I dropped C on thursday thinking that it had run its course. It did make it into the 29$ range for a stint but dropped back to the 28's. I dumped it at 28.72, picking up some profit. It gained another dollar on friday so my dumping time wasn't optimal, but it wasn't far off either.
Now I'm taking the short side of the financials with 100 shares of SKF, which I purchased today despite E*TRADE's insistance on ruining me: I put in a limit order for 94 when it was trading at 94.02. No execution. I up the limit order to 94.4 when it's at 94.42, still no execution. I switch to market order and continue to click refresh while I wait for it to execute. Nothing. The stock rises to 96! Still no execution, so I decide to cancel the order. It tells me it cannot be cancelled. So at 95.9 the order executes. Let this blog be the ultimate criticism of this horrible trading system.
Anyway, the bet basically boils down to the fact that we've so far had a pretty shitty rally. There hasn't been any significant volume outside of MSFT and YHOO, but the upswing was a considerable percentage. I made over 10% on my citigroup trade, and it wasn't optimal as I said.
I think the position is speculative: I want to be there shoul there be a big crash. Getting in a few minutes later (or, worse still, just sitting on the button trying to execute and ETRADE rebuffing my advances), would significantly reduce my profit. The risk? I don't see a massive intraday rally anytime soon. All of my sources, including Jim Cramer, the most foolishly bullish of them all, say we're due for at least a few more 300 point corrections. Each one of those days could be worth a thousand dollars. Each day of hovering around is +/- 100, so I don't need to worry much about them.
Monday, February 4, 2008
Wednesday, January 30, 2008
Ambac, MBIA sink the market
The rate cut worked better than I could have ever hoped: Citigroup up 4% on the day, topping 29$ a share, and a profit for me over 650$. But that only lasted for a few minutes before Fitch slashed the rating of FGIC off of AAA. This cascaded into Ambac and MBIA, as usual, and then bled into the financials and wiped out the day's gain on Citi.
C'est la vie. I didn't have a desire to sell because of the aforementioned dividend concern, and I also couldn't time a bottom for the simple reason: NO NEWS!
As I said in the last post I'd be a much better trader if I had better tools. The market started to tank and I figured it was just a part of the usual volatility: sure I might give up some gains, but that's expected. A clear downward slope until the bell: that's caused by news. I looked through Bloomberg and Yahoo but couldn't find anything. The stories weren't published until after the bell. How can I deal with this lack of complete information?
That said, I'm not looking forward to tomorrow. I predict that the bears are finally going to take over and I'll be out a job until zecco gets rolling.
C'est la vie. I didn't have a desire to sell because of the aforementioned dividend concern, and I also couldn't time a bottom for the simple reason: NO NEWS!
As I said in the last post I'd be a much better trader if I had better tools. The market started to tank and I figured it was just a part of the usual volatility: sure I might give up some gains, but that's expected. A clear downward slope until the bell: that's caused by news. I looked through Bloomberg and Yahoo but couldn't find anything. The stories weren't published until after the bell. How can I deal with this lack of complete information?
That said, I'm not looking forward to tomorrow. I predict that the bears are finally going to take over and I'll be out a job until zecco gets rolling.
Fed cuts rate 50 bp
After 3 days of exceptionally low volume, the fed finally made their announcement. The wait was a real nail biter, but as expected the target rate was cut 50 bp to 3.00. In fact, to hedge against a deficient cut I put in a stop order for 27.15 on C, enough to cover my transaction costs. Knowing E*TRADE's brokerage system, though, it probably would've executed at 26.23 anyway. I maintain that I would be a much better trader if I had better tools.
In fact, I like that the MauiTrader said that he never placed an order during the day. He only acts when not under pressure and after careful consideration. In fact, he doesn't call himself a trader, but rather an investor. I don't give much of a shit about these distinctions.
As for Citigroup, its stock has about a 2% gain on the day plus the dividend gets assigned today. At .32, that leaves me with an extra 64$ profit. Also read, so long as the stock won't drop 32 cents, stay long at least until tomorrow.
