Thursday, January 10, 2008
These Things Happen
For the most part, my defensive action in the face of yesterday's rally was the right move (everything covered trades higher this morning). The exception? BKS. Must say I was not pleased to see it open down 9%, having covered it. After the big gap lower it traded back up and tested support from below ($32)- which is where I re-entered the trade. That's working nicely but I still missed the bulk of the move (2 pts. on 400 sh.= $800 left on the table).
Wednesday, January 9, 2008
Bears Sacked, Fumble, Bulls Recover
We rallied (on the DOW) from 12,500 to 12,735. In under two hours. Closed up 146 pts. Damn. Now that's the kind of rally I've been expecting. This is it, the big set-up. My expectation (and projecting the indexes is not my game) is that the DOW trades to 13K. Bottom to top- 500 pts. Point is: we go higher.
It doesn't really make much difference to me how high it trades. I got out of the way. To be specific, I was 3%+ (for the second day in a row) this afternoon when the rally began. Two hours later I had given every single cent back. As bad a taste as that leaves, the important thing is that I gave back TODAY'S profit not yesterday's profit or last year's profit. Really should have went long an index right away to hedge but did not do so.
Still expect that my account will be under attack just because I have a bearish bias, but I have no intention of standing on the train tracks net short just to get ran over. Just because I'm stubborn or something. Nope. I closed my beloved, recently doubled down BKS position (and a bunch of other shorts). My broker makes a bunch of money off of me and I should get better service.
The idea is flexibility. Especially on the short side where I'm quicker to take a profit. The longer you sit there telling yourself you're right while losing money the bigger the mistake becomes. When you go to cash you can think clearly. Maybe you were rightly positioned to begin with, in which case you can always re-enter.
Those who do not have the possibility (inevitability) of being wrong built in to their plan are losers.
I've been a loser before. It sucks.
My emotion is indignation. Don't fuck with me Mister Market. I'm keeping my profits.
Today the enemy brought significant reinforcements to a battle I was winning convincingly. My portfolio is a small force of like 50 insurgents, half of which have guns, mostly small sidearms. The shoes on our feet are worn through or made of leather. Our uniforms are disheveled and we're sleeping bivouacked in the mountains. We run when overwhelmed because we want to live to fight another day. Not die in a last stand.
Tonight I've got a ton of cash. Net long. Within a sneeze of my best month ever. Time to trim the account and pay myself a bonus. No time for a vacation though, I'm plotting my next attack.
It doesn't really make much difference to me how high it trades. I got out of the way. To be specific, I was 3%+ (for the second day in a row) this afternoon when the rally began. Two hours later I had given every single cent back. As bad a taste as that leaves, the important thing is that I gave back TODAY'S profit not yesterday's profit or last year's profit. Really should have went long an index right away to hedge but did not do so.
Still expect that my account will be under attack just because I have a bearish bias, but I have no intention of standing on the train tracks net short just to get ran over. Just because I'm stubborn or something. Nope. I closed my beloved, recently doubled down BKS position (and a bunch of other shorts). My broker makes a bunch of money off of me and I should get better service.
The idea is flexibility. Especially on the short side where I'm quicker to take a profit. The longer you sit there telling yourself you're right while losing money the bigger the mistake becomes. When you go to cash you can think clearly. Maybe you were rightly positioned to begin with, in which case you can always re-enter.
Those who do not have the possibility (inevitability) of being wrong built in to their plan are losers.
I've been a loser before. It sucks.
My emotion is indignation. Don't fuck with me Mister Market. I'm keeping my profits.
Today the enemy brought significant reinforcements to a battle I was winning convincingly. My portfolio is a small force of like 50 insurgents, half of which have guns, mostly small sidearms. The shoes on our feet are worn through or made of leather. Our uniforms are disheveled and we're sleeping bivouacked in the mountains. We run when overwhelmed because we want to live to fight another day. Not die in a last stand.
