April, 2009 | SMB Capital - Day Trading Blog

MS: A Great Second Day Play

The theme of the day is the "Second Day Play". Jtoma talked about it on Fast Money and now I will review the best Second Day Play from today. Yesterday, MS released earnings and traded in a 2 point range for the day between 22.50 and 24.50. MS was behaving relatively weaker than the market yesterday afternoon. When the market rallied it had trouble getting above 23.50. After trading down to 23 it had trouble trading above 23.30. These signals pointed to a weak close and a possible short for the following day. I decided if it closed below 23 that I would hold a small short position overnight and trade it with a short bias today. My trading plan was simple. If MS failed to Read more [...]

Tags: day trading, easy plays, MS, smb capital Posted in Steven Spencer (Steve's) Blogs, Trading Theory | No Comments »

SMB on CNBC’s Fast Money Tonight

Apr 23rd, 2009 | By ajames | Category: General Comments, Jeff Tomasulo's Blogs

Our very own Jeff Tomasulo, senior trader at SMB Capital, will be a guest on CNBC's Fast Money tonight from 5-6pm. Jeff will discuss Second Day Plays, sharing how to successfully trade second day earnings plays. Jeff has been trading professionally for over thirteen years. We hope you catch Jeff on CNBC. Please feel free to ask him follow up questions about his appearance by leaving comments on this blog. Best of luck with your trading! Don't forget to follow us on twitter. Read more [...]

Tags: prop trading, smb capital, trading blog Posted in General Comments, Jeff Tomasulo's Blogs | 8 comments

Why do you trade?

Apr 22nd, 2009 | By smbcapital | Category: General Comments

Why do you trade? I ask this question to myself constantly. There are many reasons. I think you have to ask yourself this before you set goals, while you are setting new ones and while you are trying to accomplish previously set goals. Let me tell you how I set my goals. I look at my trading career as a three step process. The first step is to learn how stocks trade and move intra-day. During this process just learn and survive. This is because you are at an enormous disadvantage while trading against the other players in the market. During this time I have seen many different trading days and trading plays. Although, I know I have much more to learn I have developed a system and style that I Read more [...]

Tags: prop trading, smb capital, trading blog Posted in General Comments | 4 comments

IBM Pattern

Apr 21st, 2009 | By Bella | Category: Mike Bellafiore's (Bella's) Blogs

I did not identify the pattern in IBM today until near the Close. This soured my trading results. The pattern in IBM today was to create a support level, hold that level with significant volume, trade higher from this support level, then drop, hold a level lower, and then explosively trade higher. Basically IBM would not explode higher until its support level dropped. I took rips on two of these drops. But then I made an adjustment. Let's discuss. IBM 101.50 held, traded up to 101.90 a bunch of times. I bought 101.51 and kicked it out a bunch of times on the offer, 75c, 83c, etc. I kept making the spread from the long side. I kept a core long because IBM was in an uptrend. Finally Read more [...]

Tags: day trading, prop trader, prop trading Posted in Mike Bellafiore's (Bella's) Blogs | 6 comments

Silly Mentality

Apr 20th, 2009 | By gman | Category: Gilbert Mendez's (Gman's) Blogs

For the past week or so we have been on the look out for the turn on the market. We are currently a bit overbought and it seems that the turn could have started today. We had a very nice steady sell off and based on the price action we could tank tomorrow. If the SPYs start to hold above 85.00 then all bets are off for the short side. As active traders we try to not trade with a bias but let the price action determine the direction of the market. However, at times we fade the direction of the market at big support/resistance levels where the risk:reward is favorable. These fade plays are for the most part not high probability plays. On these plays the risk is easily quantifiable and thus very Read more [...]

