Thursday, September 30, 2010

A few recent trades

OK. So Bob Lang got us out of ADBE for a decent 40% win just before they released earnings and took a nose dive...Thanks Bob.

So far in the Month of September every single trade Bob Lang has posted as part of the Grand Slam service has been a winner however slight or large....He hasn't posted many new trades and currently we are holding some HAL, QLGC, and NVDA calls.

Headley's Sniper service hasn't been as lucky with a few loser like SNDK but overall these services have pumped the accounts decently.

Just 2 days ago I fired off a trade on some MCP calls based on a retest...well the retest kept going. It caused some serious pain as it broke through some major technical stops (CCI 0 test was about the only thing that held on the hourly)...on the daily thought it was a bend don't break scenario....well my money management stops had also been triggered and I was in meetings all day so I took a loss bigger than my normal loss...this was hard because that bottom level held and of course it has been rallying ever since.

So big loss was taken and there isn't much to say about it except it was a tough trade, I almost toughed it out and at the very least I didn't panic at the bottom.

I put my order in for a higher price waiting for a rebound in the selling...bought them at $5.50 sold'em for $3...this sucks...but that's the way it is. I had to exit based on my rules...

In this case I should have put some trade triggers in but that would still result in a sizable loss....anyway the accounts all suffered about 2.5% losses on this one...or grand total of $2250 loss.

Trade: Long F...winner

I put in a trade trigger during my time in Paris for this to get out at $1.70...this was because these were weeklies and I didn't want to be in them for a long time and the market has been choppy.

Across all the accounts this was about $1,000 winner as the trigger was fired on the 21st of September...not bad for 5 days.

Not much per account but overall it was a good trade.


In my scans today I picked up a high volume rise in F...The uniqueness of this move is seen on the hourly (and even the daily) chart. The volume was big today in Ford and the bollingers on the hourly chart had gotten really tight and in sinc with the accel bands I watched the 15 minute chart after the breakout to see if I could get a retest to get in. I watched it come towards the 13 EMA and bounce and while there wasn't a true retest at that stage, I figured it was decent enough to get in at that point.

So I played the weekly options expiring next week (issued today). Picked up the Sep 24th $11 calls for $1.50 each.

Unfortunately I had a meeting and couldn't wait for a true retest...which did happen just after I left my desk...(of course) so I probably missed out on a dime here...but that's the breaks when you have a stupid day job.

A decent target for this is the 80 period daily upper bollinger band...if it is launching it could hit that by next week...that stands at 13.40...So from my purchase price it will probably net me $1 per contract...66% winner wouldn't be bad at all.





Trades: Short EEP and PCG...both losers

30 SEP-10:
OK enough laziness..I need to update this blog not just for y'all but for myself.

I gotta say that since I turned over most of the trading to the good people at Big Trends...I have gotten lazier about this blog...

Anyway EEP was a looser. my stop was triggered on September 20th for $2.00 per contract. This was an $0.80 per contract loss. Fairly painful. But EEP kept going higher and I was right to put that trade trigger in during my travels.

Both of these had tripped technical stop points well before I got out of them. In EEP's case I got out soon after the technical stop was

PCG I just got out of today for $4.60 each. For a minor loss of 0.90 per contract (fewer contracts than EEP that's what makes it minor). Across all accounts this was a $630 loss. Easy to bear.

Now I held PCG because when it broke the technical stops on the intraday never closed the gap on the daily chart, and it never confirmed closing over the 13 day EMA...Also there was a big dividend coming so I knew that once that came through we would have a patience led me to hold on until the loss was really miniscule.

EEP Daily

PCG Daily

I have been trolling for shorts in case the 1130 area holds on the SPX as the top of the range (again). Also being net long is a bit nerve racking, especially as we are headed into resistance and we are a bit overbought.

Anyway EEP and PCG both fit the bill, both had heavy volume downside moves recently, and today both were retesting on %R at the hourly level.

I picked up October $55 puts in EEP for $2.80 each.

I picked up October $50 puts in PCG for $5.50 each.

Both had decent open interest and good bid/ask spreads...not super duper great...but good enough to trade for sure.






