Wednesday, December 02, 2009

Quicknote from a Dolt

I'm feeling better today, even though this was the worst session for me since fighting the tide, beginning last week.

Psychology in the markets is interesting and I have to play my own psychology sometimes. I cannot sit against the trend with conviction and feel good about it; not for more than a couple of sessions. I'd much rather be wrong and make money ;)

Wow, what cross-currents. If I hadn't been such a dolt, keying on the (million or so) toppy signs, I would have grabbed much more of these roman-candle blow-off moves in the growth names (Chinese mostly; but we have all noticed these by now, right?). I did catch a few, which hopefully saved me from the most unpleasant calls which play something like this: "How can I be losing money when the market has been so strong?"

I hate that call, which is why I fire myself from that client.

I also hate firing myself, so I am forced to do things I may not like, or may even think better of (like covering shorts in a blow-off move). But this is how you stay in the game.

I have only so much more game to stay in, so I'm not going to muck it up by standing in front of set after set. For the record, my mistake was not in covering shorts early today. My mistake was in not covering Monday (which failed to follow-through with selling begun Friday). After Monday, I was in front of the trade - not the best method for keeping your energy up and motivated.

Again, moving to the side is a fine strategy (and not used enough around here!), if and when you do not trust the trend.

One of the most interesting cross-currents is the institutional darling tag-team of GS and AAPL. Both exhibit an inability to rise, no matter what the tape looks like lately. I'm drafting a (Trader's Guide) piece featuring AAPL and will post it up later at ES; hopefully tonight.

RINO failed to close above the 2ndary price of 30.75 and I blew it out late in the session today. I know I've led you to believe I'm in love with this stock, but unless there is some good make-up sex in the very near future, RINO and I are over!

In fact, I hate all stocks equally. A healthy trait you should take from me.

Yes, I love a powerful, small-cap growth name that is beasting higher, but I cannot hold faith that such a small, unproven name ever comes back after posting a high-volume failure. Some of the best disasters begin exactly like this.

If I do play RINO long again, it will occur only like this:
-I will only buy that stock above 30.75, or...
-I will buy following a successful pivot (thrash-down + recovery)...
-Or finally, I may make a faith-buy below 25, but bench tightly then on the 50-day (currently 24.02 and rising).
Otherwise it is just another STEC-wreck to me.

Total Position: 1.8-to-1 net-long, 29% invested
Currently Long (according to size): DGW (11%), CML (4.5%), YONG (3.4%)
Currently Short (according to size): AAPL (10.4%)
Futures Accounts: no position

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