April 25, 2007-Avoiding the Party

Here I am: I rented my tux for the prom, and I miss my ride to get there.

I was predicting that the S&P futures were going to hit 1500, so why did I not participate?

We had a S3 and recent history has shown that with the S3 there several days of weakness afterwards. I failed to see that with the S3, a breakout rally is possible if the highs are broken.

Psychologically, I am leery of trading here because of the heights. But do I trust my system or not?

I have to look into options trading again. If I was short a put or long a call, at least I wouldn't have the regret that I have now.

April 24, 2007 - Tried to Buy the Dip

I tried to buy the dip today, but my bids were too high, and my stops were too tight, and I was stopped out on 3/5 of my position.

My bids were: 1486, 1485.50, 1485.25, 1485, 1484.75

I had 5 pt bracket orders. The low was 1480.25 which meant of course I sold the low there.

My idea was correct, but I did not give it enough breathing room. In retrospect, 1480 was the level to protect on the chart.

If I am unsure about the levels, I should spread them out a little more liberally.

Lesson: PAY ATTENTION TO LEVELS

NAV: $1,007,429

STUPID, STUPID, STUPID

Everything was lined up. We had a low intensity S1. This set-up has been a LINE IN THE SAND set-up.

I was supposed to be short below 1482 and long above that line in the sand. But because I did not set my configurations correctly in IB, instead I was short all the way up to 1489 from 1479.75.

UUGGGHHH!!!

So I ended up with a $7k loss instead of a $3k profit.

Well that's why I am doing it in the paper-trading account.

Liquid Sky

There sure is a lot of liquidity out there!

That is the lesson of the past two months. Just look at China. Shanghai had an 8% drop which kicked the selling off, but now its at new highs. The press was and is still beating the drums about how sub-prime defaults spell doom for the US consumer, and yet the Dow and S&P are closing near new highs on the year.

Fremont and others have had their stocks decimated, and yet within two months they have found bidders for their toxic sub-prime portfolios.

Quite simply put: IF YOU SNOOZE YOU LOSE. Its not like 2002 when you had all the time in the world to bid for damaged goods.

My hypothesis still stands: China is the fountain of liquidity, and we're going to keep rocking until 2008.

April 17, 2007 - Buy the Dip

After yesterday's breakout rally, we have a S4. We are clearly in a BULLISH regime, and we are likely to remain so for a while. We are transitioning from skepticism to embrace.

Based on recent patterns, I played the rally using the BUY THE DIPS strategy. With RSI so high, I didn't expect a lot of upside. I was lucky having been filled on two of my three bids at 1472.50 and 1471.50. The low overnight was 1471.

CPI came out and I had an instant profit of 5 pts per lot.

NAV: $1,015,738

We are squarely on target this month.

April 16, 2007 - Dick for a Tick

My call was for a breakout, classic CLIMBING WALL OF WORRY trade. When we keep breaking new highs in a string of S3, then it is a compressed spring that will keep going until we get some S4s and S1s.

So why am I UNHAPPY? Cuz I was a DICK FOR A TICK. I had the chance to lift my full allotment at 1463 but instead I put in a limit at 1462. As you can see, the market has hit a high of 1471.

STUPID, STUPID, STUPID!!!

As I have learned with baseball, your swing can be perfect one day, and totally screwed up a few days later. You have to go back to FUNDAMENTALS and do work on tee.

MISTAKE: DON'T BE A DICK FOR A TICK.

If your trade is to use STOPS, the DON'T USE LIMITS.

If I was wrong, I would've lost 5 pts anyway. If I was right, I could've made 8. The logic is simple.

You're playing too safe. But this need for safety is going to kill you. If you decide to climb Everest, you cannot rest or else you'll freeze.

April 12, 2007 - New Lows, then Snapback Rally

We had an S2 yesterday. The recent history has been lower lows with S2. So I played the market from the short side.

I sold 1447.75 and bought 1444. I got off 13 ems, which was pretty aggressive. I have been learning to go for it.

My call was a slide down to 1441. We didn't quite get there, so I bought it before my target. Also, China hit a new high. Not exactly the sign of a weak stock market.

The market ran up after the dip. We are still in Middle Ground, waiting for a mission.

NAV: $1,012,582

April 11, 2007 - Playing the Bounce

I should have been short due to the extreme reading for RSI, 99. But I was uncertain about this signal 3, so I chose not to trade it.

We are still in a weak BULLISH trend, so instead, I played the bounce by buying into support at 1448. I took at 5 pt. profit by selling at 1453.

I was once again too cautious and I only did 8 ems.

We will wait to see how the sentiment plays out.

NAV: $1,010,330.00

Signal 4 Pullback Trade

Big signal 4 rally.
I played the pullback trade today.
Bought @ 1444.75 and sold at 1449.25.
The market is returning to normal.

Problem is that I only executed 1/3 size.
I need to get more aggressive.

$1 Million Portfolio

I am trading the $1 million dollar portfolio paper trading account from IB.
I am trading 15 eminis.

Today, I sold 3 @ 1433, and 3 @ 1434. I had orders all the way up to 1437. They were obviously not filled. So I had only a 2/5 position. That is the problem with these tiered orders.

When I win, I win small. When I lose, I'll be at max size and that will mean I'll lose more than I win over time.

I need to tier my levels much tighter.

I took a profit of 7 pts today. That's pretty good!

I will keep trading everyday, sentiment permitting until the end of the month. After that I will transition to real money.

NAV: $1,000,000