Sunday, September 26, 2010

Back from Paris

Ok so Paris went well...I had one really long day of walking around and taking pictures (you can view them here). I accomplished most of the goals with the exception of Monte Martre and finishing the books. I got a little headway in Think and Get Rich...but alas, Babies, Iron Man 2, The Departed and sleeping all took precedent on the plane.

Anyway...I had a decently successful week trading...I got stopped out of EEP, but took profits on F, NOV, ADBE. Also entered some new positions that came through the pipe from Big Trends...anyway not bad and in this case being 6 hours ahead of the market was helpful since I could actually concentrate on work and still put trades in the early afternoon.

What I am saying is that it would be great to move to Europe and trade the US markets...

Anyway I will try to update some of the trades posts that I have done last week but its a busy weekend and I am also getting over a cold that I caught in Paris. C'est la vie.

Saturday, September 18, 2010

Off to Paris

So...Thanks to my real job I am going to Paris for the week...I have a lot of open positions on and I am hoping that I can manage them all from my Blackberry in Paris.

Nonetheless...I think I will be placing emergency stops and profit taking triggers to let the computers take over the trading while I am there...being 6 hours ahead of NYSE time doesn't really help if you wind up working through most of the morning's action...I experienced this once before when I went to Lisbon for work...and had open positions...I made stupid maneuvers on a RIG spread back then...

Anyway...this is my first time in Paris and I am excited about that. What I want to accomplish is fairly simple, take some great photos and see the Eifel Tower, Notre Dame, the Louvre, Montmartre, and le Quartier Latin...I also want to eat like 5 Croissant's per day and drink massive quantities of wine, not to mention eat eat eat every single meal I can until my belly explodes.

I also plan on finishing 2 books on the plane ride (unless I am tempted by the movies on board)...Think and Grow Rich by Napoleon Hill and Flow by some God awful name impossible to reproduce.

Wanted to share the following link regarding the market...I hope Moby Waller is right...but apparently there was a tremendous amount of open interest in Sep 113, 114, 115 SPY calls...he claims that all this worthless paper frees up the market to actually break through the 1130 mark...I hope he's right...but Friday was awful volume for an S&P rebalancing/Quad witching end of Quarter day....we didn't even trade 2 Bil was on track to be the worse quad witching volume day ever...

Anyway also...this has been making its way through the internets...but go read Micheal Lewis' Greek thing in Vanity Fair...its a gem and it will unfortunately enlighten you that Greece will end in tragedy..

Wednesday, September 15, 2010

Trade: Long OPEN...winner

15-SEP-10: true trader mentality I decided it was time to get rid of OPEN and take my profits...Sold the contracts today for $9.00 a piece...a profit of $250 per contract....accross all the accounts (9 contracts) that's a profit of $2250..that's more than my wife makes in a month so I am happy with that...I think that's probably a new goal of make enough on one trade to cover my wife's salary.

This wasn't a homerun but it was a good double... but I have very little faith in this rally at this stage and traders take their profits when they can...OPEN may very well keep running but I am at peace with that. I am trying to think more like a trader and less like an investor...there are multiple opportunities just like OPEN that happen everyday...So I will get on board those and get off board just as quickly.

Decided to enter into a long today despite the market being near the top of its recent range. Some stocks are simply not giving up the goose or (as in OPEN's case) looking like giving up the goose then finding support at key levels and demonstrating retests.

OPEN has been on my side radar for a while because it consistently appears on IBD's Stocks on the Move. While I have missed the ride until this point, today's gap and subsequent sell-off offered a nice opportunity for entry on a very short term basis today.

Today OPEN popped out of the bollinger bands and followed through by confirming in the 2nd hour of trading. Then the fade began and that took us until about 2PM. The hourly chart was showing a %R retest and the 15 minute chart was showing a DMI kiss in the making along with a CCI retest.

I checked this out with more scrutiny because I noticed that the options in the 50-60 strike range had high open interest and the bid/asks were decently tight...also the chart of the option itself was showing a retest on %R as well...

I then watched the action in the underlying itself as it neared the bottom of the day's action...the bid/ask spread was very wide and no business was transacting...within a few minutes they came together and the stock put in a fat green bar on the 15 minute chart.

I pulled the trigger at that point on the October $55 calls for $6.50 each...

