My Little Dutch Boy

Well, that was interesting... futures broke the morning support and we got a big flush down. Yours truly just loaded up on some EWZ short. The rest of the day was pretty boring since everybody was waiting for the voting in the House to go on. We got C-SPAN on half of the TVs instead of CNBC (CNBC is pretty crappy sometimes, and this was one of those times). The speeches before the voting... honestly, not inspiring and I don't think they helped the cause at all. It started out as more ayes than nays but you can kind of see the nays start creeping up. Right before the nays caught up to the ayes I loaded up on EWZ again. It was a pretty good entry since futures was holding a steady ceiling and I wasn't really risking that much if the votes start to swing back the other direction. Sure enough, the nays overtook the yays and people can tell that this bill is not getting passed and it was just like the little Dutch boy pulling his finger out and we get a complete flood gate. I got some really nice prints at the close as well even though I should've done a lot better still with some of the imbalances, etc.

I'll admit that government or civics is not my favorite subjects in school, but I did learn something today. We didn't really know or remember how many members are in the House of Representatives but our pod quickly found out it was 435 so the magic number was 218 if this thing was going to get passed. I thought of a video that I'm sure we all watched when we were younger, so here it is....

My Expensive Nap

I overslept on Friday... big mistake. There were some pretty simple set ups and I know I would've made at least a quick $10,000. I went to play sand volleyball w/ James until about 9, 9:30pm and went to bed about 10pm but my sister and my brother in law was in town b/c of the whole Hurricane Ike mess and they woke me up about midnight. I had trouble falling asleep until about 3am since I was naturally excited about the next day.

I knew I should at least came in and I managed to bang out what used to be a pretty good day for me, plus I knew we were going to have an office wide happy hour after the close if we finish the week w/ no down days as a firm overall. In fact, our firm broke a few records as well. Gosh, I don't even know how much cocktail shrimps and mojitos I had that afternoon.

It was quite interesting when someone sitting behind me was talking about the whole government bail out situation at the UT vs Rice game on Saturday. The gentleman's remark was that it's not right that the government is bailing out all these rich executives. I wanted to throw my 2 cents in but I didn't... I didn't want to cause a scene.

Here's what my thoughts are... should the gov't bail out these companies who took on excessive risk and now you have a moral hazard situation where you might actually be encouraging people to take on excessive risk? Yes and no. I don't think the gov't should bail out every company that is about to go out of business, but if the result of that company going out of business will thoroughly rattle the financial market and people's confidence, then yes it should be bailed out. It makes me nervous whenever I hear the phrase "too big to fail." Who's to be the judge of that? I do have to say, if company like AIG or god forbid GS went on... then yeah, we're going to be in big trouble.

All this stuff on banning short selling etc is all very REACTIVE. There needs to be a PROACTIVE approach. Yeah, I know that hindsight is 20/20 and nobody has a crystal ball but the gov't has consistently wait for something to blow up and then figure out how to put out the fire. b/c of Enron we now have SOX 404, which still didn't get the problem solved b/c you have companies reporting something on their balance sheet that's dramatically overvalued. Greed, in this case, is not good. There's been a lot of talk about regulating the hedge funds ever since I started taking accounting classes but I'm almost convinced that we're not going to see anything done in that area until a series of them start blowing up.

It was kind of funny that TV stations were still running AIG ads on Monday but the ads were yanked by Tuesday. (We have CNBC on at the office all the time; you notice silly things like that). One ad in particular, there are bunch of kids together talking about their parents not properly planning things financially and finally one kid said "my parents are with AIG" and the other said "you parents rock!" My buddy and I were at some bar getting ready for Monday Night Football and the ad came on; that's when he said "your parents are fucked!" There's also jokes of changing the AIG sponsorship logo on the Manchester United jersey to the U.S. Treasury seal. I'm not trying to be insensitive; sometimes you just gotta learn how to laugh.

I'm shorting the dollar by longing the Euro (143ish entry on FXE) and long oil since commodity prices are positively correlated with the strength of the dollar. A lot of these oil/energy companies that have been taking a beating might have a nice rally. I've also got a list of regional banks with high short interest and high trading volume... there's too many to list at the moment. There's like 120 on the list that I've generated. If anybody is actually interested I'll email it.