Tags: fade plays, fade trading, trend trading, trendy days Posted in Gilbert Mendez's (Gman's) Blogs | 7 comments

28 Days Later

Apr 20th, 2009 | By sspencer | Category: Steven Spencer (Steve's) Blogs, Trading Theory

Today I saw strong evidence that the recent market rally has come to an end. Today was the 28th trading day since the Reversal Day which established the five week run we have seen in the market. I like to jokingly refer to the rally as the "Obama rally" as the constant bashing of Obama on CNBC seemed to coincide with the bottom being put in place. During our AM Meeting we discussed the possibility of today being a Reversal/Trend Day. If the market were to make a meager attempt at rallying on the Open and trade below 85.20 then we would trade today with a short bias and expect a trend day. On a trend day you constantly look for good entry points with the DIRECTION of the market's trend! Read more [...]

Tags: prop trading, smb capital, trading blog Posted in Steven Spencer (Steve's) Blogs, Trading Theory | No Comments »

A Conversation with Yourself

Apr 20th, 2009 | By Bella | Category: Mike Bellafiore's (Bella's) Blogs

I received an email from a trader who is a superstar at reviewing his work. Below is an email he sent to me this weekend.....I need to slow things down and do exactly this: 1) [keep doing exactly what I'm doing, in preparation, in hard work, in planning trades, sharing ideas, and reviewing work] 2) have more patience so that you only trade each stock from the best levels -- this will result in less volume overall and likely, fewer losing trades. Once you're in a stock focus on just that one even if it means just waiting on it several minutes 3) just hit the sweep key if your price is .05 or more out of the money and you haven't already got out on offer/(bid). Simple. Only way to kick Read more [...]

Tags: day trading, prop trading, proprietary trader, smb capital Posted in Mike Bellafiore's (Bella's) Blogs | No Comments »

Some Interesting Links From the Past Week

Apr 18th, 2009 | By Gualberto | Category: General Comments

From the people who brought you FAZ and FAS, Direxion, has launched triple T-bond ETF's. It's currently very thinly traded, but so were FAZ/FAS when they first started. I think these will become increasing more liquid, and will provide equity traders with an opportunity to trade bonds for volatility swings on the release of economic numbers and Fed meetings. Definitely keep an eye on these. The SPY has formed a 3 push wedge, with a negative MACD divergence, and could be presenting trader's with a good risk/reward entry for a short. 88 was also a level where the SPY failed twice earlier this year. A little humor. I've seen some some pretty good stuff from Dilbert lately. Here's Read more [...]

Tags: prop trading, smb capital, trading blog Posted in General Comments | 3 comments

A Trade to Increase Your Stop Loss

Apr 17th, 2009 | By Bella | Category: Mike Bellafiore's (Bella's) Blogs

One of our better traders asked me a follow up question about trading HOG into the Close. As you may remember I blogged about a HOG Trade to Hold from 18.50 to 17.90 into the Close yesterday. This excellent trader struggled with HOG in the AM. He asked about the adjustments that he could have made trading HOG. Let's discuss. First let me make the point that this solid trader is our most improved trader (MIT). What stands out about MIT is 1) his determination to succeed, 2) his thoughtful questions. People often say things like, "I will do whatever it takes to succeed." And then we start working with them and as soon as the train gets off the tracks their work product worsens substantially. Read more [...]

Tags: day trading, prop trading, smb capital Posted in Mike Bellafiore's (Bella's) Blogs | No Comments »

Relative Weakness- HOG

Apr 16th, 2009 | By Bella | Category: Mike Bellafiore's (Bella's) Blogs

Relative Strength is a trade taught on most desks. When you notice the market is weak and a stock cannot go down, this shows relative strength. Conversely when the market is strong and a stock cannot go up, then we conclude it is weak. Today we saw a relative strength play in HOG. Let's discuss. After 12PM SPY was strong. SPY made a strong move from 85.50 to 87.10 after 2PM. Meanwhile HOG failed at 18.70. HOG failed at 18.60. HOG failed at 18.50. As the market was strong HOG could not trade higher. Into the close HOG could not trade above 18.54. Alex who sits next to me relayed its weakness to me. I started a short position at 18.52. Then the market came off. SPY Read more [...]

Tags: day trading, prop trading, smb capital Posted in Mike Bellafiore's (Bella's) Blogs | No Comments »