can haunt and bother me forever...and into making bad trades...side note...one of the best things i ever did was stop making a journal of my wins and losses. keeping too close an eye on the past is bad...learn what u can and move on...
i'll first explain by complaining about today's situation. market started off strong. well...fairly strong. seemed like a very short term bottomed might have formed. i felt this way going into the weekend and wanted much to sell 1/2 to 75% of my best performing positions on friday or on a gap up today. i decided to hold off selling on friday and instead decided that today would be good to take some profits, diversify, and take less risk in the portfolio. this is a new strategy for me that i have always preached is best for trading but never exercised...i want to sell into strength and let profits run with the other half or quarter position while looking for new trades elsewhere. all went well as i sold some position early in the day. then all of a sudden...towards the last 2 hours of trading, the market showed weakness especially in QQQQ and everything tanked. GOOG, VMW, FLR....great picks...some in my portfolio that should have been bought for puts or held if owned. so in the end...i made up my losses from the last few weeks but would have added another 10% to each of my portfolios if i had not touched anything today. i am trying to understand this lesson. in the end...i played it well...i have less risk...i still have a portion of my strongest assets, and good amount of cash to buy in more on a pullback or if new positions look good.
here is my situation...
VMW: bought, 3.86. sold, 8, last trade, 12.10 - difference of 4.10
FLR: bought, 7.06. sold 11.20, last trade, 13.70 - difference of 2.50
GRMN: bought, 8. sold, 6.3, last trade 7.80 - difference of 1.50
FXI: bought, 8.20, sold 6.20, last trade 9.92 - difference of 3.70
fuck!...if i was at school all day...profits would have been 11.80 more...$1180....horrible!
i'm mad and i'm pissed. i've always said that its worse to lose out on potential gains than to lose money in the market. i wanna get out there and make more money...i am kicking myself hard for selling so early...the trades were made for a day like today...it was handed to me and i was dumb enough not to take it...
new strategies to try to deal with the problem
1. buy in on a position before selling off an existing one.
2. for FXI, don't worry about volume...bid and ask is strong enough to make money
3. don't sell 75% of position. sell 50% if trade is still strong, which is most of them unless the overall market's trend is reversing.
4. when things are good...exploit it...at least wait til end of day to sell.
5. let it slide. be happy about having gains. thats the main goal anyway....mission accomplished...one day at a time
6. most importantly...look forward...look for the next big trade...so i will be even more pissed tomorrow...
"the market is like gambling to some...but to me, its a totally different monster. much crazier...much harder...and much more reliant on emotions. i give any consistently successful trader much respect."
note: i wanted to delete the numbers on this blog because i shouldn't think about it...its the past...future numbers are much more important...but i will leave it there..for moral reasons and for good bookkeeping..not so it can haunt and bother me forever...and into making bad trades...side note...one of the best things i ever did was stop making a journal of my wins and losses. keeping too close an eye on the past is bad...learn what u can and move on...
Thursday, November 8, 2007
Rino: Market Outlook
What a day!
As much as I was tempted to switch my call positions earlier today, I held on, hoping for my read to be correct. Of course, the hindsight is always 20/20 so it's easier to come out and talk now. Nonetheless, with a confirmation tomorrow morning, I have high confidence in the pattern that I found in the market.
The retracement that started in the middle of October was reminiscent of the retracement that began in the middle of July. In fact, you can almost say that these two retracements are like twins because they resemble each other so much.
Taking the DJIA for example, back in July...
the first leg down - took 2 weeks; dropped 900pts
the second leg bounce - took 1 week; gained 550pts
the third leg down - took 1 week; dropped 1100pts; then a short term bottom was formed
entire retracement took 4 WEEKS & dropped by 1500pts
Now we turn to October...
the first leg down - took almost 2 weeks; dropped 800pts
the second leg bounce - took a little over 1 week; gained 550pts
the third leg down - took 1 week (marks TODAY); dropped 900 pts
entire retracement took 4 WEEKS & dropped by 1100pts
Now, for each leg, the retracement in Oct shows slightly more bullishness than the July counterpart. Add to this the formation of a candlestick with a long tail & small body that occurred today, which is also visible at the bottom in August. Lastly, the third leg took exactly 6 days before forming the bottom back in August. Today marked the 6th day from the start of this third leg down.
