Every morning before the market opens I review the list of my top trading ideas. Recently, they have mainly been long ideas as the market is a raging bull. But I’m always armed with a few shorts in case the market decides to come in. One of the great pluses of being a short term trader is that you can get in and out of positions in a milisecond with almost no risk. This is a luxury not afforded to portfolio managers.<\/p>\n
At the beginning of our AM Meeting Adam Grimes reviews the macro picture for the day. At the end of his presentation he offers recent support and resistance levels for the SPY. Today, when he said “there really isn’t much in the way of support until 118.60” it struck a nerve. I don’t think many people attending the meeting were formulating trading plans for “what if” the SPYs melt today. Certainly, the ideas on the AM Idea Sheet were all longs. Gman at least offered some nice short setups in the gaming stocks for those willing to listen. I was curious to see how our desk would react if we sold off.<\/p>\n
My own go to shorts were FCX below 78.90 and AAPL below 167. However, my primary trading idea for the Open was to be long RIMM based on yesterday’s massive buying. But a few minutes before the market opened I saw that AIG was gapping down a couple of points. I had been looking for a gap down yesterday in AIG. Over the weekend I read Tim Geithner’s comments on how the Treasury was going to lose $45 billion on the AIG bailout so I figured some big hedge funds would use that to get the stock rolling to the downside. As is usually the case with AIG it took one extra trading day to react (and an analyst downgrade).<\/p>\n
So the market opened and I got long some RIMM and short some AIG. Both traded up fairly quickly. Luckily for me RIMM kept on going higher but AIG reversed and dropped over one point. When RIMM had trouble holding above 74 I sold most of my position and tweeted that those who were long should consider taking some sales.<\/p>\n
In the meantime my focus moved to AIG. The market was starting to roll over so it made sense to me to focus on a stock that was weak. I overlooked the FCX and AAPL shorts that I mentioned above but I’m kind of getting up there in years a bit and can only focus on so many things at once. But I was rewarded by a multi-point down move in AIG. <\/p>\n
I have no idea what to expect tomorrow as I have yet to review any charts or fully digest the day’s price action. But I know regardless of whether there is further downside follow through I will be armed with both good long and short ideas and will press my advantage in the ideas that are working best.<\/p>\n","protected":false},"excerpt":{"rendered":"