Have we bottomed?

I doubt it. My take is that powerful people in the banking industry have successfully persuaded government that we can keep pouring good money after bad into our toxic waste dump known as BAC & C so that we can pretend for a while that they can survive some stress (haha). So, the latest "details" from our friend Timothy will merely prolong the pain.

In any case, I came across a website which can tell through artificial intelligence whether we have bottomed at any one time. Check it out! http://isthisthebottom.com/

Did make 2 trades but back to studying

Hi,

Well I did make a couple of real trades during OE expiration last week. I bought a qqqq call earlier in the week, which expired worthless. But on a positive note, on Friday I bought a couple of BAC calls right before the mid-afternoon rally took off, and doubled my money (wohoo!). See my posts in the wallstreak forum. Unfortunately I was not playing with a lot of money, so it was mostly a psychological win.

In the meantime, I am back to studying. I feel that our 2 toxic banks (BAC and C) will be nationalized soon, apparently some announcement about the latest bailout plan is coming Wednesday, and if the government does what it needs to do, there could be a huge rally afterwards.

Thank you Tim Geithner for an easy trade

Am I still working on reviewing my trades? Yes. But today I allowed myself to papertrade the Tim Geithner announcement. I did a bunch of things correct: 1) waited until after the announcement - don't be in a trade during the announcement , 2) waited until some time after the initial announcement (to avoid some of the whipsaw right after the announcement), 3) entered a short of BAC shortly after it broke resistance (used 6.00), 4) trailed my stop down, 5) declined to add to my position (of 10 puts), just in case it reversed on me, and 6) declined to follow 1 minute charts and get scarred out of my trade on little reversals, stuck with 5, 10, and 15 minutes instead. At the end of the day I am up $200 with my puts. I decided to hold overnight - that may not have been good but we'll see in the morning. The nice thing about the trade today is that Tim made it easy - the market reacted so bad that I didn't have to worry to much that my stock (BAC) would make it back up to resistance. The BAC chart is starting to look like the Lehman brothers charts, as John Carter pointed out in last night's free video.

Review or Bust

Ok I'll admit that while professing to review my trades I have gotten diverted by other more "pressing" things, such as tweaking my son's wii, immersing myself in work, and other things. I've even managed to regular read WSJ and the IBD newspaper. Time to face the facts, and this week I will review at least some of my trades, and makes some sort of post here. BTW as I write this late Sunday night / early Monday morning, it appears that we could be headed a lot lower again. However, I won't make the mistake I've made before, and that is to put in some sort of a market order for Monday morning based on the news right now, because it could change a lot between now and then, and because I don't want to contribute to amateur hour.

More Study

I'm taking time do serious study and analysis. I'll be getting to the analysis of my trades soon -- for now I am studying overall guidelines / principles. It seems that to become a good trader, you need to consider each trade a small "bet" and not hold to any preconceptions of what will actually happen. You expect to lose a certain small amount and set your stop and maximum loss BEFORE going into the trade. You place your best bet based on a setup, and move on, win or lose. The more you rely on things like hope, emotion, feelings of "it should to this", the more you will lose. You can't control the market, only your own (small) bets, and your own reaction to it. If you can cut off your losers quickly, you can survive even on a small % win ratio. It also helps to have a set of rules / indicators etc that are objective, not based on emotion or how you "feel". Most analysis / homework is done after the markets close, to keep objective. Some people I consider models are: John Carter, Bo Yoder, Linda Raschke. Good trading is non-emotional and should appear "boring".

AAPL - will it lead us lower?

I am still in study mode, but this Steve Jobs news is disconcerting. The thing about cancer is that while it can be in remission, once it comes back, health can deteriorate really quickly. Tonight there are articles that the rest of Steve Jobs' pancreas may need to be removed. That doesn't sound good. While the "skinny Steve" trade has been around for a while especially to those who follow trading sites, tommorow's morning paper may cause a lot of regular people to sell their AAPL in a panic. In the after hours today, AAPL was in the 70's, busting through the previous support level of about 80 to 85. Then again, the more I learn about the stock market, the less I try to predict us, hence the question mark in the title of this post. Time to get to bed so I can get up early to see the open.

Study & Review Mode

Well the end of 2008 came up too soon. It doesn't really feel like 2009 - more like the 13th month of 2008. Even more importantly, I haven't yet sat down to analyze what worked and what didn't in 2008. I also need to develop a strategy for 2009 and beyond, as others have done (e.g. see Market Monk's blog). I've put a hold on any trading (real or paper) until I analyze my past trades. I need to go back and see what worked and what didn't - analyzing individual trades as well as charting my own performance. It is going to be pretty depressing and not fun, but I need to do it. Apparently, many if not most traders do not review their trades and as the saying goes "those that do not learn from their mistakes are doomed to repeat them." So, while analyzing, I may not post for a while, but once I finish, I will have several big posts.