Thursday, August 27, 2009

The slow days of late summer. How to profit without the mental anguish (SPY, AIG)

A lot of being a trader involves patience more patience and the ability to mentally survive slow periods in the market. Being a trader one can become almost addicted to trading, you can not for the life of it tear yourself away from the computer even in the slowest times for fear you will miss "the special trade". I felt this way today, as AIG made another monster run i was away from my computer thinking, "if i was only at my computer i would have crushed it". I cannot dwell on this, every trader needs time off to refresh and regroup.

Sitting a computer for 6 hours a day sometimes churning 100 tickets can become maddening when things are not trading like you expect. As fall approaches more and more 5 star trading opportunities will present themselves, we will probably not see trading like last fall (in the back of my mind i hope we do), but any increase in volatility will help fire up the motivation to trade aggressively. Aggressive trading is where the money is made, knowing when to be aggressive is almost as key as knowing what to be aggressive in. The only trade i have really seen this summer which has paid to be aggressive in is AIG.

Friday, August 21, 2009

August Option Experation. How to profit. (IBM)

Today is option expiration, the 3rd Friday of every month IF you were not aware. Magical things can happen on days like today, you can buy up the cheapies with size, only to sell them out for huge gains as the underlying moves towards your speculative strike. For me option expiration is just that, low risk/high reward speculation. Another tricky cog in the wheel to profits is time value, which is zero, only intrinsic value and Vol are factors in price.

Thursday, August 20, 2009

Support Trading RMs Shae Peppler

Please visit to vote for Trading RM's Shae Peppler to be the 2009 Chicago Huddle spokesperson. You can vote up to five times.

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Thursday's market outlook: July Jobless claims UP

Today looks like another day of nearly flat trading, nothing outperforming, nothing under performing. As some of you may read on twitter i am becoming more and more frustrated with price action and lack of volume after initial moves. What do i mean by this? Well, most moves in stocks make their move in the AM then slowly decay as volume drys up. In other words the bidder or seller steps out of the ring never to come back, so if your intra day trading this can be disastrous as price gaps in the book can wreak havoc on the trend you are trading. So you can say i am looking for some follow through, this probably will not happen until September, keep your ammo dry in the meantime. You never know when 5 star trading will present itself, when it does you do not want to be caught with the cookie jar empty. i.e. small losers big winners. Hedge Accordingly


(bearish for retail and real estate)

Tuesday, August 18, 2009

Par Pharmaceutical short squeeze. chart and commentary (PRX)

A classic short squeeze played out today in a thinly traded biopharm stock, ticker = PRX. Now what makes this price action worth highlighting is the fact it was moving on zero news. You might ask what on earth caused me to pull this stock up?

1. It was breaking highs (screener)

2. There was repetitive buying on the offer or a few cents over in the stock 100 shares at a time

3. This told me someone was hiding their true size (meaning big size)

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