My Momentum

Another very solid day on Wednesday. I took two losing trades at the close where the quotes are a little out of wack. I actually didn't get the closing print instead someone just hit my orders and I got owned in the face. If that hadn't happened, I would've set back to back personal best days. I finished the day maybe $100 shy of the record I set on Tuesday.

Today was just equally crazy. VIX went up above 40 and actually went past 42. For those of you not familiar w/ the VIX it's kind of a measurement of volatility. SEC has put in another rule on short selling so I think there were a lot of stocks getting short squeezed at the close. I should've long a whole bunch of EWZ but one of my trailing stops was just a little too tight and I got stopped out and never found a good entry to get back in.

I got some crazy ridiculous print for some crazy amount of shares and in my panic I covered and I just kept getting some really favorable prints all the way to the close and by the time dust settled I have set yet another personal best about SIX times the amount on Tuesday. I don't really like to talk about P&L here, in fact, I don't like to talk about P&L period. It just makes me negative. My parents don't even know how much money I make (or lose sometimes). They would try to coax it out of me sometimes and I simply refuse to tell them. Some of you are probably thinking... well, yeah, it's easy to make six times of $10. Let me assure you, it's not like that. I still don't feel very comfortable talking about the amount, but let's just say it definitely involves more than 5 figures.

This is usually how it is for me though. I'll set a personal best and I'll trade right around it before going back to my regular P&L days. I'm just trying to maximize this momentum right now and kick some major ass before this craziness go away.

I was at a Texas Exes Young Alumni happy hour event at a wine place and I tried to find this wine that I had on the flight back to Taiwan on EVA Air. I knew it was a German Riesling but b/c it was German I didn't really remember the name. Well, I managed to track it down and the wine place had just one last bottle left so I asked them to hold it for me. I picked it up to celebrate and treat myself a little for good trading and sticking to my rules lately. My sister was also in town since they still have no power in Houston after Hurricane Ike and she's been obsessing about the wine as well. I might try to find out where the vineyard is. I really love this wine even though it's borderlining the too sweet side

(Sarah, I know you read this... help a brother out)

My Triumphant Return

Man, after yesterday's technology fiasco where my computer was FUBAR and I can't see squadush on my monitor I was still fuming a bit this morning so I went out to run this morning. I then promptly remembered I hate running but at least I was feeling better.

Everything went pretty smoothly. We got first some bad quotes from INET and then ARCA went bad later after the fed announcement came out. I tried to slam into EWZ right when the announcement came out but I couldn't get the price that I want. I was fairly light on the shares since I can't rely on the quotes too much and my level 1 was off so I had to modify all my stop triggers. I still could've traded EWZ better especially the break out after the bounce but I felt I was chasing a move that's already been made and not a very good risk reward. I had some orders at the close that I put out too late and I ended up not getting some prints. Traded lots of shares again today. After commission I think I still did make a new personal best.

I signed up for a trial subscription of the platinum briefing trader where you get to see some of the trades people make and what their logic is. The one trader I'm following at the moment is the Scalp Trader. This guys is pretty right on and his logic makes sense. It's nice to have an extra pair of eyes. However, sometimes he's risking more than what I would and I personally don't like to base my trade off of someone else's opinion. I think I took some positions in related companies if he was calling out a trade and they work out pretty well.

Oh, FUBAR stands for f**ked up beyond all recognition btw. Ref: Saving Private Ryan

My Black Monday

By black, I mean what I see on my montage this morning. Oh yeah, and the market dropped 500 points, LEH declared bankruptcy, etc etc.

It is absolutely infuriating. Never had I have to restrain myself so hard from breaking stuff. David was in the office today so I went back to trading at my station. I was expecting my computer to be slower compared to David's (my CPU is about a fourth of his) but honestly the worst it has been is that I get my charts to update a little bit slower. I can't see any quotes, none of my charts would update and I can't tell if my stops really did go off if they get triggered. I restarted my computer. Twice. I closed down applications. First ECN cross, then I closed down Skype, then Einstein, and finally all internet browsers. Basically I lost half of the ways I look for trades, I lost communication with my team, then my bread and butter EWZ and EEM trades, finally I have nothing to alert me any updates if news was for or against my positions. While most people were up over a G I'm restarting my computer for the third time.