All in all, I am calling for a short term bottom here today. It is still a trading market so picking the right stocks will work regardless of whether it's a call or a put. However, I expect to watch the market rebound from here, and it'll be important to note whether this rise can take out the previous high on the last day of Oct. Failing to do so will provoke another massive drop.
Beyond that my guess is as good as yours. Hold onto your calls on the stocks that led the market. Alternative energy stocks, commodities, and big name techs are still good here for the call. One darkhorse could be the financials, most notably Goldman Sachs, to make a fast temporary rebound.
As much as I was tempted to switch my call positions earlier today, I held on, hoping for my read to be correct. Of course, the hindsight is always 20/20 so it's easier to come out and talk now. Nonetheless, with a confirmation tomorrow morning, I have high confidence in the pattern that I found in the market.
The retracement that started in the middle of October was reminiscent of the retracement that began in the middle of July. In fact, you can almost say that these two retracements are like twins because they resemble each other so much.
Taking the DJIA for example, back in July...
the first leg down - took 2 weeks; dropped 900pts
the second leg bounce - took 1 week; gained 550pts
the third leg down - took 1 week; dropped 1100pts; then a short term bottom was formed
entire retracement took 4 WEEKS & dropped by 1500pts
Now we turn to October...
the first leg down - took almost 2 weeks; dropped 800pts
the second leg bounce - took a little over 1 week; gained 550pts
the third leg down - took 1 week (marks TODAY); dropped 900 pts
entire retracement took 4 WEEKS & dropped by 1100pts
Now, for each leg, the retracement in Oct shows slightly more bullishness than the July counterpart. Add to this the formation of a candlestick with a long tail & small body that occurred today, which is also visible at the bottom in August. Lastly, the third leg took exactly 6 days before forming the bottom back in August. Today marked the 6th day from the start of this third leg down.
All in all, I am calling for a short term bottom here today. It is still a trading market so picking the right stocks will work regardless of whether it's a call or a put. However, I expect to watch the market rebound from here, and it'll be important to note whether this rise can take out the previous high on the last day of Oct. Failing to do so will provoke another massive drop.
Beyond that my guess is as good as yours. Hold onto your calls on the stocks that led the market. Alternative energy stocks, commodities, and big name techs are still good here for the call. One darkhorse could be the financials, most notably Goldman Sachs, to make a fast temporary rebound.
Simon: admitting fault
10 minutes before the market close and instead of having gains, i am taking fat losses. as i feared most, i bought in at the bottom of the day. the market, mainly financials have recovered strong from its lows. i should have held what i had and would have been happy now. today is a big lesson that shows that intraday trades are bad. only closing prices are worth marking on the technical charts. crazy wicked market. fuck fuck fuck! definitely best to wait for the last 30 minutes of the day to make trades. traders are too crazy.
Simon: Buyer Beware - Big Tech
Like i've been suspecting lately, i think that Tech (QQQQ) would be the laggard if a bear market is to come about and DIA would be the leaders if we are to have a bull market. Today we are seeing a bear market and a huge hit on the overvalued stocks in tech, most notably GOOG, RIMM, BIDU. these crazy stocks have resisted all the fears that were in the blue chips and small caps and now, all in one day, they get hammered. I've seen strong down moves like these before with a huge rebound the day after or even during the last hour of trading, but i am more sure of a downturn than before. i love the greed and total confidence the market and analysts have in the big tech. it means that the runup is so much into just emotions and speculation that these quick buyers will also be quick sellers. little support by those guys. if i am wrong about all this, i will be the first to admit my faults.
reasons for bearishness:
1. crazy expectations for earnings. in the past, stocks selloff when earnings are missed and shoot up when earnings hit or exceed. now, all stocks sell off whether earnings hit or miss. The only stocks that shoot up are the ones that blow all estimates away AND raise guidance for upcoming quarter.
