Monday Notes - "Vacation" Trade

2:12pm And so the holiday volume has begun to play out as expected, resulting in a very poor and sporadic pace. And you know how important pace is to me. That, combined with my strong focus on protecting the year's earnings, has me focusing largely on my non-market obligations while keeping half an eye on the market.

One thing is certain if you're trading this market ... it's paramount that profitable exits be set ahead of time, as brief spikes to profitable wholesale exits with no second chance may be common in the light volume, and such has been the case during much of today's trade.

As I mentioned in Friday's 2008 results post, I'm going to post my earnings trailing stop daily until the ball drops on the 31st so as not to lose sight of it -- and will do so at the close. My plans to watch from the sideline more than anything else remain entrenched, to both protect the earlier 51 weeks of work as well as to give my brain that much needed mental break. I suppose that's one advantage system traders have over discretionary traders ... the computer never needs a break.

2:27pm Market breaking to the south and VIX on the rise with slightly better volume. Should be one decent pullback short entry or further emotional extension long. Any trades will be modest size at best and will be extremely cautious on longs. Sitting short in the high 863s.

2:44pm Took small nibble 862.00 and covered to 861.25. Preferred higher entry for size. Still sitting in 863s.

2:56pm Better; shorted 863.50 to 864.50 and covered to 863.00. Then repeated again 864.00 covering down to 862.25.

3:00pm Extension. There's the choice, take one trade and hope for extension, or take multiple and scalp each [essentially, scalp vs. swing]. Results often the same and no right way of course. I simply prefer option 2 which pays regardless of whether the extension occurs, espcially when the market depth is tiny as is the case today. Plus, you're on "vacation" Don ... why are you trading?? Trend closes of course make option 2 look foolish ... until of course the extension barf provides the wholesale contra entry or the next morning provides the high probability post-trend oscillation entries.

3:45pm: Took wholesale long 854.75 on TICK divergence and extension from trend supports and closed for final trade.

4:10pm Shorts forgetting to cover into the low volume illiquid drop getting absolutely hammered into the close.

Fun afternoon high % nuggets on a vacation day. And so we'll update the all-important 2008 trailing stop as follows:

2008 Net Gains (after all expenses) prior to today: $1,628,199 (includes slight audit correction from Fri)
Monday Net Gain: $5,122
Updated Gains: $1,633,321

Adjusted Trailing Stop: $1,625,000 (increased from prior $1,620,000)

I'll continue to post closing year thoughts and 2008 statistics throughout the week.

btw, someone on Sunday asked me where the bags under my eyes went and why I seemed so relaxed. I just smiled and said, "It's a very long story for another time."