Wednesday, March 21, 2007

Stocks Surge

I can't even begin to explain the frustration and disappointment I'm feeling about how I managed my short positions. I had a profitable trade in DIA, QQQQ and SPY until today. I went negative on my positions this afternoon and took off the SPY's and Q's at a loss. I still have half my DIA's short because it didn't hit my stop. If the dow takes out today's high tomorrow, I will exit the rest of my position.

I guess taking a position into a fed meeting was asking for trouble, but I've learned over the years to live with my decisions and just move onto the next trade. Being long a few oil stocks helped this afternoon, but giving back large open profits on my short trades and turning them into losers is one of the most frustrating things that can happen to a trader. now what? I can make an argument for both the bullish and bearish side. I can say that the we are going back down because we still have sub-prime to deal with and we also have the potential for more unwinding of the yen carry trade. Then again I can say that the long term trend in the market is up and now we should retest the highs.

I'm not sure what to think here, but I'll tell you one thing, I'm not going to argue with this market. I'm here to make money not to be right or wrong.

So far the magnitude of this bounce is leading me to think this is more than just a bounce. The only stocks I am long are the the oil stocks and GLD. I still have some short DIA's left which are against me. I think by the close of this week I'll have a better indication as to where I think this market is going. I haven't ruled out the market going back down, but I'm not going to try to be a hero and hold my shorts. Let's see what happens over the next few days.

I sure can use a cold one right now and I'm not even a drinker!


dps said...

Insead of seeing resistance at the 50 day MA - it pushed through like it was not there. Now I think it will act like support as it retest the highs. Frnkly, the highs are not too far away right now - and we have a lot of momentum...


h. lovil said...

House of pian for us shorts today.

I was a like a deer in the head-lights. Read the Fed minutes, didn't sound that great to me, but what do i know.

cancelled stops and kicked myself later.

Not sure whether to put the stops above the gap you mentioned or just hold on.

We are only a few % short of the SPY highs in any case.

Banker said...

The Fed to the Rescue, Lower rates on the near term horizen

John said...

I think the Fed statement only reiterates what Mr.G said a few weeks back! In my opinion, the current Fed, in trying to take a less hawkish stand, is trying to reverse Ben's testimony to the Congress, without embarrasing him. I think his credibilty is at stake and markets will react like they did last May/June.

Sandro said...

I have an idea. Why don't you just ignore the intraday low of $INDU of 11950 and just use 12050 as a low in the charts?

That dip was only half-hour long and probably was caused by just one large trade and short panic.

Do the same with other charts.

What do you think?

Sandro said...

I have a huge position in T-bonds which saved me today - muted losses from shorts.

It's very strange to see so much money jump into safe heaven and still having even more money to lift stocks.

I think someone was printing money today, because they came from thin air.

chronictown said...

gold seems to be getting ready for the move to 700. imho

sanjay said...

I think this is a short squeeze. I mean everyone was short and all got nailed. Extreme overbought conditions on all the averages. Also, it came down in a rare 5 wave pattern, could do the same from here lower. Decinal pattern calls for a lower low by mid April.


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