I have learned it is better to wish I was in the right side of the trade than to wish to get out of a losing trade. I did not short the market yesterday, so I miss the morning collapse. I missed a PCLN gap down. I miss making probably the largest profit I could make for the year. Yet I an fine considering I am not losing money, excluding retirement account.
Housing data has not come out yet, but negative sentiment is too heavy to make me bullish. Hopefully the housing data can turn the market. Yet the market does not care about hope.
Showing posts with label PCLN. Show all posts
Showing posts with label PCLN. Show all posts
Tuesday, August 24, 2010
Thursday, August 19, 2010
Day Trading
Timing a day trade is very crucial. For the past two weeks I have missed to big drops in the indices and I just cannot get over it. Knowing how fragile the market is right now I came really close to scoring big but due to bad timing in trades I missed out on most of the downward drops. On August 10 I was unable to participate on the short side of the SPX due to going all in on a PCLN short. I made a decent profit and will leave it at that. Just two days ago I went short the NDX via purchase of put spreads but sold them on the same day of purchase because I did not want to lose a four figure profit. Of course if I had held them all to the end of today I would have raked in 7 times the four figure profit I took. Man it almost hurts as much as losing money in a trade.
My touch on the markets' moves are getting better. However I should be very cautious now considering I have been unscaved the past two weeks. I guess preseving capital is much better than winning big in the market. Although if the market is ready for a third drop in the next week I hope I will be in it shorting.
From stocktwits commentors and my own technical analysis the market seems to be ready to fall again. The sentiment on Wall Street seems to be very pessemistic which is why I do not want to just go short the market. Yet if I have to put a number in I would expect the SPX to drop to 1060 before a bounce. I hope tomorrow we have an up day so I can plan on shorting it but if we hit 1060 first I have missed the next big drop. 1050 and 1020 are other support lines but I need to do a little more research before diving in with shorts. Pun intended.
To help myself become a better day trader I have linked a stocktwitter by the name of blackmart. I have been reading through blackmarkt's blog and found his entries on day trading very insightful. He lists all his trades at the end of the day and shows his gains and losses. Furthermore he talks about the periods of trading during the day that I think every type of trader should read. It talks about the 9:30 to 4:00 period of day trading.
http://blackmarkt.blogspot.com/2010/03/daytrading-time-zones.html
My touch on the markets' moves are getting better. However I should be very cautious now considering I have been unscaved the past two weeks. I guess preseving capital is much better than winning big in the market. Although if the market is ready for a third drop in the next week I hope I will be in it shorting.
From stocktwits commentors and my own technical analysis the market seems to be ready to fall again. The sentiment on Wall Street seems to be very pessemistic which is why I do not want to just go short the market. Yet if I have to put a number in I would expect the SPX to drop to 1060 before a bounce. I hope tomorrow we have an up day so I can plan on shorting it but if we hit 1060 first I have missed the next big drop. 1050 and 1020 are other support lines but I need to do a little more research before diving in with shorts. Pun intended.
To help myself become a better day trader I have linked a stocktwitter by the name of blackmart. I have been reading through blackmarkt's blog and found his entries on day trading very insightful. He lists all his trades at the end of the day and shows his gains and losses. Furthermore he talks about the periods of trading during the day that I think every type of trader should read. It talks about the 9:30 to 4:00 period of day trading.
http://blackmarkt.blogspot.com/2010/03/daytrading-time-zones.html
Wednesday, August 18, 2010
Short PCLN...
After reading my last Friday's post I realize how far off I was in predicting the market. The SPX is at 1096 as I write this. Yet I am betting the index will not hit 1100 by the end of tomorrow. Crossing my fingers.
Also today I took on an early short vertical spread of PCLN. I sold a Aug 310/320 spread around the open and that was when PCLN went up, way up! It reached over $309 around noon. Yet as time progressed the stock begins dropping and is now below $298. I should be more patient with the price movement but I am comfortable for the option to expire at the end of Friday.
My reasons for believing that the stock would have trouble hitting through $310 are as follows:
1) Sentiment for the day seemed more neutral than directional. Since yesterday's big rally the market I assume would more likely consolidate then to move up again. This would be a bullish sign for the market overall. Hence I assume PCLN would not go up by much for then next 2 trading sessions.
2) The PCLN 50MA crossed over the 200MA. Being contrarian I saw it as bearish and expected more likely that PCLN will stall out.
3) The MACD has been neutral to slightly lower after 2 weeks but prices has moved up at least 20 points since. A sign of over priced in stock value.
Today I feel I got lucky with PCLN's outcome but wished I held my cash a little longer before go short. If I had held from short for about 3hours I would have doubled my unrealized profit today. Then again at noon time the market did not seem to be a good time to go short.
Also today I took on an early short vertical spread of PCLN. I sold a Aug 310/320 spread around the open and that was when PCLN went up, way up! It reached over $309 around noon. Yet as time progressed the stock begins dropping and is now below $298. I should be more patient with the price movement but I am comfortable for the option to expire at the end of Friday.
My reasons for believing that the stock would have trouble hitting through $310 are as follows:
1) Sentiment for the day seemed more neutral than directional. Since yesterday's big rally the market I assume would more likely consolidate then to move up again. This would be a bullish sign for the market overall. Hence I assume PCLN would not go up by much for then next 2 trading sessions.