Tonight I've got a ton of cash. Net long. Within a sneeze of my best month ever. Time to trim the account and pay myself a bonus. No time for a vacation though, I'm plotting my next attack.
One Idea a Long Time in Coming
Here is one I'm watching: BKS.
In a recession who the hell is going to be spending money on books?
Whatever. The fundamental analysis is totally inconsequential to me. What I see here is a ton of support just below where this issue is currently trading. I'm anticipating a breakdown. Along those lines I just doubled my short position (one which is already nicely profitable).
To be clear, should support hold I'll be long gone. In the meantime I'm willing to risk the profits I already have on an idea I've been waiting a long time to develop.
In a recession who the hell is going to be spending money on books?
Whatever. The fundamental analysis is totally inconsequential to me. What I see here is a ton of support just below where this issue is currently trading. I'm anticipating a breakdown. Along those lines I just doubled my short position (one which is already nicely profitable).
To be clear, should support hold I'll be long gone. In the meantime I'm willing to risk the profits I already have on an idea I've been waiting a long time to develop.
Late Christmas Present
The day after Christmas I shorted ATI @ $88.98.
Covered it this morning @ $73.98.
That's 15 points in 10 trading sessions! Whether it trades lower from here (likely) or not is now irrelevant to me. I have declared victory.
Early Mornin' Stoned Pimp
Net short. Market averages higher across the board (up a hundy at one point as measured by the DOW). Yet I'm up again. Odd, no?
Believe it or not my longs are doing the heavy lifting today. GENZ is breaking out- as I said it would. My small RAI position is up 3% and the metals are looking to turn positive after spending the morning in the red.
My shorts are also contributing despite the green hue. YHOO which I aggressively shorted within a half hour of claiming to respect the bounce (as I said here yesterday) is down another 3%. YHOO is making new lows and remains on borrowed time as far as I'm concerned.
My expectation is for a choppy market here as the bears become increasing emboldened and the bulls try harder to deny reality (recession, bear market). Additionally earnings season is just kicking off and the market will react to the vagaries of earnings season. No time to be a hero. Took down a few insanely profitable shorts just to bank some profits and remain flexible.
If I were to be a hero, which I already stated will not be the case, I would short the living hell out of the dog they call YHOO.
Believe it or not my longs are doing the heavy lifting today. GENZ is breaking out- as I said it would. My small RAI position is up 3% and the metals are looking to turn positive after spending the morning in the red.
My shorts are also contributing despite the green hue. YHOO which I aggressively shorted within a half hour of claiming to respect the bounce (as I said here yesterday) is down another 3%. YHOO is making new lows and remains on borrowed time as far as I'm concerned.
My expectation is for a choppy market here as the bears become increasing emboldened and the bulls try harder to deny reality (recession, bear market). Additionally earnings season is just kicking off and the market will react to the vagaries of earnings season. No time to be a hero. Took down a few insanely profitable shorts just to bank some profits and remain flexible.
If I were to be a hero, which I already stated will not be the case, I would short the living hell out of the dog they call YHOO.
Tuesday, January 8, 2008
'Subprime' Named Word of the Year
Forgot to mention yesterday that linguists as represented by the American Dialect Society have named 'subprime' as the word of the year for 2007. Link.
In 2008 the word of the year will be 'litigation'. Ha.
Runner-Up: 'change'. But we hear that every four years.
In 2008 the word of the year will be 'litigation'. Ha.
Runner-Up: 'change'. But we hear that every four years.
Welcome to Your 2008 Bear Market
So much for the bounce. That lasted all of a day and a half before the bulls were utterly annihilated.
It's safe to assume that every index has broken convincingly through key support. Welcome to your 2008 bear market. For anyone not paying attention, we are already in a recession. Not technically, but if you were to use real inflation numbers instead of the government's bullshit numbers we have been in a recession for awhile now.