A decent target is around $8.80 which is where these options traded earlier today prior to pulling back.



15 minute:


October $55 Call 1hr chart:

Thursday, September 9, 2010

General update

So I signed up for some Big Trends services including the Grand Slam Options and the Options Sniper. GS is handled by Bob Lang, and OS is handled by Price Headley. They take different approaches. I am still figuring out Bob Lang's approach but he is incredibly basic in his approach. He uses RSI, MACD, Volume, %R, Bollinger Bands and MAs...Most on standard settings...but he does fire a lot of trades much so that I can't keep up with it all on the blog if I am to trade all these things.

The Sniper service takes an approach based on multiple time frames but mainly the hourly chart to come up with signals etc. However, I have noticed that he deviates from his own "plan" relatively often. I see many stops that simply get ignored, or I see stops not get violated and then him putting out exit orders anyway.

I guess I should blog on these trades if I can because in the end I have a subscription to these services for 3 months. If I decide to go for the whole year they will have to pay for it with trades. So far Bob is doing a better job in this rally than Price...but it's just a matter of luck, they can't both be trading the same stuff and some trades are going to work out some are not...Price has just been on the not working out side. C'est la vie.

Nonetheless I wanted to explain the lack of blog entries lately, I have been trading a lot with these guys just not documenting the trades all on the blog.

I am going to try to get better at that, but because these guys provide nightly emails with the summary of their thinking and include charts most of the time...its a bit superfluous to blog about it.

This is my journal to document trades first and foremost, so if that is done in emails from Bob and Price then I don't need to do it here.

Perhaps the approach I will take is to post when I think they have deviated from the plan. This is easier to do with Price than with Bob because Price is straight forward about what his plan is based on, but I will get to the bottom of Bob's brain as well.

Anyway that's it. I also decided that I am reading a lot of shitty economics lately so get ready for some economic jibberish from me in between all this trading.


UPDATE Trade: Short CVD Equity...winner

Exited this position fully today just based on time in trade, and the need to free up capital for other opportunities, this thing hasn't moved much up or down but the 4hr has started to perk up on the 13 that's good enough for me. Covered the 100 shares I had left for $39.

So let's see that's a total profit of $450...not a bad trade for a 1 month holding...still too long for such a "small" profit.

4hr chart:

Trade trigger fired this morning with the rapid drop in CVD. This is now a free trade! Covered 100 shares for $39.68 this morning. Current Cost Basis is now $40.63. It is nice to not worry about loosing money anymore and to also have more buying power free.

Went short 200 shares of CVD in the taxable account. Got filled at $41.59 per share. Stop is $43.41.

This has a massive move down already but it is officially an outside the band retest as of today.

I needed some short exposure and there isn't very much these days that isn't beat up to a pulp. CVD has terrible ratings and is in a terrible group. So I figure despite the move down, there may be further to fall for this puppy.

As always, I hope I am right. But I expect to be wrong.




Tuesday, September 7, 2010

Trade: Long ARST...loser

I actually exited this position on Friday. After beating earnings ARST didn't go anywhere and got taken down a bit. In any case, my stop was taken out right at the beginning of the day and I had to leave the position. $200 loss.

1hr chart:

I put on a really small position (1 contract Sep $32.5 call for $6.10) in ARST yesterday afternoon...This was based on the recent spike in ARST which came on massive volume. Also all hourly signals fired that fabled day.

ARST reports today after the close which they will divulge details of them putting themselves on the auction block. I am not happy with the open interest in the options at this strike but the delta etc lead me to choose this one.

Anyway it was near the CCI retest low when I picked it up and it is holding that low...

Let's see what happens:



Friday, September 3, 2010

Update Trade: BKC Long Calls...loser

I wanted to put down my thoughts on this one more time. You may or may not have looked at this chart since I left this trade (but I will post it after this update anyway).

Remember, I entered this trade for various reasons, but the primary reason was that there had been a massive spike in options volume in the October $20 strike that continued over a few days as the underlying got faded. It had matched technical indicators on the hourly chart.

My main mistake on this was probably my choice of trade. The technicals deteriorated rather quickly and i followed my discipline and exited for a small loss. This was prudent for the next few days...and discipline is discipline.

