Wednesday, August 15, 2007

Aug 15 $2,100 on 109c




Traded a little bit larger size. Made my money on the open and close, and did some churning during the afternoon. Again, no trading for me in the last half hour due to my past trading results. Expecting some crazy action, or a lot of chop these next 2 days with option exp. on Friday.

P/L= $2,100 on 109c

Market analysis-
The ZN and ES inverse relationship showed up big time today at 1:30pm EST. I came back to trade around 2:30pm and caught some of the move down, unfortunately I didn't hold long enough based on the rule that as long as the NYSE A/D is trending, you stay in the position through the noise. The last couple days has been difficult in the placement of stops and adding to positions, but what I'm seeing is breakouts, chop, fake breakouts, chop, breakout, that type of trading action, which means wider stops need to be used, adding to positions must be done on pullbacks as opposed to adding on breakouts, and profits need to be taken on volatility spikes.

If some of you are having trouble shorting and are only looking for things moving up, then maybe you should trade bonds for awhile or turn your stock charts upside down.

No one has really talked about this, but it needs to be brought up. We hear about all the hedge funds losing money, but there are a couple hedge funds that bet the market was going to tank and that everything related to the word "subprime" would tank too. What hedge funds are the ones that bet right and made 200-300% gains in the last month? You don't hear CNBC talking about the short bias hedge funds that are making a ton of money, all you hear are people talking about, "when is the right time to buy?" and "are we having a correction?" and "what is the deal with interest rates?".
Lets talk about the hedge funds that are killing it in the markets,,,no wait, then their strategies wouldn't work anymore,,,OK,,,alright then, lets do the exact opposite of whatever all those losing hedge funds are doing. Are the loser hedge funds cutting some equity positions to pay off defaulted loans? Warren Buffet is buying, should I too? Why would I buy US equities when our interest rates and economy are nowhere near as good as China's. If I were an investor, I would probably be buying China and everything related to China, and shorting the US. If I had to buy US stocks I would be buying value big cap stocks and selling growth small cap stocks because of the way interest rates are and the fact that small cap growth is likely to under perform because they won't be able borrow money and expand there "growing" business, while big caps can just sell some of there stock to raise money and continue to survive even in the current bearish environment. Whatever the case, I like the volatility and volume.

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