This trade has netted me over 500$ so far (and has been about a week long), and is not bad for my long-only penalty box. However, I wouldn't say I had any exceptional strategy beneath it:
1) I felt especially down at 22 that Citigroup, no matter how badly it has performed, was completely undervalued. If they clean up their act properly, the stock should be worth at least 40, if not back to its usual value of 60.
2) The massive bear slide we underwent in the beginning of this month generated an imminent oversold rally. I never had much sympathy for this rally (and honestly I think it will peter out in the next few days, if not by the end of today), but I need to play somewhere.
I would like to sell this position very soon. I'd hate to give up the extra hundred bucks tomorrow (as I've observed, the standard intraday vol), but I'm not sure how dividends get assigned, so I'll leave my position on until then.
I still can't short so I'll probably be out of ideas for a little while.
In fact, I like that the MauiTrader said that he never placed an order during the day. He only acts when not under pressure and after careful consideration. In fact, he doesn't call himself a trader, but rather an investor. I don't give much of a shit about these distinctions.
As for Citigroup, its stock has about a 2% gain on the day plus the dividend gets assigned today. At .32, that leaves me with an extra 64$ profit. Also read, so long as the stock won't drop 32 cents, stay long at least until tomorrow.
This trade has netted me over 500$ so far (and has been about a week long), and is not bad for my long-only penalty box. However, I wouldn't say I had any exceptional strategy beneath it:
1) I felt especially down at 22 that Citigroup, no matter how badly it has performed, was completely undervalued. If they clean up their act properly, the stock should be worth at least 40, if not back to its usual value of 60.
2) The massive bear slide we underwent in the beginning of this month generated an imminent oversold rally. I never had much sympathy for this rally (and honestly I think it will peter out in the next few days, if not by the end of today), but I need to play somewhere.
I would like to sell this position very soon. I'd hate to give up the extra hundred bucks tomorrow (as I've observed, the standard intraday vol), but I'm not sure how dividends get assigned, so I'll leave my position on until then.
I still can't short so I'll probably be out of ideas for a little while.
Thursday, January 24, 2008
Sticking with it
I decided to let my C position roll overnight, rather than locking in the next 50$ profit. 50 isn't very much and given my transactions costs it would be a huge disincentive to get back in.
Anyway, it seems that I was also rolling the dice on the earnings announcements of MSFT and CAT. MSFT came in ahead of estimates despite the fact that Vista is well-regarded as a piece of crap. Maybe I should look at the conference call transcript directly to see where their earnings are coming from, if not Vista. It is Microsoft, of course, who has more essential business products than any other tech firm.
CAT I know nothing about except that it would reflect the strength of the argricultural economy. They have large international dealings, so may not be so strongly affected by US recession. Right now I'm trying to figure out how essential knowledge of companies like this one is to trading. Certainly as regards Citigroup it may not have a big impact, but clearly the whole market moves in tandem and this is a Dow Industrial.
In other announcements E*TRADE, the worst performing stock of the S&P 500, reported a loss of $1.7 Billion, par for financials exposed to subprime. One can only wonder how well ETFC would be faring today if they'd stuck to being a brokerage. Probably similar to AMTD: only suffering a large loss in the swoon of Jan 08.
Anyway, it seems that I was also rolling the dice on the earnings announcements of MSFT and CAT. MSFT came in ahead of estimates despite the fact that Vista is well-regarded as a piece of crap. Maybe I should look at the conference call transcript directly to see where their earnings are coming from, if not Vista. It is Microsoft, of course, who has more essential business products than any other tech firm.
CAT I know nothing about except that it would reflect the strength of the argricultural economy. They have large international dealings, so may not be so strongly affected by US recession. Right now I'm trying to figure out how essential knowledge of companies like this one is to trading. Certainly as regards Citigroup it may not have a big impact, but clearly the whole market moves in tandem and this is a Dow Industrial.
In other announcements E*TRADE, the worst performing stock of the S&P 500, reported a loss of $1.7 Billion, par for financials exposed to subprime. One can only wonder how well ETFC would be faring today if they'd stuck to being a brokerage. Probably similar to AMTD: only suffering a large loss in the swoon of Jan 08.
Reversing my decision: 26$
I hate E*TRADE for that. It's just impossible to think on the fly with such a huge transaction cost looming over my head.
