Irrationally mad decision making to obtain the American Dream.

Good news! no no no Bad news! WTF? Surprise open, revised practice trading

So I have to admit today’s open when I opened Yahoo! Finance was just a big slap to the face to me. Everything showed the market was going to open lower and then on Tuesday across the board stocks make a big fat white candle moving up the first 3-4 hours of the day creating a doji evening star breaking the 10 day trend, raising or following up the daily trend, and keeping the weekly in motion. By the end of the day, the last 3 hours, stocks seemed to slowly fall and retrace back below the bollinger bands and the Dow Jones falls hard after oil goes over $100/bbl. It just shows you can’t predict what is going to happen and if you can’t predict or at least come to a sensible conclusion to make trades off of how can I make a trade even last longer then 1 day without forming some type of loss if it doesn’t go my way? This is mine boggling to a trader like me who is trying to write a better trading system (at least on paper). Currently stocks, at least energy – oil, are steadily moving up from January through Feburary 2008. It’s a shock. Shouldn’t stocks still be falling?

Walmart earnings – were they really THAT good? This my view of Walmart and its profits and revenues it discounted all its products meaning small margin for profit and sure more revenues, but not much increase in cash profits coming in. So why did the market take Walmarts news as the best thing ever and raise the entire market up just to get punched back by oil?

Commodities – duh! Of course prices are going up in all commodities because HELLO move over USA now China and India are taking over in major growth and need things to build, eat, and live a higher standard quality of life. I don’t see commodities as a good thing going up because the more expensive prices go up the less consumers are willing to spend and sooner or later since demand will be less in the US companies will shift most of their business to faster growing countries such as China and India.

So, yeah, wtf? My SWN 55 MAR PUT has been hammered. Am I out? No. Why? Personally something smells fishy in the markets and for the most part when oil moves high actually energy stocks first initially fall a lot with the market then move back up (because it makes them generate more profits of course creating bigger margins). So I’m not out. Yes, all my charts are showing the stock moving higher, does this make me a moron for not selling? Maybe. I also think this could be a big reverse where a stock jumps higher but then falls harder the following days. I don’t need a miracle, I just need the markets to make up their mind realize the economy does suck and fall as they should.

Nutri System earnings – wow! I guess it’s a good thing I forgot because I was too busy to watch the stock and put in a CALL option trade on NTRI earnings. The stock “beat” analyst estimates but shouted fear and panic saying “falling profits, lowering outlook 2008” which made the stock fall -30% after hours. This would have been a most disasterous trade. So thank you God for taking my mind off trading since I already knew SWN moved up +5% (bad news for a PUT option). NTRI peg is at .39!!!! But now with a second falling profit outlooks it feels good to play PUTS on it because this stock now with full-blown negative press and no good outlook should fall even more making it an easy short PUT option trade.

Practice Trading Plan – recently doing over 100 practice paper trades a day on 8 different industry has become more of a fun task it has become a JOB, a full-time job clearly. I’m struggling to keep up while also doing my military job and my college classes at HPU. Clearly I need to paper trade less and focus more on just a few stocks. Basically my old plan was practice trading 8 different industries a day and following them a week. Each day I’d do 8 new stocks within the same industries, but it builds up quickly to a stack high pile of papers. I feel I’m not gaining any new widsom from this even though I thought doing more practice trading work on the same 8 industries would help me spot trends and better trades quicker. I think if I did trading full-time I could easily do this why watching the market for the entire day, but I basically give trading 30 minutes to 2 hours a day which is my time limit. I have to figure out my trades after the market closes. Such as today I watched SWN move up 1pt to 2pts to 3pts. This could of been an acceptable real trade if I could have traded it intraday, but I’m working.
I have no excuses so my practice trading plans need to be revised to a better system. Okay I’ve got it. I’ll stick with my 8 different industries but only do those 8 trades a week so instead of around 240-400 trades a month (practice) I will focus extremely hard and consistent on only 32. My goal was to follow day movement to see if a stock moves down or up statistically more on one day then another going Monday to Monday. Then I can review and see how the stock moved throughout the trading week to see if I can find any patterns I could use to trade the stock with a better chance of it moving my way the following day to be sold out quicker.

-fn

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4 responses

  1. This big open up was due to the rally in Europe on Monday. At that point NASDAQ futures were up 33 points. On Tuesday they started falling back when Europe opened down. Europe again strengthened through the session but the NQ never got back to 33 points up. The whole European rally was total BS so there was no reason for the market to be up (I think a rescue for the monolines was more likely behind it rather than the nationalization of Northern Rock or Barclays supposedly raising their dividend?! – when Barclays results were released they weren’t good). I went short the SPY shortly after the open as my models are short.

    February 20, 2008 at 4:35 am

  2. PS also bought 12.5 Mar BZH puts (DEEP ITM) and am short LAZ too.

    February 20, 2008 at 4:36 am

  3. Had nothing to do with Walmart of course.

    February 20, 2008 at 4:37 am

  4. well HELLO moom! don’t you think we could team up so this doesn’t happen again?

    you know I saw NO major headlines on european rally for monday. i just saw major headlines today for first walmart, the oil spike, then HPQ earnings. well at least I know my fishy hunch that this was a big jump for no reason isn’t fully BS.

    if you read i’m revising my practice trades. just too many and i’m just not focusing or gaining what i thought i’d gain. so i’m going back to just a few and focus more heavily just on those stocks against then trying to watch 8 stocks in the same sector per day following the industry.

    chao – fn

    February 20, 2008 at 6:19 am

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