Archive for June 2009

Know Your Edge(s) and Thanks Joe P

Jun 30th, 2009 | By | Category: Steven Spencer (Steve's) Blogs, Trading Theory
The market has slowed down quite a bit recently.  Unless you are trading the most In Play stocks there is virtually no follow through.  At times like this it is even more important to refocus on your trading edge.  For myself I have identified four things that have allowed me to make money consistently over the years. 1) Previous day's inflection points: I am great at identifying prices from the previous day's trading action where I can make trades.  Trades that offer a risk to reward of 10:1 or more.  By the way, this isn't that difficult a skill to acquire.  Even some of the newer traders on our desk with less than six Read more [...]

Funky Psychology

Jun 30th, 2009 | By | Category: Gilbert Mendez's (Gman's) Blogs
I traded HES on the short side yesterday and came in with an overnight short expecting a crack through the $54 level. It was looking pretty good in premarket as some small dopey prints went off around $52.57 and $53.01. I was hoping for a pop near the 54.60 dream short level where I wanted to lay into the position. I wasn't expecting the stock to trade much higher than 65-70 cents at all so I offered heavy. I was okay risking $350 on that position and in fact I managed to close it out (near the highs of the day) for that $350 loss. Shortly after covering I realized what had just happened and got back in the trade and chopped up Read more [...]

Security in MFE

Jun 29th, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
MFE made an all-time high today.  GMan was long seemingly all day.  And we were deciding whether to add some above 42 and then hold.  Let's discuss. We did buy more since the stock was so strong.  This was an easy decision.  And then we had to decide whether to sell when it slowed above 42.  We held. 1) MFE moved easily above 42.  There was no selling every penny that we see with a weaker stock. 2) MFE is at an all-time high so we give these stocks more room. 3) MFE was in an intraday uptrend so we are more likely to hold such stocks. 4) SPY broke below 92.60, a support level in the afternoon, but it was hanging Read more [...]

Heavy Lifting Not Required

Jun 27th, 2009 | By | Category: General Comments
Yesterday ACN was in play.  One of our new traders showed his trading tape of ACN.  He was doing the heavy lifting in this stock.  This was not necessary.  Let's discuss how to find the easiest play in an ACN from yesterday's action. Below is the news on ACN before the Open: Accenture beats by $0.04, reports revs in-line; guides Q4 revs below consensus; guides FY09 EPS above consensus (31.64 +0.21) : Reports Q3 (May) earnings of $0.68 per share, $0.04 better than the First Call consensus of $0.64; revenues fell 15.6% year/year to $5.15 bln vs the $5.2 bln consensus. Co issues downside guidance for Q4, sees Q4 revs Read more [...]

Second Day Play: BA

Jun 25th, 2009 | By | Category: Gilbert Mendez's (Gman's) Blogs
I got most of our desk in that play in BA yesterday. I traded it fairly well and managed to keep a significant core for most of the down move. However, watching back my tape and seeing how this is on my list of plays I have to load the boat in I really wussed out; this was a play that could have made my month. I had a great day, do not get me wrong, but had I been better prepared mentally for this down move I would most likely be writing this blog from Vegas. 🙂 But rather at being mad at myself for not crushing the play I got a few interesting lessons engraved in my head. I replayed the whole setup last night so that the next Read more [...]

From the Mailbag: BA

Jun 25th, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Yesterday we blogged about a short in BA.  A reader posted this question in response. Daryn Says: June 24th, 2009 at 5:17 pm I was thrilled to see this post today… at least I knew I was looking for the right trades. What would you say to a trader who watched this trade setup and then somehow managed to walk away with a scratch…and by scratch I mean not a single dime. I got short at the .72 and was in the money almost right away. My initial stop was at .81 and the trade was working nicely. However I brought my stop down too quickly (right to my entry point) and covered my short at freakin penny from the move Read more [...]

BA- A Good Chance to Trade Lower

Jun 24th, 2009 | By | Category: General Comments
Our desk did a nice job of trading BA today on the short side.  Below 42.75 BA offered an excellent risk/reward opportunity short.   Let's discuss why this level was so likely to work. Often traders are in the wrong stock.  Or often traders determine levels in stocks that are not significant.  BA was not the wrong stock today.  42.75 was not the wrong level.  It moved off of this level.  It moved cleanly.  BA moved significantly. And as traders there were characteristics of this set up that we must remember.  We will see set ups like BA again.  It is important as traders to brand in our trading brains the set ups Read more [...]

RIMM Revisited

Jun 24th, 2009 | By | Category: General Comments, Steven Spencer (Steve's) Blogs
The market has really beat the crap out of RIMM the past week or so. 86 to 68 without a significant intraday bounce. That is the definition of short term oversold. So today in our AM Meeting we discussed the possibility of a bounce. We were focused on a couple of key levels from the prior trading day. We noticed that RIMM had found some support at the 67.80 level on Monday. We also noticed that a bid couldn't hold above 69. These two levels established a framework for us to view RIMM's trading action today. On the Open RIMM quickly dropped 67.80 but immediately popped back up so I got long. I was mindful of the 69 level Read more [...]