I decided that the market had already priced in this house price drop, and that the bulls really really want this to be an up day. Two up days in a row and we have ourselves a weeklong trade. That would also get me the C dividend, so I'm back into the position, having lost 26$ in transaction costs and perhaps 20$ in spread. Not too bad.
I decided that the market had already priced in this house price drop, and that the bulls really really want this to be an up day. Two up days in a row and we have ourselves a weeklong trade. That would also get me the C dividend, so I'm back into the position, having lost 26$ in transaction costs and perhaps 20$ in spread. Not too bad.
Bearish on housing news
I dumped the C position at a not quite optimal time, locking in about a 300$ profit. I was hoping to be less of a day trader for once with Citigroup, but one thing really got to me:
It looks like the kind of extended rally we're hoping for is one that Always starts with a two day rally, what the MauiTrader calls the follow-through. I could've imagined this follow-through happening, especially with our open, until the news came out that home prices declined for the first time in 40 years. This kind of problem would certainly hurt the economy in general and the financial sector in particular.
However, I think that I'm not in a good position to guage the impact of this news. Since it's come out 37 minutes ago, the market has bumbled around flat, and C has traded within a dime of my sell point. There's a good chance that this news has already been priced in, and that pretty much nothing can stop the bull from charging over the next few days.
It looks like the kind of extended rally we're hoping for is one that Always starts with a two day rally, what the MauiTrader calls the follow-through. I could've imagined this follow-through happening, especially with our open, until the news came out that home prices declined for the first time in 40 years. This kind of problem would certainly hurt the economy in general and the financial sector in particular.
However, I think that I'm not in a good position to guage the impact of this news. Since it's come out 37 minutes ago, the market has bumbled around flat, and C has traded within a dime of my sell point. There's a good chance that this news has already been priced in, and that pretty much nothing can stop the bull from charging over the next few days.
Wednesday, January 23, 2008
Citigroup, Dow swing up
To my surprise, the C trade generated a profit very quickly. After a bit of a swoon after my original purchase, the Dow managed to turn a 1.5% loss into a 2% gain on the day, implying about 250$ unrealized profit on Citigroup.
I'm caught in a decision of whether or not to take the money and run. This is definitely more luck than should be expected from such a trade. I was hoping for pretty much flat over the next week, maybe a little appreciation. At its best, C was up 10% on the day.
Two pieces of advice to conflict with:
1) Jim Cramer said that when he bought a stock for a dividend, and then bailed, he missed out on a whole lot of profit and security when the stock further accelerated and upped their dividend. So DON'T DROP those kinds of stocks!
2) There is hardly a pundit out there who says that we're not in for a long haul recession, and I've believed it myself for a while. But the MauiTrader says cover the shorts for the next little while. No matter what you say, a 6-day loss is a lot, even if we are in recession. We're due for a pop.
The dividend will never equal such a profit-- 250$. Not for a very long time and by then I'll be back to day trading. But what position would I likely put on tomorrow? Can I dump the stock premarket if things start to slide? Will I completely rue the loss of 200 bucks for sitting on this stock?
That's a problem with this trade: I had no goal in mind for profit. I think I'll sit on it for now, regroup by tomorrow.
I'm caught in a decision of whether or not to take the money and run. This is definitely more luck than should be expected from such a trade. I was hoping for pretty much flat over the next week, maybe a little appreciation. At its best, C was up 10% on the day.
Two pieces of advice to conflict with:
1) Jim Cramer said that when he bought a stock for a dividend, and then bailed, he missed out on a whole lot of profit and security when the stock further accelerated and upped their dividend. So DON'T DROP those kinds of stocks!
2) There is hardly a pundit out there who says that we're not in for a long haul recession, and I've believed it myself for a while. But the MauiTrader says cover the shorts for the next little while. No matter what you say, a 6-day loss is a lot, even if we are in recession. We're due for a pop.
The dividend will never equal such a profit-- 250$. Not for a very long time and by then I'll be back to day trading. But what position would I likely put on tomorrow? Can I dump the stock premarket if things start to slide? Will I completely rue the loss of 200 bucks for sitting on this stock?
That's a problem with this trade: I had no goal in mind for profit. I think I'll sit on it for now, regroup by tomorrow.
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