Analysis
Shine's Thoughts on the Market 3/4/10 - 6/23/10
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Right now, we are trading almost exactly halfway (1086) between a top of 1122 and a bottom of 1042 on the spooz � I�ll call it no-man�s-land. I�m figuring that looking at the day to day choppiness can drive a portfolio manager mad. My guess is that we trade inside this channel for the next few weeks, which is a perfect recipe to shake out both the fragile longs and shorts. The way I would handle long positions at this point is by putting in drop-dead stop losses on some of the troubled names, below recent lows (if they are not that far away).� For example, if we are long X at 44, put in a stop below 40, which gives a defined loss and 30 points to the upside.� The $100,000 question is, is it worth it to hold for those extra 4 points? My opinion is take a step back and evaluate the market from a distance. I would sell into a strong rally or at new lows and try not get that shaken in-between. Enjoy the summer!!
Trading recap 6/23
It was very choppy trading today, and the chop continued through the Fed decision and into the close. I made some $ in GAIA, selling my overnight long on a rally.� My best trade of the day was in BTU which I recognized as a standout strong/long name and bought it when the market pulled in. I barely made $� in it, but to identify the trade, call it out, define my stop and loss, and confirm my thesis is correct, is priceless.
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Posted by Shine - Momentum Trader on Jun 21st, 2010 5:43pm
The EURO strength play showed up again this morning after China said, over the weekend, that it would loosen the Yuan's peg to the U.S. dollar and allow it to become more flexible. FXI, up 5%, and BIDU, up 4%, along with metals and miners, led the indices higher to start the day. A sell-the-gap-up-and-short-on-rallies thesis became the prominent play for the day. I personally shorted some gold names on the 1st sign of sector rotation out of the precious metals. Also I recognized the weakness in some Nasdaq names like GOOG and NFLX, shorting some NFLX as high as $124.72 and sticking to a short thesis on that name for the day, for a gross profit of $553 in the name.
I uncharacteristically sold some naked PUTS this morning on a gap up, when I usually short them towards the bottom for better pricing. I covered most of them by midday for a small loss, but I will be on the hunt for some good spots for PUT selling. I bought some puts and sold some calls on AUY (both a long bet) for a small profit.
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Posted by Shine - Momentum Trader on Jun 15th, 2010 1:05pm
This morning I was not that particular (negative sniper mode) in trade selection. During the market open chop I got stopped out of both my longs and shorts. Made some quick $ on IFLG, then I got the wrong price both short and long in CAGC. Came late to the party on BBY then I finally got a 1000 share short at a good price and chopped it out instead of letting a winner run. ARGGGHH!!!
VVUS was my short thesis right from the open, where I got stopped out 3 or 4 times before I shorted 1700 shares for my best positive trade of the day. Then I got re-short the same name and got run over by not minimizing my loss right away(even though I tried and did not get the fill!!), just for it to pull back in shortly after my cover.
I will meditate and polish my ninja skills for the afternoon session.
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Posted by Shine - Momentum Trader on Jun 14th, 2010 7:18pm
I accomplished my trading goal today not only on a PNL level but in a control aspect. On Monday after a busy weekend a trader can come in too aggressive and try to take out more money than the market wants to give. Bad idea!!! Motto: �The market will give what it wants to and not a penny more�. I give the example of the many traders I�ve seen try to reach the goal of� +$1000 being up $950 and end the day only up +600(a terrible risk reward!!).
My control today allowed for me to stay small until I saw a trade developing in SNDK to the long side. Using small size (300-1200 shares) I used my sniper skills to buy pull-ins and sell rallies. Even in a small range on the stock I was able to gross +583 with very little risk to the downside. I posted my trades on the Hedgefundlive.com website and received some positive feedback from our member community which is inspiring. Again being controlled I sat on my hands till the close where I grossed another $200 to pay for dinner.
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Posted by Shine - Momentum Trader on Jun 11th, 2010 9:16am
We gapped up after a total meltdown at the end of yesterday�s session. The bounce in BP/Oil/Energy and some unfamiliar support in Europe gave us a strong rally to start the day and followed through straight to the close. I did not trade much today (technical difficulties) but my bullish options book performed well. I am short some naked puts in USO, DELL, MSFT, ATPG, and others with eight days until expiration. Goldman shares still struggled today, but I feel it may join the rally soon if some of the bad press clears, and if it does, the shorts could feel the squeeze especially with earnings season around the corner.
