Wednesday, February 28, 2007

How I will play this market and Trades

Here are the notes I wrote to myself last night:

Control your emotions. Do not feel the need to make any big bets or predictions. Do not feel the need to make money out of this fall. It's okay to make some bets, but make sure to use a small position size or control risk.

Expect a dead cat bounce in the next few days. The key will be what happens after the bounce.

Do not watch CNBC. I'm cool with reading from sites and blogs of people I respect, but no TV.

Adhere strictly to stops.

Keep it simple stupid. Watch major support and resistance lines. Don't make plays that are in no man's land.

Keep it simple stupid. Narrow the stocks you follow. At this point, only play major momentum stocks and market leaders, index ETFs (leveraged), sector ETFs and one or two stocks from sectors of interest. That's it. At least for the time being.

I already mentioned the QID trade. I bought 1000 shares at $53.82.

I sold 500 shares of CENX at $45.80 for a $920 loss (3.8%).

I sold 100 shares of GS at $207.05 for a $695 loss (3.4%)

I sold 50 shares of GS at $205.24 for a $146 loss (1.4%)

I sold 500 STLD at $37.45 for a $1285 loss (6.9%)

I made two day trades yesterday, along with a short that I covered today.

I bought 1000 QID as it broke past $53 ($53.11) and sold at $54.43 for a $1320 gain (+2.6%).

I bought 400 DXD (double short Dow 30) at $58 and sold at $59.26 for a $504 gain (+2.1%).

I went short 500 shares LEH at $74.93 and covered at $73.60 for a $665 gain (+1.8%).

I am still holding on to RL. I am watching QID, DXD, DDM and QLD (all leveraged index ETFs) closely. Sectors of interest include energy, retail, brokers, metals and other commodities. I am also keeping a close eye on Latin America and Asian ETFs.

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traderray said...

Hey, I thought you'd find this of interest.

IMO, if you're going to trade a "dead cat bounce" stick to the Dow 30. I'm not sure if momentum stocks are the best place to be. What do you think?

I just started my trading journal recently. I've been reading your posts for a week or two, and I like your process of chronicling trades.

The Market Speculator said...

You may be correct, traderray. The reason I am watching momentum stocks is to gauge the market. I probably would not trade any unless they break support or resistance levels. If a stocks like AKAM roar back and break resistance, that would be a good sign for the market.

Dr. Brett is da man!

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