What pisses me off even more was that I was getting back filled when I don't want to and not getting filled when I need it. The first time my stops went off I thought I didn't get filled so I manually exited out of my position, only to find that I in fact did cover that position for a small loss except now I've reversed my position and losing money on that as well. This happened again where my stop got hit and I thought I would get a back fill again but I didn't... which leaves me to to try to trade out of the position. It happened again for the third time, except this time it was a trailing stop for only 1/3 of one of my positions so I didn't mind as much. Sure enough about a minute later it shows on my blotter that I did cover the position.

You might think a minute is a brief time and not a big deal, well, in what we do even a millisecond can get you a gigantic advantage over somebody else. A good deal of our edge comes from execution.

I almost hit my loss limit. I was prepared to throw a fit if they did turn me off for the day because the loss wasn't b/c of my poor decision making or lack of discipline. I spent the entire day trying to make it back and thank god I did. All I lost today was my commission charges and I have no idea how much that will be since I traded about 3 times as much as what I normally do. I'm still just absolutley fuming right now with all the loss opportunity when my screen is practically blank and while my computer is rebooting... except I'm mentally exhausted from grinding it out all day. I might take a break and then go run or take it out on the punching bag at the gym.

ARGH! FRICK! DOUBLE FRICK! FRICK ON A STICK! FUDGE! FIDDLESTICK! CHEESE AND RICE!! AAAHHHHHHHH.... I'm just so pissed right now.

(on the plus side, I did find out that I was in queue to get a new computer w/ quad CPU maybe by the end of this week)

My Ageless Question

Ok, the title might not make a whole lot of sense and I'm probably just trying to be too cute w/ words, but as my birthday approaching I find me asking myself: "what is old?" It's a question regarding relatives and absolutes, but the question is still there... what is the standard and who sets it.

I met w/ a contractor yesterday to discuss renovation for the condo we owned since I was a freshman and while we were chit chatting he commented that I sound very young on the phone and he thought I was in school. I thought it was kind of funny given that the realtor has also said that I sound young after she called me and heard my voice mail.

To my friends that are still in school, I'm a freaking dinosaur but to I guess people that have been in the "real world" for a while I'm still just a little tadpole. Anyway, I don't feel old, and that's all that matters right?

My Whole Lot of Bark, Not Much Bite

So Hurricane Gustav really didn't do much damage, even the helicopter inspection out on the gulf showed that the rigs were ok. There might be some distribution disruption but I really don't foresee a major effect on oil prices. Although, I do have to say that I think oil prices dropped too much too quickly and it makes me a little uncomfortable. I took off some of my positions today in ENER, LUFK, KOL, GMXR, HK, ARD, FWLT, and PTEN. I covered my CEO position short too quickly. It was my largest short position and I've been losing a crap load on it... stupid Chinse ADR. I think I only end up making 60 cents on this. I just don't really like how it'll gap up or down 5 points depending how it did in Asia. There were a lot of other stuff that I didn't get in or I wished I took more shares but really, I think I did the right thing in not risking too much capital on one idea.

I think it was Morgan that came out with the downgrade on DF today. I almost had to laugh when I read the news since that's what I've been hoping for since last week after SAFM and SFD's earnings. Let's see if we can get a few more of the herd to join.

I'm really a little surprised on what kind of prices some of these home builders are trading at. Is the housing market already rebounding? I bought some TMA at 40 cents. Normally I don't like to pick bottom on these low dollar stocks but honestly even if TMA goes bankrupt it's a good risk reward. I'm sure there are still a lot of questions that need to be answered. CNBC won't stop talking about how XHB is the best performing sector lately... makes me want to short it just to spite them.

Gold and Silver is breaking down... hopefully I can still find some mining companies to short.

Three more hurricanes forming in the Atlantic. We'll have to see how much impact they have.