Archive for July 2008

Is It Really That Bad?

Jul 31st, 2008 | By | Category: General Comments
Yesterday, ELN and WYE were massacred, by Wall Street standards, because of a drug that was being developed for Alzheimer's disease and failed in phase II trials. The experimental drug was said to "only help half of patients and was linked with a brain-swelling side effect" by (You can read more about it here: In the aftermath, ELN was hit over 40% to below $20 and WYE absorbed a little over a 10% loss. And looking at those numbers now, I clearly recall during the trading day today how one of the companies released a statement reassuring Read more [...]

The Right Stocks

Jul 29th, 2008 | By | Category: Steven Spencer (Steve's) Blogs, Trading Theory
You are only as good as the stocks you trade. Let me repeat this. You are only as good as the stocks you trade! This is a major point of emphasis on our desk. It is taught to trainees during their first week of training. And stressed on a regular basis to all traders at SMB. It is the reason why we have an AM Meeting to discuss the stocks "In Play". As all experienced traders know, stocks that are In Play offer superior risk/reward (the basic reason why is discussed below). In this morning's AM Meeting I told our traders that today was about the financials. More specifically, it was about MER. MER had issued a secondary Read more [...]

Just Trade

Jul 29th, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
There was a bunch of chatter on our desk before the Close about a dead market. DQ, a solid young trader, was complaining, "The energy stocks stopped moving. They don't move that well after 2:30. Nothing is movin." I remarked, "So take a look at some of the financials, young fella." MER was sitting there at 25, bobbing and weaving above and below 25. The XLF couldn't break 20.80. It looked like it might be a slow summer Close. And then pop! The XLF traded strongly above 20.80 and MER started to climb above 25. It was like guarding that great shooter who always roams the perimeter and then out of nowhere takes it to the basket. Read more [...]


Jul 29th, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Scalping is an important trading technique for new traders to learn. Yesterday was a great example for why. But let me take a step back. Every so often we get a cocky young student who strides into my office and asks direct questions. The last young such kid started with, "do you just teach scalping?" A perfectly legitimate question. But it was the way he asked the question. He asked as if scalping was beneath him, a way of making money that was in some way inferior. Oh to be young again. And I said, "no, but we scalp when a trade calls for a scalp." Yesterday there was not a whole lot going on compared to last week. AMGN had some Read more [...]

Fire Sale Prices on CROX

Jul 27th, 2008 | By | Category: Fundamental Plays, Gilbert Mendez's (Gman's) Blogs, Technical Plays
I have to start off by saying that I do own a pair of crocs. I don't wear them very often out in the city but when out on vacation I sport those bad boys out. Yes, they are very comfortable and oh boy are they some ugly-looking shoes. But hey, I will give up fashion over comfort on any vacation day. Sorry ladies! I have a very vivid memory of the held offer I saw when CROX finally reported some bad numbers. I remember ARCA at 57.50 sold about 10 million shares after hours. I mean seriously, the stock gapped down from the 74s down to high 50s and the ARCA seller would not lift the offer to save his life. Boy was this guy right! Here Read more [...]

Managing Your Profitable Position

Jul 26th, 2008 | By | Category: General Comments, Gilbert Mendez's (Gman's) Blogs
During the fourth of July weekend I wrote about oil being ridiculously overpriced (see the blog entry here:Wicked oil). Over the next 2-3 sessions after blogging about it, oil sold off hard ($144 to the low $130s) but it didn't necessary top off the way I had expected. It was a good sign but I did not have confirmation for me to get short, so I waited. A few days later (7/11) oil futures rallied back up to those highs, tried to break out and failed misserably. A failed breakout at the ridiculous highs was enough for me to put in a couple of small trades. I placed smalls shorts on CHK, HK, USO and oil futures. So here we are Read more [...]

SMB Training Program Recognized

Jul 25th, 2008 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Well today was a proud day for me and my partner.  Dr. Steenbarger, one of the top three trading coaches in the country, wrote a very nice blog about our training program (  Steve, GMan and I worked very hard to develop our training program and it is a great honor to be mentioned by Dr. Steenbarger.  On our desk I always describe Dr. Steenbarger as the Coach K of trading coaches.  And as one of our talented new traders emailed in response to Dr. Steenbarger's comments: "It is a great time to be a trader."  I hope you enjoy the blog.    Read more [...]

AM Meeting Summary

Jul 25th, 2008 | By | Category: General Comments, Steven Spencer (Steve's) Blogs
CHK--Support 48/48.30 Resistance 49.60. FNM--Support 11.80 Resistance 12.60. XTO--Resistance 49.20 Support 48.  WDC--Support 30. WFR--Support 42 Resistance 44. QCOM--Support 51.70 Resistance 54. WM--Big Seller at 4.04 yesterday. Followup (11:15AM): When FNM failed to break above 12.60 we shorted and covered in front of the 11.80 support.  When the support dropped we traded it on the short side again for another $1.50.  Currently we are long as we believe a bottom was put in at the 10.50 level.  First resistance 11.50. Some traders caught the break of 30 on WDC.  CHK briefly dropped the 48 support but immediately popped Read more [...]