Ofcourse, having made so much so fast on the short side I'm wracked with anxiety. The bounce I allowed for off of the lows can now be expected to take place from a lower level. My expectation is that at some point probably soon we will test the key support levels from below. A failure at that point (should it play out that way) could present the shorting opportunity of a lifetime. No exaggeration.
My advice to you (again). Take cover.
It's safe to assume that every index has broken convincingly through key support. Welcome to your 2008 bear market. For anyone not paying attention, we are already in a recession. Not technically, but if you were to use real inflation numbers instead of the government's bullshit numbers we have been in a recession for awhile now.
Ofcourse, having made so much so fast on the short side I'm wracked with anxiety. The bounce I allowed for off of the lows can now be expected to take place from a lower level. My expectation is that at some point probably soon we will test the key support levels from below. A failure at that point (should it play out that way) could present the shorting opportunity of a lifetime. No exaggeration.
My advice to you (again). Take cover.
Treading Water
Not afraid of this bounce (nor a believer in it) but I'm going to respect it. I have exited a couple short positions just to be safe. Frankly, this bounce seems weak but these are key levels we are flirting with and there is nothing more dangerous than a wounded bull. Live to fight another day. I've had an incredible run and don't plan on giving anything back.
Today is another profitable day (thus far). Closed out my CROX position this morning at $28 and change. Somewhat disappointed initially as it had traded lower but now with it bouncing back over $30, well, I'm OK with it. I'd like to short that dog again but have other ideas more appealing for now. Hope to revisit it.
There are opportunities to be had now. However I will play it a bit safe. I'm not going into bunker mentality as in December after a fast start but I will operate primarily to preserve profits in the short run. If January does not continue my winning streak I will have done something drastically wrong.
Today is another profitable day (thus far). Closed out my CROX position this morning at $28 and change. Somewhat disappointed initially as it had traded lower but now with it bouncing back over $30, well, I'm OK with it. I'd like to short that dog again but have other ideas more appealing for now. Hope to revisit it.
There are opportunities to be had now. However I will play it a bit safe. I'm not going into bunker mentality as in December after a fast start but I will operate primarily to preserve profits in the short run. If January does not continue my winning streak I will have done something drastically wrong.
Countrywide on Thin Ice
Apparently CFC was halted shortly after 1pm est so they could deny rumors of impending bankruptcy.
A Short I Should Have Stuck with Longer
CFC is down almost 18% today and now has a six handle. Ouch. Pull up a chart of that one.
Under Attack
Big picture: we are literally perched on the precipice. This market has no margin for error here. A couple bad news items and we are going over the edge. With earnings season coming up we'll have no lack of news. The outlook for the upcoming year will be what market participants are listening for. How good can the outlook really be?
In the meantime this is the bulls last chance to turn this thing around. We are now bouncing for the second day in a row. Today is a bit more convincing than yesterday.
I am net short again. Haven't done much this morning other than give some profits back. I've trimmed a bit but I'm trying to hang in there. Although if this market is going higher short term I will be forced to take cover. Hesitating to do so is a mistake I cannot afford. The profits I've made are mine and I will not give them back.
Let's see what the bulls can muster.
In the meantime this is the bulls last chance to turn this thing around. We are now bouncing for the second day in a row. Today is a bit more convincing than yesterday.
I am net short again. Haven't done much this morning other than give some profits back. I've trimmed a bit but I'm trying to hang in there. Although if this market is going higher short term I will be forced to take cover. Hesitating to do so is a mistake I cannot afford. The profits I've made are mine and I will not give them back.
Let's see what the bulls can muster.
Monday, January 7, 2008
Damn Those Shoes Are UGLY
Sticking with my CROX short despite the fact it closed down a hefty five bucks on Friday has worked out pretty good. I covered half of my smallish position this morning at $30/share- for a profit of ten plus points. The other half has traded as low as $27 and change this morning. At the lowest point down another five bucks on the day. It has bounced some since. At this point a bounce would be nice. Thereby allowing me too short this dog again.
