I spent some time this weekend preparing myself psychologically for earnings season. I wanted to make sure to increase my size on stocks that had earnings. I wanted to be ultra sensitive to unusual volume at given prices, levels of huge interest/struggle and be on the lookout for plays to hold. In anticipation of Goldman’s earnings I forced myself to be in bed by 9pm last night, got up by 5ish, worked out and made it early in the office to get ready for some fun. GS reports and I am ready beeeoootch. Bring it!

Oh boy was that initial reaction just terrible. Seriously, GS reports and crushes their numbers but fails to go up $4-5 on the initial reaction as it normally does. I trade lightly as it wasn’t just ripping, gather some information and notice GS can’t hold below 148.80 or above 150.30ish. GS tries to rally a second time through 150.30 and fails again. Weak. Right before the open it consolidates near the lower end of the premarket range; holding 148.75 but not lifting 149. Weak.

The plan: Short the monkey out of the stock below 148.75 and add on weakness if I saw selling below. If 149 lifts cover that short and try to massively short in the 150.30s with a stop above 150.6. If the stock plows through 150.5 powerfully and with volume I would switch my bias and look to unleash the fury on the long with target low-mid 160s with a stop below the premarket lows.

The play was simple. I was expecting a wide range in GS so I didn’t mind taking the extra risk. I was trying to start core positions on either side and add to them on strength/weakness. The problem: GS got stuck in a dopey $2.5 range. Seriously what a rip. Talk about getting tossed around like a frisbee.

As you can see from the chart, GS lifted 149 right on the open, rip on the premarket short. Then dropped the 148.75 level so I smacked the crap out of the stock and not shockingly the stock was met by the buy the new low program. Rip. The stock runs through 150.5 with fury, so another sizeable rip on the short from 150.30s. The stock is being bought heavily in the pullback around 150.40s so I get monkey long, starts to trade higher, fails to get through 151 even after there wasn’t unusual selling there, and proceeds to tank through the previous intraday low. Big daddy rip. I give the short one more try on the new low and then goes through 149 one more time. I give up. GS 5. gmonkey 0.

I sat there in disbelief just realizing what had just happened. Luckily, I had a couple of other good positions that were feeding the monster. As I glanced at my PnL I was shocked that I was not down that much money considering the size I was trading, but nonetheless I was partying at the bottom of the leader board…solo. I got up, went to the bathroom, washed my face and got ready for the comeback.

I fought back in AIG and FAS the rest of the day. Managed to get net positive 4 hours and 250k shares later, and even manage to hit the top of the leader board. I still had 2 hours to go, no lunch in my stomach but noticing a huge play developing in FAS; just my chance to make some silly money. Seriously, I had about 10 checks in my favor for this play and I loaded the boat on the short side. I was so confident in the play that I came very close to just maxing out my BP. Coincidentally, everyone in Wall Street seemed to have left for the day 2 hours early because the volume dried up considerably as I had my biggest position of the day.

Needless to say the SPYs ticked up 30-40 cents out of nowhere on no volume and I get my you know what destroyed. I manage to make back a few hundo but realized that the volume wasn’t there by 2:45pm. I told our intern to tweet that there wasn’t much going on the market and people should consider going home as the best idea for the close.

But today is just the “first” day of earnings so there’s a lot more to look forward to. I am off to bed to get ready for tomorrow. It should be another exciting day. Happy trading.

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