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Posted by Shine - Momentum Trader on Jun 7th, 2010 8:19pm
The market is trading with an eerie tone from a momentum perspective. Stocks seem too cheap to short at these levels, and if you go long or try to bid bottoms we seem to be forming new lower lows daily.� I still believe that, in order to start heading higher, we need a whoosh down, and then we can start building a foundation to begin squeezing the shorts. An orderly sell off is no recipe for a V-bottom. �Individual stocks are approaching or violating support �levels not seen since 2008/09, which creates more selling and margin calls. It also feels like there is some negative news still lurking on the horizon.� Could it be a European default (sovereign or bank), contagion to other regions, or the annihilation of BP/RIG?
On a positive note, it�s beginning to feel like sentiment is building heavily to the short side, where the crowds usually get proven wrong.
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Posted by Shine - Momentum Trader on Jun 3rd, 2010 10:56pm
I caught HOV and BBX to the short side for a profit of $1400 on the day. I spotted and announced those 2 standout short trades pre-market in Shine's Power Alley. I also identified the short opportunity in CWTR right from the open, but did not pull the trigger fast enough. My overnight positions in�DELL and ATPG also helped my P&L. I took another small long position home in DELL on privatization rumors, and a small long in HOV(unplanned).
I hope our community enjoyed my Thursday educational piece entitled TRADING PSYCHE AND THE KILLER INSTICT!!
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Posted by Shine - Momentum Trader on Jun 2nd, 2010 11:03pm
Today was not my type of trading day being a slow bleed up, but this was the 1st real day towards a bull market confirmation. I look for 2 more positive days where we grind higher lure the shorts in and get them running for the hills on a sqeeze. Also we were up today on basically no news, at some point the news tides will turn to positive and when they do we should be off to the races. I did add to some of my naked put selling and also sold a calander put spread today for the 1st time here at hedgefund live.
Shine on!![View Comments (2) / Add Comments]
Posted by Shine - Momentum Trader on Apr 19th, 2010 9:43am
Americans have learned to ride a financial�roller coaster�on a daily basis. �It has been extremely difficult to stomach the ups and downs of the stock market over the past 15 years, not to mention�we have�barely survived the real estate and internet bubbles. But most depressing of all, �it seems that we cannot even trust the neighborhood�loan-shark�dressed up in a mortgage-lender's garb, or our country's bankers, disguised in�their�3-piece�suits. When will we be able to avoid a bait-and-switch salesman, while deciding how to proceed with our prized financial future?
On a personal level, I have seen numerous examples of close friends that have been defrauded by attorneys and multiple real estate developers. In one case, an attorney posed as an agent of structured legal settlements, and fraudulently fabricated and�notarized�full cases and documents, in order to steal from unsuspecting investors. I was very distraught and�disappointed�in that case and in society until I saw one of Florida's largest law firms do the very same scam, for 50 times the�amount,�to other shark-bait investors. In my 12 years on wall street, I have also seen multi-million dollar insider-trader cases, only to be�overshadowed��by the record-setting $65 billion dollar ponzi scheme by Madoff, just 2 years ago. How will investors ever regain their confidence in handing money over to money-handlers?
This topic reconfirms my place at the TFGtrading matrix and solidifies my decision to leave a very lucrative trading�position�to join this all-star team, with a brand new refreshing mission. When the topic of "full transparency" was first discussed it was a tug-of-war in my mind, if it would work, were�we to show every trade we make? Now, after Friday's Goldman Sachs fraud charges, I don't think there is any other way to embrace the world of investing other than with "full transparency". The world can now log�in to�our hedge fund and see every one of our trades, from millisecond momentum trades to month-long position strategies. There will be no gray area or ambiguity�on our stats or models. This is a breath of fresh air for me and for America's financial future!![View Comments (0) / Add Comments]
Posted by Shine - Momentum Trader on Mar 4th, 2010 6:55pm
In review, today was choppier then I expected with not much follow through to either direction in the stocks I was trading (STP, ERTS, AMR, IMAX). Today was the type of day where many names reverted back to their mean or VWOP. Rallies in these names needed to be shorted when they looked like they will break out to upside and bought when they looked like they were going out of business.
I had 3 positions that had large potential, but traded them amateurishly instead of with my usual aggressive prowess. 3300 ERTS that I covered flat instead of making a quick 15 cents, 1500 IMAX that I covered early taking in $150 instead of$500+, and long DLM that I took 5 cents out of instead of half a buck!!!! Frustrating!!! The worst part about it is that I did not use critical information contributed by my colleges at TFG Trading Matrix which would have assisted me in staying in my position and getting PAID!! I will get comfortable.
There will be another fight and I will be ready!!! Will you!!!
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Very Helpful Insight
Very interesting perspective, and a good example.