2. rise and fall of chinese stocks. they have risen exponentially in the past several months and lately have started to form double tops and divergence. some highflyers like cbak, jrjc, and ldk have already lost much of their gains from the last quarter. another bad sign is china wanting to slow their economy by tightening of restrictions on foreign investments. this will slow growth for US companies.
3. as many have mentioned but many have ignored, interest rate cuts are only short term solutions. the market has to correct itself and interest rate cuts are just messing up charts and preventing the inevitable. it is time for the market to take a huge correction and figure itself out. bernanke is screwing up everything! he needs to place importance on the value of the dollar, not on the stock market.
as i write this, i wonder if i am just in fear, or am i totally realistic on my valuation and aggressive buying of PUTs. only the market knows and the truth will soon reveal itself. the downfall of stocks have recovered slightly at this moment and much of the bleeding of the huge names have stopped. we'll see if this is the quiet before the storm or a rallying of troops before a huge push to erase all of today's losses. i'm hoping for a storm.
reasons for bearishness:
1. crazy expectations for earnings. in the past, stocks selloff when earnings are missed and shoot up when earnings hit or exceed. now, all stocks sell off whether earnings hit or miss. The only stocks that shoot up are the ones that blow all estimates away AND raise guidance for upcoming quarter.
2. rise and fall of chinese stocks. they have risen exponentially in the past several months and lately have started to form double tops and divergence. some highflyers like cbak, jrjc, and ldk have already lost much of their gains from the last quarter. another bad sign is china wanting to slow their economy by tightening of restrictions on foreign investments. this will slow growth for US companies.
3. as many have mentioned but many have ignored, interest rate cuts are only short term solutions. the market has to correct itself and interest rate cuts are just messing up charts and preventing the inevitable. it is time for the market to take a huge correction and figure itself out. bernanke is screwing up everything! he needs to place importance on the value of the dollar, not on the stock market.
as i write this, i wonder if i am just in fear, or am i totally realistic on my valuation and aggressive buying of PUTs. only the market knows and the truth will soon reveal itself. the downfall of stocks have recovered slightly at this moment and much of the bleeding of the huge names have stopped. we'll see if this is the quiet before the storm or a rallying of troops before a huge push to erase all of today's losses. i'm hoping for a storm.
Simon: Market Outlook
The market is really tricky right now. Gone are the days where you can pick any strong stock and know that it would be going up. We have had a great run and things have finally become more unpredictable. We can no longer go through our list of stocks and find 90% of them pointing towards the same direction (which of late was also going with the market, up!)...as i look at my list of about 200 stocks, i see about 55% being bearish and 35% bullish and 10% trendless. I have never been in a situation like this before. It comes to me everyday that it really matters what we pick and we can't rely on the market to tell us which direction most of the stocks will move. I think i have been too spoiled of late to realize that this is how the stock market really is. it is not just going straight with the market at times. at times like this, a trader has to adapt to the market and see opportunity for stocks heading in either direction. it takes a certain skill to spot the ones who will run or run down despite the message of the market. It is a time where stops and getting in after confirmation is crucial. at volatile times this these, it is seriously costly to predict tops and bottoms. we need confirmation and one eye on the stock at all times. be careful and have fun out there!
and for the record: i am slightly more bearish than bullish about the next 1/2 month to month because an increasing amount of the stocks on my list are forming diverging oscillators or double tops.
KEEP YOUR EYES on the PRIZE!
and for the record: i am slightly more bearish than bullish about the next 1/2 month to month because an increasing amount of the stocks on my list are forming diverging oscillators or double tops.
KEEP YOUR EYES on the PRIZE!
Monday, November 5, 2007
Friday, November 2, 2007
Thursday, November 1, 2007
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