Shine - Momentum Trader

The EURO strength play showed up again this morning after China said, over the weekend, that it would loosen the Yuan’s peg to the U.S. dollar and allow it to become more flexible. FXI, up 5%, and BIDU, up 4%, along with metals and miners, led the indices higher to start the day. A sell-the-gap-up-and-short-on-rallies thesis became the prominent play for the day. I personally shorted some gold names on the 1^st sign of sector rotation out of the precious metals. Also I recognized the weakness in some Nasdaq names like GOOG and NFLX, shorting some NFLX as high as $124.72 and sticking to a short thesis on that name for the day, for a gross profit of $553 in the name.

I uncharacteristically sold some naked PUTS this morning on a gap up, when I usually short them towards the bottom for better pricing. I covered most of them by midday for a small loss, but I will be on the hunt for some good spots for PUT selling. I bought some puts and sold some calls on AUY (both a long bet) for a small profit.

SHINE OUT

I accomplished my trading goal today not only on a PNL level but in a control aspect. On Monday after a busy weekend a trader can come in too aggressive and try to take out more money than the market wants to give. Bad idea!!! Motto: “The market will give what it wants to and not a penny more”. I give the example of the many traders I’ve seen try to reach the goal of  +$1000 being up $950 and end the day only up +600(a terrible risk reward!!).

My control today allowed for me to stay small until I saw a trade developing in SNDK to the long side. Using small size (300-1200 shares) I used my sniper skills to buy pull-ins and sell rallies. Even in a small range on the stock I was able to gross +583 with very little risk to the downside. I posted my trades on the Hedgefundlive.com website and received some positive feedback from our member community which is inspiring. Again being controlled I sat on my hands till the close where I grossed another $200 to pay for dinner.

SHINE ON

The market is trading with an eerie tone from a momentum perspective. Stocks seem too cheap to short at these levels, and if you go long or try to bid bottoms we seem to be forming new lower lows daily.  I still believe that, in order to start heading higher, we need a whoosh down, and then we can start building a foundation to begin squeezing the shorts. An orderly sell off is no recipe for a V-bottom.  Individual stocks are approaching or violating support  levels not seen since 2008/09, which creates more selling and margin calls. It also feels like there is some negative news still lurking on the horizon.  Could it be a European default (sovereign or bank), contagion to other regions, or the annihilation of BP/RIG?

On a positive note, it’s beginning to feel like sentiment is building heavily to the short side, where the crowds usually get proven wrong.

SHINE ON

Today was not my type of trading day being a slow bleed up, but this was the 1st real day towards a bull market confirmation. I look for 2 more positive days where we grind higher lure the shorts in and get them running for the hills on a sqeeze. Also we were up today on basically no news, at some point the news tides will turn to positive and when they do we should be off to the races. I did add to some of my naked put selling and also sold a calander put spread today for the 1st time here at hedgefund live.
Shine on!!

In review, today was choppier then I expected with not much follow through to either direction in the stocks I was trading (STP, ERTS, AMR, IMAX). Today was the type of day where many names reverted back to their mean or VWOP. Rallies in these names needed to be shorted when they looked like they will break out to upside and bought when they looked like they were going out of business.
I had 3 positions that had large potential, but traded them amateurishly instead of with my usual aggressive prowess. 3300 ERTS that I covered flat instead of making a quick 15 cents, 1500 IMAX that I covered early taking in $150 instead of$500+, and long DLM that I took 5 cents out of instead of half a buck!!!! Frustrating!!! The worst part about it is that I did not use critical information contributed by my colleges at TFG Trading Matrix which would have assisted me in staying in my position and getting PAID!! I will get comfortable.

There will be another fight and I will be ready!!! Will you!!!