We watched tape of MEE from yesterday after the Close. It was a very difficult stock. But I heard a comment from a very bright trader that I bet is heard on other trading desks:” I don’t like scalping MEE because I can’t tell when it is going to spike 20c against me.” I know too many traders passed on … Read More
OPENING DAY
Tomorrow is Opening Day! All the statistics from last year are thrown out and we start anew. Spring has arrived with its warmer weather, flowers blossoming and sunlight extended. All those fans of non playoff teams gain a great gift- hope. No matter that the Tampa Rays failed to make the playoffs in 2009 as most predicted- this could be … Read More
TRADING WITHOUT VISIBILITY (ARQL)
I was flying home from Florida this weekend and we started hitting some serious turbulence on the descent. A woman in front of me popped open the window shade and was startled by the lack of visibility. “How can we land in this? You can’t see a thing!” she shrieked to her significant other (who looked too much like “The Situation” from … Read More
FRESH NEWS AND A LEVEL (VZ)
Not all levels are created equal. As traders we must differentiate which levels are most important. Less important levels require more checks for us to take positions. Well fresh news just might be one of those checks. VZ had fresh news today. From Forbes.com: Rumors have been circulating that a new Apple ( AAPL – news– people ) iPhone, equipped to operate through Verizon Communications’ ( VZ – news – people … Read More
All “LEVELS” ARE NOT CREATED EQUAL
During a midday lecture with our new class we discussed the trade in BA above 73.40, “a level”. One of our new traders reasoned, “BA got above the level so I bought.” I stood up, paced to the front of the room, and started teaching. We don’t just buy a stock because it is above a level. Or do we? … Read More
WHY NOT TO TAKE OFF WHEN TRADING WELL
I received this email from a loyal reader which encapsulates why you should not take off when you are trading well. Trading is like being a professional athlete in that it is performance-based. Sometimes you just see the market better than at other periods. And if this is the case, sit in your seat, and enjoy these times. Squeeze every … Read More
THE STATE OF TRADING
I received this email from Reader Eric: Hello Mike, I wanted to share with you an interesting paper I found on the T3 website. http://www.knight.com/newsroom/pdfs/EquityTradinginthe21stCentury.pdf It addresses the state of trading in today’s environment. Over my year of trading I have seen successful groups on my floor completely wiped out by the changes in the trading environment. Yes, they were … Read More
POINTS OF INFLECTION (TIF)
TIF, Tiffany & Company, offered opportunity on the Open. 45.35 was the most important level. Trades off of these points of inflection offer ridiculous risk/reward opportunities. 45.35 was the most important level. After an initial upmove on the Open 45.05 held the bid. And then TIF found 45.35 but could not hold a bid at this price. Repeating white prints … Read More