I get this question almost daily: Jeff, what are you going to trade today? Or this one, especially in this market: Jeff, do you think we are close to the bottom? These are both good questions and there is nothing wrong in asking these questions, but what I learned pretty early in my trading career, and it has come in … Read More
A Fade Trade
During our video review session intraday today we watched some tape of TGT. One of our experienced traders, NYU, faded TGT into its second upmove on the Open at 33.75. There was a struggle at 33 and the buyers won sending TGT quickly to 33.80. NYU thought the move was overdone and got short. This was a poor fade trade. … Read More
The Box vs. The Big Picture
I was at the office Sunday doing some admin stuff and working on some trading prep for this week. One of our senior traders was at the office reviewing some trading videos as well. He had a question for me about how he could trade the large reversals we have been seeing in the market more effectively. He is a … Read More
Find the Easy Plays
Trading is a tough profession. Every day you need to figure out a way to make money. During the first couple of years of your trading career it is important to be in the easiest plays. One such play involves getting long above a recent support level in a stock. The more recently the level was important as support the … Read More
GS: Too Hard?
Most new traders should not be trading GS. GS is a very difficult trading stock. The spread is 30c to 50c. It reverses often intraday. There are programs that make it difficult to hit new lows. Trading with size is near impossible. Only the very best of set ups are profitable. GS is broken. And it has been since it … Read More
A Fundamentally Poor Trade
Never short a stock very close to an important support level. Let me explain. 88 is a very important support level for GS. Tuesday the stock leaked below 88. But it could not hold below 88. Later the stock rallied strongly. A few on our desk shorted GS when 88.30 held the offer. This is a fundamentally poor trade. Let’s … Read More
Make This Trade
Goldman Sachs (GS) is significantly weaker than the market right now. Just a few examples: On October 29th after having rallied strongly for two days it gave back almost all of its gains in one day; as the S&P has consolidated and shown strength the past few days GS has sold off sharply on negative chatter; it dropped four points … Read More
“Rut” = Kick in the Butt, Swift Knee to the Gut
Dictionary.com defines a rut as, well the third definition at least, “a fixed or established mode of procedure or course of life, usually dull or unpromising: to fall into a rut“. And that is exactly the definition I was looking for. Like any human being I get into ruts. Which is fine, since that is human nature, no? But I … Read More