Friday, November 16, 2007

Long Overdue Update

Well, as you know, MVIS took off without me. Luckily though I had set a buy-stop at $4.15 for 2K shares. Those filled, and I picked up another 1K at 4.22. The fact that it started moving the day after I sold out is just uncanny. The market really can make one question his own existence. Sometimes I think there is a super-computer at Scottrade that sends my trades to others so that they can trade directly against me. Of course, I know that is silly. But sometimes it certainly feels that every move I make is the exact opposite of what I should do.

I have managed to shake off my earlier blues, and have returned to a semi-calm and collected state of mind. What I have realized is that I cannot shake my belief that we are in a period of correction that will likely last for several months. I hesitate to call it a bear market. I feel I must be positioned for it. If I am to be a trader, I have to be able to profit in times when the market is not trending up. Granted, there is nothing wrong with going to cash, sitting on one's hands, etc. But for me, there has to be a marriage between all those elements.

For right now, realizing that I feel strongly that the market is in a downtrend, I must not take on any additional longs. Sure, I bought MVIS. I've also bought ALDN and OXPS. For the latter two trades, I have stops set well below the average daily range, and I will ride these out for better or worse. Consider them a long hedge against my belief that the market will continue correcting.

I have also begun buying puts. I bought 10 Jan 52s for the Qs. I will also be looking for puts on the SPX and the DOW.

I have also shorted GES and EMN. I will continue trolling daily for shorts.

Again, I want to thank everyone that leaves me comments here as they help more than you can imagine. Even contrary opinions are very valuable. Ticonderoga left an opinion that this is a bull market, and he begged me to quit shorting the market. On face value, what he says makes a lot of sense. It forced me to really think about what my knowledge and experience up to this point has prepared me for. After much deliberation, I have to realize that often I am right, but early, and that often I am right, but lose conviction before the trade becomes profitable. If my belief is that the market will trend down for a bit, then I must act and hold to that conviction.

This weekend I hope to dispense with all the ruminations and get back to some charts. Specifically, I want to chart out what the indexes are doing, focusing on my plan for the coming months.

Oh yeah, I'll have Stockalicious updated at some point today with all my recent trades and latest positions.


Sierra Water said...

I am heavy short CMG via puts and shares as of early this week. I would initiate short positions on any meaningful bounce. Theme restaurants such as Chipotle and BWLD do not heed well in recessions.

IIO said...

Just curious why you would be buying so much BZH? Aren't they like one of the poorest quality homebuilders?

Sierra Water said...

Standard Pacific is the worst and probably first to go.

JakeGint said...

Shit, I thought Standard Pacific was a railroad.

The transports look like crap, btw. My family is deep into UPS and we dumped a shitload yesterday and have hedged the rest. UPS is one of the strongest out there, but even it is gonna take a hit here, given what FDX just did.

Dow theory fellahs, it still works.

Wood, wtf with the Fly's site? Is it down for repairs?

Or out of despairs?


PS -- glad to see you're keeping a good attitude.

Dinosaur Trader said...


Fly's site is down because "the Peanuts" may or may not have melted it.

Equal pay for equal work.

Power to the Peanuts.


Deborah said...

Too much risk in the market for my tastes right now... I am just watching...

Anonymous said...

Good luck. Have you looked at the Proshares ETFs?

Woodshedder said...

Deb, that's prolly smart.

Anon, yes I've traded them many times.

I've been reading up about options and have slowly been getting my feet wet with small positions.

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