Snooze Fest

The Tech/Telecom book didn’t have the best of days closing down 11 basis points with the broad market closing flat.  The book was especially sluggish when comparing the performance to the NASDAQ, XLK (Select Sector ETF), and the SMH (Semiconductor ETF) which closed the day up 39 basis points, 19 basis points, and 97 basis points, respectively.  While Semi’s had a strong day our bigger positions GOOG and AAPL had sluggish days.

The winners in the book were RIMM and INTC.  RIMM a name we were short got hammered today on tepid torch sales and we covered up our short a little early right off the open, RIMM traded down the rest of the day closing down 4.8%.  INTC which was strong today on the announcement that they would be buying Texas Instruments cable modem business.  We don’t own INTC but we day traded it today as it seems to be finding a level just above $19.  INTC closed the day up 1.67%.

The losers in the book were AAPL, CREE, GOOG, DELL, and ELNK.  AAPL was sluggish for the majority of the day and couldn’t manage to catch a bid when the market made its early rally up to the overnight highs.  CREE continues to bleed lower, but the velocity is starting to slow and CREE closed the day down 28 bps.  GOOG and DELL were fairly muted closing down 16 bps and 42 bps, respectively.  Last is ELNK which we are short was up 47 basis points closing at 8.55 and traded the day in a 15 cent range.

It was a brutally slow day today and I hope for better action tomorrow but I think its safe to say the summer trade is in and it will be another snooze fest tomorrow.  I learned something very important today and that’s to pay attention to the overnight highs and lows in a market this dull.  Today we traded right up to 1080.50 with 1081.50 being the overnight highs on the spooz and then pulled in to about five handles.  It very important to understand the market you are trading in and the advice I learned today is something that will be incorporated in my trading for the rest of my career.

Financials Recap: A New Responsibility

Today, for the first time I was responsible for monitoring and executing in the Financials book. With Annie’s departure, I was tasked with taking over her names since the Industrials book, which I normally watch, had the fewest names of all the portfolios. Today, the Financials book closed down an obscure $9, a value almost impossible for a book with over $200,000 in value. Leading the way to the upside was JPMorgan, trading up 18 cents to close at $37.68. Looking at the daily chart, the stock appears to be hovering in no-man’s land, trading over a point away from any major levels of support or resistance. An interesting event on JP’s daily chart occurred on August 2nd when the stock traded to highs of $41.70, a mere 7 cents above the 200 day moving average. The following day, the stock opened up at $41.50, 13 cents below that SMA and proceeded to sell off $3.91 to settle at where it trades today. If a trader refuses to believe in the lines, he should take a hard look at JPMorgan’s daily chart. On the losing side of the ledger, AXP closed down 19 cents and we were drained of $304 worth of P&L in this stock; nothing to write home about. While the book’s final P&L closed flat, there was an impressive moment this morning when every stock in the book was green, long and short alike. This phenomena was the product of thoughtful stock picking and careful technical analysis i.e. collective intelligence.

Lucky Number 7 (We Could All Use A Little Luck)

Every now and then I can’t help but think back to one of Sam’s old blogs titled “Is It Really Better To Be Lucky Than Good?“.  At the time I had, without hesitation, picked Good.  I would hate to base my life off being lucky; I’d much rather bask in the sense of security that is gained from being good.  I’m not saying that we can do without luck.  Of course, we could all use a little luck now and then to work in our favor.  However, I would argue that it is extremely rare to be consistently lucky.  Good = consistent, and consistency is an item put near the top of my list of values.  Sam concludes his blog saying that slow and steady wins the race.  I would like to believe that that is true, but it seems like “slow” has a wider spectrum than I thought.  I think we could all use a bit of luck right now.  This market has been so slow, not just on a volume level, but slow to show its direction.  The title of this blog is just a desperate attempt to grasp at straws at this point.  I’m counting six attempts to push higher in the market since the late April sell off.  Will the seventh attempt finally allow us to break out of this range that we’ve been trading in?  Again, I don’t think so; think we will be stuck in this range for a while.  I want to believe that the break out to one direction will happen by late October as one side will have to give in by that point.   But like I said, “slow” turns out to have a wider spectrum than I thought and this bouncing back and forth might carry us well through 2011.

HFL Portfolio Recap: 8-17-2010

The Hedge Fund Live portfolio closed the day flat performing in line with the S&P 500 but lagged the Russell 2000 which ended the day up 80 basis points.  As far as the book is concerned we covered our short in RIMM and started legging into the FXE short with today’s pop in the Euro.  We exited our position in ATI on strength and sold a portion of our position in BKS.  Overall we took the net exposure in the book down by about 2.10%.

