I wrote last week that the last week in August is historically uneventful. I went on StockTwits TV and said the same thing. I wrote in my blog “Vacation….Chop!” that you ought to take a break. I suggested that the last week in August or the first week in September are generally excellent weeks to vacation. I have some new information. Let’s discuss.
Steve has written many excellent blogs on Stocks In Play. Our trading philosophy as short term intraday traders is to find the stocks that are moving and use the trading set ups that work best with these stocks. The advantage of this strategy is that we can count on one hand the days that do not offer opportunity in a given year. To be more accurate we can count on one hand in the past three years the trading days that have not offered opportunity. And this past week, this week that has been traditionally slow was the best week we have had all year.
Huh? Bella did you just say that you guys had a killer week last week? But the market did not move. It was the last week of the trading summer. Everyone was on vacation working on everything not trading. Young traders were in the Hamptons hitting on the models (oh to be young again). Dads were catching up on important family time. People were having fun. People were not trading Bella. What the hell is wrong with you?
The huge advantage of trading Stocks In Play is that you only need one stock to be in play. Not only that but you need only one stock to be in play for a few days. And we saw that this week. We saw this with AIG. We saw this in the last twenty minutes into the Close on Wednesday, all day Thursday and again all day Friday. Our desk made some serious chops!
A favorite baseballism heard on a baseball broadcast is: “You see something new every time you come to the ballpark.” I went to the new Yankee Stadium on Tuesday and saw a grown man eat four sausage dogs in one sitting. Does that count? This week we again saw something new in the markets. A last week in August that offered memorable opportunity.
I had planned to take Tuesday through Friday off from trading this week and focus on my Partner business. And then came AIG in the last twenty minutes on Wednesday. I formulated a Plan B. Plan B was all day trading, all the time, in AIG. Good Plan B. GMan had planned a trip to Great Adventure for Friday with a mess of the guys. Trip Canceled. Profitable decision.
Like in professional basketball there are runs in our sport. There are days that can make your week. There are weeks that can make your month. There are months that can make your year. This August ’09 was a month to make your year. If you missed it you may have missed the best trading of the year. And this is part of the huge disadvantage of what we do. You have to be connected to the markets and ready to cancel plans when tremendous trading opportunity visits.
Trade with an open mind at all times. Expect the unexpected. Just because every August I have ever traded was slow does not mean there would not be opportunity in my twelfth August of summer trading. And this is straight out of the ”Black Swan”. We overvalue what we know and undervalue what we do not know. Eleven straight years of a quiet last week in August does not mean this year will be similar.
Best of luck with your trading! Don’t forget to follow us on Twitter!
13 Comments on “A Last Week in August to Remember – AIG”
Bella, Great Post!
Any traders on your desk struggle with AIG? What are their comments and reactions?
Thanks!!
Bella, Great Post!
Any traders on your desk struggle with AIG? What are their comments and reactions?
Thanks!!
Bella, Great Post!
Any traders on your desk struggle with AIG? What are their comments and reactions?
Thanks!!
I’m a long time lurker to your site and enjoy the informative articles but have never posted before.
Like SMB I am a momentum day trader. I too have been trading AIG and have been nailing the big run ups from bottom to top from several weeks back.
The problem I have now is that my EGO has intruded in such a way as to make me think I can do no wrong. It’s too easy and thus I have no respect for my opponents.
This is a very dangerous attitude for a trader or sportsman to have.
During the incomparable trading conditions we had last fall I never felt this way even though huge wins flew my way day after day.
I’ve been trading for 7 years now but I’m kind of at a loss at what I should do aside from taking a break to get back some humbleness.
Since you guys at SMB are experienced and trade the same style as myself , I thought you may have some words of wisdom.
I post in as real time as possible on my blog http://fearandgreedtrader.blogspot.com/
so everything is laid out there.
It’s not so much trading the little .30 – .50 winning moves, it’s when I’m nailing the rocketship rides that has got me puzzled.
Thanks,
Scott
I’m a long time lurker to your site and enjoy the informative articles but have never posted before.
Like SMB I am a momentum day trader. I too have been trading AIG and have been nailing the big run ups from bottom to top from several weeks back.
The problem I have now is that my EGO has intruded in such a way as to make me think I can do no wrong. It’s too easy and thus I have no respect for my opponents.
This is a very dangerous attitude for a trader or sportsman to have.
During the incomparable trading conditions we had last fall I never felt this way even though huge wins flew my way day after day.
I’ve been trading for 7 years now but I’m kind of at a loss at what I should do aside from taking a break to get back some humbleness.
Since you guys at SMB are experienced and trade the same style as myself , I thought you may have some words of wisdom.
I post in as real time as possible on my blog http://fearandgreedtrader.blogspot.com/
so everything is laid out there.
It’s not so much trading the little .30 – .50 winning moves, it’s when I’m nailing the rocketship rides that has got me puzzled.
Thanks,
Scott
I’m a long time lurker to your site and enjoy the informative articles but have never posted before.
Like SMB I am a momentum day trader. I too have been trading AIG and have been nailing the big run ups from bottom to top from several weeks back.
The problem I have now is that my EGO has intruded in such a way as to make me think I can do no wrong. It’s too easy and thus I have no respect for my opponents.
This is a very dangerous attitude for a trader or sportsman to have.
During the incomparable trading conditions we had last fall I never felt this way even though huge wins flew my way day after day.
I’ve been trading for 7 years now but I’m kind of at a loss at what I should do aside from taking a break to get back some humbleness.
Since you guys at SMB are experienced and trade the same style as myself , I thought you may have some words of wisdom.
I post in as real time as possible on my blog http://fearandgreedtrader.blogspot.com/
so everything is laid out there.
It’s not so much trading the little .30 – .50 winning moves, it’s when I’m nailing the rocketship rides that has got me puzzled.
Thanks,
Scott
Scott,
Interesting blog for you here: http://www.annemarietrades.com/
Bella
Scott,
John Carter mentions in his book to take up kickboxing or some such sport. He says it keeps him humble.
I’d say to take up kickboxing, but not seriously. That way you get your teeth handed to you each time you show up.
In all seriousness… Take on a hobby that is a real humbling challenge. Just not one that makes it so you can’t get up the next day to trade.
Just my $0.02
Scott,
John Carter mentions in his book to take up kickboxing or some such sport. He says it keeps him humble.
I’d say to take up kickboxing, but not seriously. That way you get your teeth handed to you each time you show up.
In all seriousness… Take on a hobby that is a real humbling challenge. Just not one that makes it so you can’t get up the next day to trade.
Just my $0.02
Scott,
John Carter mentions in his book to take up kickboxing or some such sport. He says it keeps him humble.
I’d say to take up kickboxing, but not seriously. That way you get your teeth handed to you each time you show up.
In all seriousness… Take on a hobby that is a real humbling challenge. Just not one that makes it so you can’t get up the next day to trade.
Just my $0.02
“Trade with an open mind.” This small piece of advice can make such a large difference…
“Trade with an open mind.” This small piece of advice can make such a large difference…
“Trade with an open mind.” This small piece of advice can make such a large difference…