However, what I should have done is go right along with the whale that was picking up these options in the first place. I shoudl have simply defined my risk differently. Instead of getting a higher delta position and stopping myself out if it reached my risk comfort level. I should have simply picked up the out of the money strike calls and put up money I was willing to loose and then just forget about it.

So instead of buying 10 contracts in the 90 delta strike for $1.15...I could have 1. waited for CCI retest, 2. gone with the October $20 strikes paid about 0.60 each contract and bought only 3 or 4 contracts as a "lottery ticket." Simply said..if this whale is right...then I get to ride with him. If he is wrong...then I loose what I would have lost anyway...

I for one will start looking for these types of scenarios a little more closely...the setup here was fairly clear...very high volume in the underlying accompanied by very high volume in the out of the money options.

Anyway here is a chart to enable me to make a shitload of money the next time I see a similar situation...or at the very least...loose the same amount of money.

There are few things more painful than watching a great call fullfill its prophecy WITHOUT being on board and imagining the money you would have made if you were...this is an incredible lesson in matching strategy to the situation and matching risk to reward...but just matching the risk is important enough..

Every trade should begin with the same statement "I am willing to loose X on this trade" I have various ways of making this loss occur and you should always find the way that matches the risk and maximizes the reward at the same time as leaving you in the trade....stay with the trade in this case was more important than the technical breakdown in the stock....because the whales were telegraphing the potential of a takeover...and they were giving you the basic price...If the whale was willing to spend a shitload of money on a strike that was way out of the money...even if it came close to $20 he would profit handsomely.

Anyway its a wonder that the SEC doesn't investigate these types of shenanigans...this was blatantly obvious that someone knew something about this LBO. 

Painful Chart:

This morning BKC violated a retest on CCI. I exited for 0.95 per contract or a loss of 20 cents...$200...I am being very aggressive on defense here on a long that will probably work out...but the market is not really happy looking right now and longs are really hard to justify being in. BKC has a long term down trend in place and fighting that is tough to do.

Anyway I should have waited a little longer to get into this in the first place. Instead of %R retest...I should have waited for a CCI retest. One flaw on this was that DMI difference never went above 30 so that move on Tuesday wasn't confirmed on DMI that may have been the thing that should have kept me away. I let the news about the high options volume cloud my judgment on this one...that whale buying calls in October has a longer term time horizon and a lot more money than he wins...

17.25 was support now it is resistance so that's that...had i waited until this morning to enter I would probably still be in this trade and that is a lesson I will probably end up learning with this one...patience and waiting for that CCI retest is the lesson here...when trading the hourly that's what I needed to do.


As per last night's post, I noticed that BKC had triggered a buy signal on the hourly...I didn't really look at the news until this morning...from flyonthewall:
Burger King is recently up 44c to $17.33 . BKC October 20 calls have traded 234 times on contract volume of 20,620 contracts, above its open interest of 15,300 contracts. October calls are trading at 50c above its theoretical value of 18c according to Track Data , suggesting traders paying expensive prices on the expectations of an upside move.

Indeed, and the action continues this morning...this time in the September $20 strikes.

Anyway...I waited for a %R retest and got in to the October $17.5 for $1.15 each 10 contracts...Let's see what this whale wants to do with this company.

I am busy with charts later.

Wednesday, September 1, 2010

Trade: Long XOM...winner

Got the order to get rid of XOM this morning prior to the open and set an order for selling at $2.75...that turned out to be premature as it traded much higher...the order to sell from Extreme was based on yesterdays crappy action in the 15 minute chart...but in hindsight...not sure i want to be placing orders like this right at the open...silly....anyway nothing to write home about 15 cents per contract total $75 profit...

In Extreme today got the signal to open a long position in XOM with the September $27.50 calls. Got in at a cost basis of $2.60 each. For the most part I have 5 contracts...However, I messed up the IRA amount and I wound up with 15 contracts...I may have to cut out on this one before receiving the exit instructions as it is too much of a position to have on...and even the boys at Big Trends are wrong on a few trades.

This is a weak trade already XOM sold off the rest of the day. The only bright spot is that it is barely holding 50 on the hourly %R, and volume was weak today.