Back in the day I used to think that every sale was a bad sale.  Inevitably internet stocks would somehow find their way higher.  And then came subprime.  Followed by its evil twin the near recent collapse of our banking system.  And during this historic trading period at times every cover was a bad cover.  And yesterday I battled a case of deja vu in SYNA.  Let’s discuss.

Alexander is a trusted contributor to all things good at SMB, for instance this blog.  And as a result he sits right next to me so that I can easily direct him to start our next important project.  If this were a comic book, I would be Batman, and Alex would be Robin (except if you asked him he would be Batman and I would be Alfred, but that is whole nother discussion).   And yesterday after the close Robin turned to me and said, “Bella (Batman?) why didn’t you short SYNA into the upmoves instead of hitting the new low?”  Great question.

“First Alex, you are fired!”  Ok not really.  Yesterday in SYNA I crushed it on the open.  It was weak.  I was short.  All was good with my trading world.  Later, I gave back a little letting some dopey algorithm take my money.  And then made some money catching a quick upmove to regain my rightful place as master of SYNA this Friday.

Then I took a break and did all the things a partner has to do that most traders never want to know about and would never be interested in doing.  But then it was 2:15PM and time to leave Gotham Partner Land and return to my oasis, trading.

SYNA had trouble trading above 25.75 during the midday.  I know this because GMan told me and I can read a chart.  SYNA had not traded below 25 during the midday.  And there was SYNA heading down to its intraday support level of 25.  But it looked weak.  Near 25 SYNA was not bouncing off this level the way that it had previously intraday.  The upmoves after the downmoves were smaller.  The tape showed no signals that this 25 intraday support level would hold.

And it didn’t.  And I started a long term short into the close at 25.  And this trade worked.  But then there is Alex’s question.  I kept adding to my position by hitting the new lows in SYNA.  And this didn’t work.  SYNA would trickle down 3c after making a new low, I would cover and then it would trade higher 15c.  Hence Alex’s question, “Bella why didn’t you just short the upmove?”

1) I should have.

2) I didn’t want to miss an explosive downmove so I kept hitting the new low.  SYNA was again broken intraday below 25 so I was expecting a panic downmove.  It never came.  But sometimes a controlled downmove can become an explosive downmove.  So I kept at it.  But again this just was not working.

3) There was something about the downmove that gave me pause to short the upmove.  When the downmove is so controlled, after the stock is broken from 25, I wonder if there is a buyer waiting to squeeze me back to the whole.   And you will see this often.  If the downmove is controlled the stock may pop quickly near the Close to the previous support level.   So I couldn’t get myself to short the upmove.

4) I should have.

I will watch my tape of SYNA today at the office.   I did catch a point downmove on my core lot which I did not cover until just before 24.  So that was a chop.  But I could have traded this downmove better.  And today I will watch my tape, in between safeguarding the trading world from the evil algorithmic programs and villainous institutional market players, to figure out how. Make sense Robin?

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