The other day I tweeted that I was long NFLX and short SPY and that it felt kind of “weird”. I wrote “weird” because the easy money trading NFLX had been on the short side for over a month and at the time the SPY was in a multi-week uptrend. As an intraday trader I often will take trades that … Read More
So You Want To Fade This Market?
Over the years I have seen a very strong tendency with traders wanting to be short the market at the first signs of any strength after they have just observed major weakness. It feels like yesterday a former trader I worked with was shorting SPY at 76 one or two days after we had put in the March 09 bottom. … Read More
Understanding The Volatility
We are about two months in since the market broke its longer term uptrend. With the break of that uptrend has come a sizable increase in the market’s volatility. There are trading opportunities up the wazoo. But one thing we have noticed about this volatility versus what we saw in the fall of 2008 is the time stocks spend trending … Read More
Looking for a Bounce
When a momentum stock makes a misstep the market is very unforgiving. A few weeks ago we saw NFLX get hammered dropping around 80 points in a four-day period. This caught the attention of many short term traders. When a stock moves that far that quickly there is a lot of money to be made on the short side but … Read More
The Pre-market Tell
I am really starting to sound a lot like Bella these days. When he lectures our trainees he tends to repeat himself over and over and over again. My style tends to be more like “this is the concept–good luck” (maybe not that bad:) I didn’t fill out a lot of “blue books” in college and law school. I like … Read More
A low probability trade
I got long NFLX today at 132.55. It had dropped about 10 points from the open to 132.47 and after it made a new intraday low it traded above the previous low. So I stuck in a bid above the original low and knew if my bid got hit I would most likely be stopped out of the trade for … Read More
What is working now?
I ask myself this question constantly. It isn’t enough to come in each trading day armed with a series of ideas. You must evaluate the price action in the market and for each stock that you are watching. And you MUST be prepared to move your attention to the stocks or ideas that are offering the most opportunity. This is … Read More