Archive for July 2009

High Frequency Trading

Jul 31st, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
In light of all the recent commotion about high frequency trading (HFT), we have decided to compile a list of articles that depict the advantages, disadvantages, as well as arguments for and against HFT. The list follows below: Stock Traders Find Speed Pays, in Milliseconds: This is the original exposé by Charles Duhigg in the New York Times What's Behind High Frequency Trading (Added 8/3/2009): Outlines the main definitions, questions, and relevant information related to HFT and how it affects different types of investors in the market. Goldman's $4 Billion High Frequency Trading Wildcard: Tyler Durden describes the benefits Read more [...]

SMB Reading the Tape

Jul 31st, 2009 | By | Category: Gilbert Mendez's (Gman's) Blogs, Reading the Tape
Lately we have been receiving many inquiries from our fellow readers wanting to learn more about tape reading. We are NOT ignoring your emails and comments in our blogs! Unfortunately tape reading is a complex and extended topic that cannot be covered in a handful of paragraphs. However, because of the high demand we are currently working on developing a training manual for tape reading exclusively. The manual will be available commercially from our site in the very near future. Some highlights about the program: * Structured as a weekend crash course, the manual covers the basics of tape reading * We cover Read more [...]

FSLR After Hours

Jul 30th, 2009 | By | Category: General Comments, Steven Spencer (Steve's) Blogs
Some great action in FSLR after reporting today.  It immediately drove up from 175 to 187.  There was a pullback to 180 where the bid momentarily held before dropping out to 179.  Before you could blink it drove up to 190.  This powerful drive got us to start thinking about where to buy on a pullback.  Gman was thinking 185 would be a good spot to get long and I agreed. But then something changed.  A seller appeared at 187 and actively held the offer.  I thought to myself that this was still two points from the 185 area so perhaps a long would still work at that price.  FSLR started to trade down from 187 as sellers stepped Read more [...]

Keep It Together

Jul 29th, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
Panic is not a good thought for a trader.  And during really crazy moves in a stock, when you may be tempted to panic, calm is required.  I had such a situation on the Open with MHS.  Let's discuss. So we start the day and Alexander gets me into this MHS.  I wanted to trade something else but he just bullied me into this MHS as most subordinates do (no they don't!).  MHS is doing this above below nonsense noise at 52, which for all those who carp about the programs understand.  51.90, 52.10, 51.93, 52.05.  Yeah, yeah, yeah.  Nonsense noise. But 52 is an important technical level.  A hold above 52 might be the catalyst Read more [...]

The Pattern

Jul 28th, 2009 | By | Category: Steven Spencer (Steve's) Blogs, Trading Theory
As traders we are always looking for patterns.  If we can spot a trading pattern that repeats itself (at least for awhile) we have an edge.  When people hear the word "pattern" they usually think of a visual pattern.  For traders this would typically be represented as a particular chart pattern.  For those of us who read the tape it might be a pattern we recognize on the Level II.  But the pattern I want to discuss today is a behavioral pattern. In the two weeks since earnings season began it is VERY clear that the easiest money is made the second trading day AFTER a company reports their numbers.  It started with GS, then Read more [...]

A Bad Day

Jul 27th, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
As traders some days we just won't have it. During the last two training classes at SMB our best students have been female. For some reason only about two percent of the resumes sent to us originate from women (how do we get more?). A leading female student in our present class finally had a negative trading day in her young career, and she asked an excellent question about her day today: What do you do when you are just off? Let's discuss. So this young woman for the first time in her eight-day-old trading career posted a negative result. Congratulations! Welcome to our rather large club. She obviously didn't want to Read more [...]

Weekend Review: July 20 – 26, 2009

Jul 26th, 2009 | By | Category: General Comments
The SPY finally traded above that 95 level this week.  In fact, it traded above that level for most of the week.  With earnings surprises to the upside from most S&P companies, it's understandable as to why.  Even in the face of tech heavy weights MSFT and AMZN selling off on initial earnings results, we managed to hold a bid above that crucial level.  Now beginning this week, all eyes are on the 98 level for immediate resistance, and 96.70, which was Friday's support. A broadening formation is being completed on the major indices.  Even as we're making new 8 month highs, this is something to be aware of. Ask yourself Read more [...]


Jul 25th, 2009 | By | Category: General Comments, Mike Bellafiore's (Bella's) Blogs
HFT (high frequency trading) has dominated the financial media of late. [email protected], Charlie Gasparino and CNBC, the StockTwits nation, @steenbab, GMan from @smbcapital, and many other talented bloggers have all weighed in.  And then came Senator Schumer: (from Bloomberg courtesy of @zerohedge):  Senator Charles Schumer asked the U.S. Securities and Exchange Commission to ban “flash orders,” saying the transactions give high-speed traders an unfair advantage over other investors. Wow! For all those heavily invested in adjustments to HFT you cannot ask for a more powerful person to enter the room.  You have gotten Read more [...]