2) The PCLN 50MA crossed over the 200MA. Being contrarian I saw it as bearish and expected more likely that PCLN will stall out.
3) The MACD has been neutral to slightly lower after 2 weeks but prices has moved up at least 20 points since. A sign of over priced in stock value.
Today I feel I got lucky with PCLN's outcome but wished I held my cash a little longer before go short. If I had held from short for about 3hours I would have doubled my unrealized profit today. Then again at noon time the market did not seem to be a good time to go short.
Friday, August 13, 2010
Almost time to go all in...
This past week I missed on a great opportunity to buy puts in SPX weekly. Yet I still manage a profit for the overall week with a short on PCLN. From all the frustration I have been through with the market I am happy with any type of profit. Now to my anticipation of what to look ahead in the markets.
The "flight to safety" has intensify the past week and the first chart shows how bullish the dollar is. As of Friday the sentiment in Europe's ability to pay its debts is again in doubt the dollar is strengthening against the Euro. It is interesting to note that since early July the dollar index UUP has been declining until last week while the SPX 500 index has been stuck in a range since the UUP decline. I would have though with a weaker dollar the equity market would increase, but that is not the case here. I sign that there is weakest in the SPX.
Next chart is the volatility index. There are many very good blogs out there that can go further into the good and bad of volatility indices, but the reason I wanted to post the VIX is because it is becoming very bullish. As shown in chart below the VIX was able to use the 200MA as support at around 23 and it just made contact with the 50MA resistance around 26.7 last Thursday. The sentiment from traders have been more pessimistic than previous weeks. Rightful so to be pessimistic at this point due to the fundametals both on a mirco and marco stand point being negative relative to investors' expectations. For instance Cisco profit estimates for future quarters were lower than expected. First time unemployment claims are going up again and ISM data has been dropping in recent months. The mood on wall street is more uncertain, which can very well lead to VIX spikes. With greater volatility there is better chance for market to move in significant direction, and presently after this week it seems the market wants to move down.
The bond market is just amazing! Yields are at there lowest since pre-Lehman collapse. The yields seem to only want to go down even more and the bond market illustrates that. For instance TLT is rising and it just broke the 102 resistance today. With a flight to safety mentality around the market TLT if can hold above 102 it can go up further. With money going into bonds it would mean then that equity market will have a void. That is another reason to consider why I think the overall equity market will go down further very soon.
I have read through a lot of blogs past few hours and many are anticipating of a quick bounce before further drop in the overall markets. Any bounce here could be significant so rather than playing the short side I will wait for confirmation. My confirmation will come by the end of Monday where if the market stays flat or positive I will sit out, while if it ends in negative territory I would sell vertical OTM calls of the SPX. My values would probably be at 1100. I think there will be a bounce to 1100 but fail to get above it.
The "flight to safety" has intensify the past week and the first chart shows how bullish the dollar is. As of Friday the sentiment in Europe's ability to pay its debts is again in doubt the dollar is strengthening against the Euro. It is interesting to note that since early July the dollar index UUP has been declining until last week while the SPX 500 index has been stuck in a range since the UUP decline. I would have though with a weaker dollar the equity market would increase, but that is not the case here. I sign that there is weakest in the SPX.
Next chart is the volatility index. There are many very good blogs out there that can go further into the good and bad of volatility indices, but the reason I wanted to post the VIX is because it is becoming very bullish. As shown in chart below the VIX was able to use the 200MA as support at around 23 and it just made contact with the 50MA resistance around 26.7 last Thursday. The sentiment from traders have been more pessimistic than previous weeks. Rightful so to be pessimistic at this point due to the fundametals both on a mirco and marco stand point being negative relative to investors' expectations. For instance Cisco profit estimates for future quarters were lower than expected. First time unemployment claims are going up again and ISM data has been dropping in recent months. The mood on wall street is more uncertain, which can very well lead to VIX spikes. With greater volatility there is better chance for market to move in significant direction, and presently after this week it seems the market wants to move down.
The bond market is just amazing! Yields are at there lowest since pre-Lehman collapse. The yields seem to only want to go down even more and the bond market illustrates that. For instance TLT is rising and it just broke the 102 resistance today. With a flight to safety mentality around the market TLT if can hold above 102 it can go up further. With money going into bonds it would mean then that equity market will have a void. That is another reason to consider why I think the overall equity market will go down further very soon.
The final chart of this post shows how SPX for the week fail to break through 1130 and fail to hold support at 1100. 1100 was just cut through like butter even though there were over 100,000+ calls/puts at that level. I would have assumed that buyers would have at least try to defend the 1100 instead of letting it fail so quickly. This goes to show that SPX is weak at the moment.
I have read through a lot of blogs past few hours and many are anticipating of a quick bounce before further drop in the overall markets. Any bounce here could be significant so rather than playing the short side I will wait for confirmation. My confirmation will come by the end of Monday where if the market stays flat or positive I will sit out, while if it ends in negative territory I would sell vertical OTM calls of the SPX. My values would probably be at 1100. I think there will be a bounce to 1100 but fail to get above it.
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