The market as a whole opened strong this morning- and I was up. The market coughed up it's gains- and I was up even more. Really hoping for a bounce since I'm now underexposed to the short side but I do have dry powder.
The market as a whole opened strong this morning- and I was up. The market coughed up it's gains- and I was up even more. Really hoping for a bounce since I'm now underexposed to the short side but I do have dry powder.
Sunday, January 6, 2008
Longest Watchlist Ever
My watchlist for this week is 264 stocks. Jeez. That's a lot. If there are opportunities to be found I'm going to dig them up.
Going through the master list I noticed many opportunities missed owed to the fact that I didn't quite have enough capital to short 150 different stocks. That's alright. There are new opportunities every week and I will get mine.
Overall I'm pleased to see many opportunities still exist here and now. Just not near as many as before the mauling of last week. Still plenty of names yet to break support.
One to watch? YHOO. Looking for this perennial dog to take out support so I can get involved with an old name which has been good to me in the past.
Tech generally has just started to work on the short side. Many tech names are just now breaking down as the market realizes the idea that you can hide out in tech during a recession is pure fantasy.
Going through the master list I noticed many opportunities missed owed to the fact that I didn't quite have enough capital to short 150 different stocks. That's alright. There are new opportunities every week and I will get mine.
Overall I'm pleased to see many opportunities still exist here and now. Just not near as many as before the mauling of last week. Still plenty of names yet to break support.
One to watch? YHOO. Looking for this perennial dog to take out support so I can get involved with an old name which has been good to me in the past.
Tech generally has just started to work on the short side. Many tech names are just now breaking down as the market realizes the idea that you can hide out in tech during a recession is pure fantasy.
Late Night Musings
To quickly recap Friday: the bulls got mauled.
As a bear I'm figuring that the eventual bounce will be extremely violent in nature. Worthwhile to keep that in mind to prevent yourself from getting too aggressive on the short side. Ultimately this market is headed lower. No surprise on my part.
The first three days of 08 have almost been too good to me. Huh? Well I have that sinking feeling that I'm about to be severely corrected. Call it a conditioned response. Make a bunch and give a bunch back. Growing in fits and starts is my trading history. But I've had the sinking nervous feeling over and over for months yet have not crashed.
Halfway through my weekend homework I see fewer opportunities than in previous weeks. Serious damage has been done and many names no longer offer favorable entry points. Naturally every idea I didn't play last week worked beautifully. Fully invested there was not much I could do to initiate new positions. Close something just to move it to something else is a matter of getting too cute.
Profits have been booked. Capital has been raised.
Again I left money on the table by downsizing my commercial real estate shorts modestly towards the end of last week. It's instructive to point out mistakes and such as the purpose of this blog is to continue to grow as a trader.
Back to work. Carry on.
NOTE: CROX closed Friday down five bucks.
As a bear I'm figuring that the eventual bounce will be extremely violent in nature. Worthwhile to keep that in mind to prevent yourself from getting too aggressive on the short side. Ultimately this market is headed lower. No surprise on my part.
The first three days of 08 have almost been too good to me. Huh? Well I have that sinking feeling that I'm about to be severely corrected. Call it a conditioned response. Make a bunch and give a bunch back. Growing in fits and starts is my trading history. But I've had the sinking nervous feeling over and over for months yet have not crashed.
Halfway through my weekend homework I see fewer opportunities than in previous weeks. Serious damage has been done and many names no longer offer favorable entry points. Naturally every idea I didn't play last week worked beautifully. Fully invested there was not much I could do to initiate new positions. Close something just to move it to something else is a matter of getting too cute.
Profits have been booked. Capital has been raised.
Again I left money on the table by downsizing my commercial real estate shorts modestly towards the end of last week. It's instructive to point out mistakes and such as the purpose of this blog is to continue to grow as a trader.
Back to work. Carry on.
NOTE: CROX closed Friday down five bucks.
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