Friday, August 22, 2008

Friday Notes - Hold the Phone

8:11am Ugh. (I assume the blog blocks swearing.) Shaping up to be one those days as I got caught short on the 7:40am DAX 45-point spike on fairly decent size. Talk about an early and unwanted wake-up call. Funny thing is I sensed the spike might happen as it was shaping up while I was providing liquidity, yet still walked right into it. Of course, right before that I received a disturbing phone call from home (nothing major, just a nuisance). Coincidence?? I think not. The better news is I was able to cut what could easily have been one of those "ruin the weekend" losses by a whopping 2/3 by refocusing immediately, covering on the first retrace, nailing the second spike on waning momentum, and covering on the second retrace.

Here's a pic, with the unshaded circles reflecting my approximate initial short entries, and the shaded circles reflecting my covers:

OK, so the comeback mode feels "real" for the first time in a while. It was like the band was playing the waltz for much of the week, and then all of sudden transitioned to the Mamba. Such is life as a liquidity provider. As I mentioned yesterday, it was likely going to happen when no one expected it, and the Friday Globex session has provided the backdrop ... at least for the time being. Immediately going into EESM mode for the rest of the day. Bernake speaks at 10am which might create some opportunity for the focused. Will go dark on the blog until noon.

12:31pm Been doing some heavy ES scalping in EESM mode, but am still slightly off my game. I did let ES trade without me at open again, and this time it kept me out of early shorting trouble. Immediate goal is a getting close to a scratch on the day, but the entries have to be cleaner ... somewhat doubtful heading into a summer Friday afternoon. Got a solid week and month going, and need to keep it that way.

Note to self - Another good example of how irrelevant "daily goals" are. Let's say I had a stupid $1K daily goal ... I'm probably down $6K-$7K or so now -- not sure of the exact # but I do know I'm pretty pleased with where I stand all things considered -- so I have two choices: (1) Try to find $8K from on a day where I'm slightly out of rhythm and likely turn the $8K loss into -$20K; or (2) pick spots and book the day's result without much attention to it and wait for Monday. Yea, so the French guy is ahead on the current relay leg. Big Whoop. The wall gets touched on December 31.

1:23pm Definite change in volatility/pace today. Some shake-and-bakes on the midday turn that I definitely could have traded better.

2:43pm Finished my last scalp of the day on that last push. Was a clean entry and solid exit at 91.50 into the retail thrust. Overall, a nice comeback and we'll call the P&L a scratch at a $3K loss. (ES trades were actually green.) I guess I've pulled about even with the French guy heading into Monday's leg ... or maybe he's a German DAX trader .

An interesting but OK week, with most of the chips increasing on Wednesday & Thursday:

But we know the drill though in terms of the only chart that's relevant, and there will be no problem focusing strongly after today's action.

19 weeks to go. Then we'll see what all this means.

I'll post more thoughts over the weekend.

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