The biggest winners on the day were BKS, CBS, IMAX, RIMM, and F.  BKS had a strong day closing up 4.15% on no direct news.  CBS was up 1.36% while IMAX was up 70 basis points.  RIMM got hammered today on tepid torch sales over the weekend closing the day down 4.81%.  Ford rounds out the top five winners trading down 1.32% today.

The losers in the book were AAPL, ATLS, ESU0, AXP, and CREE.  AAPL was relatively weak all day and couldn’t rally with the market early and ended the day off lows down 59 basis points.  ATLS closed the down 1.42% about 20 cents off the lows of the day.  The hedge cost us about $750 with the futures closing up 12 basis points.  AXP was down 46 basis points at 41.54 while CREE bleed lower the fifth straight day closing down 28 basis points.

We went out 3% net short as uncertainty is still paramount and took our gross exposure down to 51%.  Hoping for more excitement tomorrow but the summer trade is in and we will stay light for the time being.

Farewell Blog

I decided to email this farewell blog to the firm for those who don’t check the blogs on a regular basis. I figure it would be smart to also email it to all employees—Jerry Maguire style—t o give everyone a nice opportunity to read what may be my last blog on the site. I use “maybe” because perhaps I’ll be asked to guest blog every once in a while, which I would happily accept. I’m thinking of picking up comics per inspiration from Sammy F.

I never thought my last day on the desk would be one of the most stressful. It wasn’t that I had that much work to get done on this quiet Friday in August, but I feel an emotional weight on my shoulders as I reflect on my time here over the past six months. By now everyone most probably knows how I ended up working here but I’ll refresh everyone’s memory. I figure the story can never be told enough as it’s not your most typical entrée to employment.  I was training at the yoga studio downstairs to become certified to teach yoga as a part-time endeavor and I ran into Zach, probably the one friend I would least expect to see in a yoga class. He told me he was working upstairs at a hedge fund and went on to say they’re always looking for more trainees. At that time, I was 6 months out of college, a part-time student and part working for a family startup, and was eager to get a job where I’d gain skills in the financial markets and business in general. I went on an interview where I was told I would gain a knowledge base equivalent to that of an MBA degree. I took the job as a trainee where I would earn next to nothing of an income and I never looked back. Essentially, I took a job with “zero risk and infinite upside” to quote some of the trading lingo I’ve picked up on.

Rather than focus on the reasons for my departure I’d like to take the opportunity to address some of the things I’ve learned and thank everyone on the desk for making this work experience probably the most rewarding, fun and challenging jobs I will ever have in my life (although I hope not) . One of the first blogs I wrote was listing the things I hoped to learn as a trader at TFG and I can say without a single double that I can check off every item on my list. I am very proud of the work I did for the desk and of the skills I’ve acquired here, but one of the things I learned on the desk is how to make decisions when they need to be made. I can’t say I won’t have any regrets leaving (especially if HFL makes it big), but I do know that this is what feels right for me at this point in my life both personally and professionally.

If my lifetime membership to Hedge Fund Live is honored, you can bet that I will tune into the broadcast and contribute to the member community. Lastly I thought it was appropo to list some kernals of wisdom, advice and idiosyncrasies I’ve picked up along the way at HFL that I hope to carry with me on the rest of my lifelong journey.

Zach:  how to be as blunt as possible

Betty: extensive excel knowledge

Tynik: most intense work ethic I’ve ever encountered

Judah: how to be easygoing in a stressful environment and to always answer “yes got it under control boss”

Saad: never try walking over a frozen pond

Sam: how to not be so awkward in front of the camera

Dean:  Wam Bam Thank You Mam. Adding skepticisms into my life in EVERY aspect.

Mosk: How to read charts, how to fill air time with banter, and how to love the great RUSH

Schwartz: how to figure things out yourself and how quote really bad movies

JF: How to make decisions and how to not include the weeds in communication. Also, NO AMBIGUITY

Alan: Pride is Permanent

The Coaster that Only has Drops

HFL Portfolio Recap: 8-12-2010

The Hedge Fund Live portfolio had another nice day of outperformance returning four basis points while the S&P 500 closed the day down 54 basis points.  As expected the best performer on the day was our hedge which added 13 basis points to today’s PNL.  BKS was are largest equity winner closing the day up 4% as takeout chatter becomes more realistic.  AAPL had a solid day and looked really strong around noon but pulled back to close the day up 64 basis points.  CDMA news continues to pour out everyday and people are starting to have conviction that the Verizon iPhone is realistic.  MA and V were the strongest names in tech at the open and while they both rallied MA was the one that could hold the gains and closed the day up 1.04%.  RIMM started working again to the short side as concerns in India become more apparent.  RIMM closed the day 40 cents off the lows at 54.17 down 3.6%.

