Friday, September 26, 2008

Friday Notes - Closing the "Trade"

11:39am I've continued to keep the powder dry for the most part today, although I did go long on the post-open barf TICK reading (see chart), taking it out on the move back toward zero. That's typically a pretty strong play, and I took one quick risk-protection scratch before immediately re-entering. The sequence was a bit trickier than normal as Bush was about to speak, so you had to be nimble as immediately after ES made its 8 point climb off the TICK low, it gave it all back in a heartbeat before making another push. If Bush hadn't been speaking, I may have gone heavier.

Other than that, I haven't been too interested as the market has simply been chopping back in forth reacting to any bailout news traders can get their hands on. I'll take normal non-news supply & demand patterns, thank you.

The VIX remains on the rise heading into mid-day and who knows what will happen in the PM as folks cover positions ahead of the weekend. Gaps of 20-30 ES points have been the rule lately (boy is it nice to be in cash every night), and it would seem we're lining up for another one -- either way -- on Monday if less-than-stellar news breaks over the weekend. As an aside, it would be nice -- from a trading perspective only -- if we eventually see one more bona fide capitulation as we did on the 18th, but that's just bar talk as I have no clue and just care about the next high-probability short-term pattern.

1:34p Pretty decent scalp rhythm and pace on the 12:30pm - 1:30pm climb. Been nibbling on the long side with the 1- and 5-minute trends in play. Looking for one more sharp pullback to entry for scalp if ES pulls in toward 1203 (now trading at 1206). Certainly don't want to get too aggressive on a Friday afternoon though -- you know how I despise Friday draws.

1:42pm ES climbing that wall of worry without me. Took the early scalps, but passed on the higher-risk ones. My price or nothing, and I can live with nothing. Now interested in ES near 1206.

1:59pm OK, took 1206.50 to 1207.50

2:04pm Long 1204.75 for a couple; will take it out fairly quickly.

2:05pm Took it out 1206-07.

2:25pm Underestimated that run, but keeping it close to the vest on a Friday PM.

2:30pm Geesh ... not looking as dumb now.

3:02pm Interesting afternoon in that it's a pretty fertile scalping market, but I'm keeping things tight in terms of sure profits and not trading every move. i.e. taking .50-1.00 when there are often quick 2 pt moves. The chart shows the nice 5-minute trend pullback around 2pm.

3:47pm Quite the whip-o-matic into close as it looks like shorts definitely afraid to hold over the weekend. Did some light scalping, but nothing significant. Definitely sacrificed some gains today, and wouldn't mind having a mulligan on the 3pm temporary barf again. (Get over it Don.) On the positive side, I didn't get caught in the end-of-day short cover stampede ... that really would have ruined the weekend.

OK, on Monday I said my goal was to get back in stride after consecutive draws on Friday & Monday, even if I ended the week with a modest draw, and we'd look at the week as a single trade. Turns out the "trade" was still able to increase the chip stack by $28K -- with the five "hands" playing out as -11, +12, 0, +17, +10 -- which all things considered including Monday's draw and deciding to scale back heading into the final days of the quarter, is an acceptable -- albeit not stellar -- result.

Which leaves us with two trading days left in the quarter and 96 calendar days to the finish line.

Snow will be here before you know it.

Let's hope the Bamboo can withstand the cooler weather. I'm bringing it indoors on December 31.

I'll post again over the weekend. On Saturday morning, I bring Grace in for her 60,000 3-hour check-up and will have some time to kill.

3 comments:

Eric said...

Don - A couple random things.....I searched for 'Chinese Bamboo Tree' on google after reading the blog entry & found your blog entry on the first page of google. Looks like you're a web entrepreneur as well as a trader.

I too have an E46 3 series....2002 330Ci that I bought in Philly (I live in Oakland County, MI) as a certified pre-owned a couple years ago. I love the car and, all things considered, its held up really well. I put 70k miles on it (I bought it with 30k) & it still has the original clutch so I can't complain too much. Although, I swear that the dealer has some computer algorithm that rounds all repairs to $500 or $100 and then adds a few dollars & cents to imply accuracy haha

Eric

Don Miller said...

Too funny Eric. No logic to the search engine I guess (nothing that I did of course).

Yea, Grace had about 46K when I got her last year and just ticked 60K. They told me "this is the big one" and I should expect $800 or so. Best car I've ever had without a doubt ... and I like the E46 series a lot better than the new models which look a bit plastic to me. Plus I don't care for the rectangular dashes in the new ones.

Don

Eric said...

My car has been great, except I had an issue with the steering that would have been about $2k. I ended up getting it covered by the BMW CPO warranty.after some 'negotiations'.... Michigan roads are awful & full of pot holes so its sort of like off-roading @ 75 miles an hour sometimes.

All things considered I have been very pleased with the car. When this one dies I am either going to get another CPO one or go over to Germany to buy a new one, as they give you 7% off the price & you can have them line everything up for a vacation. They even handle insurance & licensing in Germany and ship it back to your dealer.

I had to tell my girlfriend we can't get a dog, because that would require me to get a new car and I dont want to do that yet. She wants a St. Bernard & Great Dane and they won't fit in the E46 haha.

Regards,
Eric