Archive for April 2009

Is Trading Really an Individual Sport?

Apr 26th, 2009 | By | Category: Mike Bellafiore's (Bella's) Blogs
We are all paid at the end of the month based upon OUR trading performance. It is easy to measure your pay based solely on YOUR production. This is a mistake. Let's discuss. We have two excellent young traders on our desk Dov and DLE. Dov killed it in the fall and then struggled to start 09. DLE was consistent through all of these periods. Frequently I heard DLE say,"It is ok Dov, hang in there." Dov might be upset and storm off for a walk. When he returned DLE would immediately talk to Dov about levels he was watching. Talk about picking another trader up. And then Dov got back on track. Last week I heard Dov saying, "It's Read more [...]

Second Day Play

Apr 24th, 2009 | By | Category: General Comments, Jeff Tomasulo's Blogs
I like earnings season not only for the volatility that comes from the day a company reports. I also like it for the information that I am able to gain from trading and watching the price action of a particular stock.  This information gives me an edge the next day, which gives me a higher probability that my next trade will work in my favor. AAPL reported last night.  Here is what I am looking for.  We saw AAPL trade between 126 and 124 all day.  When the SPYs traded below 84, AAPL still held above 124 and only broke below briefly. Once the market found its footing, AAPL quickly traded up to 125 and then to 126 where it Read more [...]

MS: A Great Second Day Play

Apr 23rd, 2009 | By | Category: Steven Spencer (Steve's) Blogs, Trading Theory
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 Read more [...]

SMB on CNBC’s Fast Money Tonight

Apr 23rd, 2009 | By | 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 [...]

Why do you trade?

Apr 22nd, 2009 | By | 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 Read more [...]

IBM Pattern

Apr 21st, 2009 | By | 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 Read more [...]

Silly Mentality

Apr 20th, 2009 | By | 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 Read more [...]

28 Days Later

Apr 20th, 2009 | By | 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 Read more [...]