The top losers on the day were fairly muted considering how ugly of an open we faced.  XIDE continues to trade lower closing the day at 4.85 down 2.81%.  TTWO had a horrific day closing down 7.40% on no direct news.  AXP, CREE, and CBS round out the losers closing down 1.89%, 1.72%, and 2.07%, respectively.  We left the books unchanged overnight, although the action was more constructive today there is just too much uncertainty to be exposed overnight.

Charlie Rangel makes me sick

Another example of our wonderful political system and the morons who support them. Charlie Rangel, a lifetime politician is under investigation for 13 counts of ethics violations including misappropriation of funds and in true to politics fashion decides to throw himself an 80th birthday at (drum roll please) the Plaza in New York City. Not only was it a chance to celebrate his birthday but it also seemed like a good time to raise money for his next election campaign and to help finance his upcoming legal battle on said ethics violations.

But thank goodness that people are too smart to pay to help this idiot skirt run for re-election or finance his legal battles, oh wait cancel that the party’s 800 tickets were sold out. I find it hard for me to find a more sickening story to think about this morning. Have we lost our collective minds as a country? Do we really needs more years of Rangel? Can’t he just fade off into the sunset?

Clearly the Ted Kennedy route is in the cards for this perfect role model of defending the every man. This man stands for everything that I hate about current politics and is the poster child for why I say that we are in huge trouble as a country as long as we have leadership like this. Jeremy Frommer has taught me that you lead by example and this is the last example that I would want my kids to follow.

Say no to this madness, call your congress people and tell them that you will not stand for this anymore and that you are committed to voting out the bums that are hell bent on destroying this great land of ours. Rangel is supposed to get a fair trial and I am in full favor of that, but must he flaunt this type of behavior during a time of scandel and a time when this countries fiscal security hangs in the balance?

This just does not pass the sniff test to me. If you think I am wrong or right, please comment, I would like to hear what others think on this topic.

From construction to the markets

In this my first blog post I feel compelled to explain just what the heck I am doing here. I was in construction for 30 years and can honestly say that there isnt anything I wouldn’t tackle in my home from building a deck to constructing walls and running new electric for my finished basement. After being laid off in this economy I stumbled upon Mark Moskowitz and his teachings. He introduced me to day trading and gave some of the most valuable lessons that only a truly commited mentor would share. Thank you Mark. Well, now after my first 10 months of live day trading I find myself learning everyday and finding out things about myself that I didnt even know. In construction you learn to measure twice and cut once. You pick up tips and short cuts that can save time and money without compromising a quality finished product. In trading, I am finding out there are no short cuts. There is a road to travel and dues that will be paid and you must put in your time. When your own money is on the line you will have your wits about you at all times. Just like operating machinery or an electric tool you must be aware at all times. You must have respect for the tool you use or the market you trade because neither one has any feelings or cares about your safety. Both will cause pain beyond belief if you are not in control of your own actions at all times. And when you focus, plan,and execute with calm and an understanding of whats in front of you, both can be very rewarding. It took me many years in construction to feel confident that when my boss handed me a set of blueprints instead of asking myself “how the heck can I do all this” to saying to him ” when does this have to be completed “. Everyday in the markets I feel a little more confident and familer and one day I hope to turn a corner and overcome some of my fears and just take the next trade because I respect the market and have done my work. I will measure twice and cut once.

The Observationalist Bear vs. The Antagonist Bear

Why is it that our society has become so antagonistic?  I was skimming through news/op-eds and I admit, even our own HFL blogs, and I caught myself off guard by how antagonistic I have become.  I would refrain from calling it skepticism, which I do believe can be healthy, if not, necessary, when filtering through the scores of information out there in the world.  The antagonist, unlike the skeptic who is simply being cautious, is quick to attack whatever is being heard or said regardless of what he/she truly believes.  In other words, the antagonist argues merely for the sake of proving others wrong and being right himself/herself.  This concept is completely applicable to market sentiment: the bears vs. the bulls.  All bears are not pessimistic Dr. Dooms.  In fact, the “true” bears, are those who are observationalists.  They examine the data that is out there first and then attempt to draw their own conclusions on the direction of the market.   On the other hand, antagonist bears are those who decide to be bearish just to spite the bulls, and then hunt for data to back their thesis.  It’s like in any honest scientific study- never “work” the experimental data to make your hypothesis appear to be correct.  I want to be careful not to go from the skeptic that I’ve become on this desk to the antagonist.  Please, start with the facts before jumping to conclusions.