A couple of months ago, after a pretty good start, I made quite an unfortunate purchase of a sizable lot of CELG at 54 a few minutes after the open of the stock market. The 54 offer refreshed one time and then the bottom fell out of the stock. I am ordinarily quite fast in exiting poor positions, but this one just got away from me. I promptly gave back my entire morning in, oh, about eight seconds. To my credit, I got out for about a 15 cent loss when the stock soon fell another 60 cents or so rapidly, but the damage was done. I immediately went to the chatroom as I do after every trade I call out on audio and/or the chatroom and noted my net performance on said call. However, after this one, I also noted that I had “lost morning gains.” I always like to try to let the world know how I feel without getting too upbeat or too downtrodden- just the facts. So, am I right? Let me give you the two sides. On the negative side, there are those who say this paints a poor picture and can create negative energy. But note what I wrote: But you have to understand what I wrote semantically. I did not write “lost day. Cannot recover.” I wrote “Lost morning gains.” After thinking about it, I won’t make a comment such as that again because I don’t want to even give a whiff of negativity. If anyone perceives it as bad, it becomes bad…and that is the last thing I or anyone wants. But let me explain why I did it. First, sheer honesty. If one cannot be honest with oneself and others, one cannot electronically day trade very well- at least from what I’ve observed. For instance, had I lied about the amount I lost, what do I prove besides boosting my ego under false pretenses? Instead, what tends to happen is that I’d lose time and again- I know this because of such statements as telling myself “Well, that wasn’t bad” or “I didn’t deserve that” or something of a similar ilk. Second, it is a healthy way to get it out of one’s system. Rather than let it fester, if one can admit failure, it is so much easier to get over it. I will never apologize for something I didn’t do, but if I know I am wrong, it’s always so much better to say “I screwed up” than to mull over it for an extended period of time. Finally, it gives me perspective on my day. Just because I lost my day *so far* does not men I cannot still have a day. A few Fridays ago, I was down a rather sizable amount of money (in the four figures) early after not getting BAC to go my way along with a myriad of other small mistakes. Yet, in the tumult of that trading session, I finished ahead four figures by realizing that I was overtrading and instead settled into a nice groove in picking selected spots. But I couldn’t have done that if I sulked all morning long nor could I have ended up having a nice day if I didn’t have a self-realization and particularly self-acceptance of my early failures. I’m still not finished. There are two more points which are very important. First, have a way of getting frustration out. G-d knows I am much better than I used to be. Banging, screaming, pounding, cursing…yeah, that lets it out, but also shortens one’s life span. But one has to have a good way to let it out because letting anger and frustration build internally only leads to repetition of poor trading behaviors. What I for one do know is take a nice walk- suck in the cold air, glance at the sky, look around- at the real world. And I saved the best for last. Much worse than saying “lost morning gains” are comments like “That always happens to me,” “I never hold long enough,” the horrible “I can’t do this,” and the worst “I cannot make money doing this.” There’s a difference between being self-aware and self-destructive. So, find the fine balance trading-wise; you’ll cross that line every now and again (on both sides) but pent-up anger or ignoring poor behavior is cancerous as well as giving losing thoughts a voice.
Markets in Asia were down overnight with Tokyo off 0.5% and Hong Kong 1.8%. Losses extended to Europe as well with the bourses down 1/2% to 3/45 across the board. The dollar is a little stronger against the euro and oil/gold are down a bit. Despite the positive earnings out of CSCO, futures are weaker overall amid poor jobs data and worries about things in Europe. Overnight, things substantially worsened in the economic outlook for Spain and Portugal as they failed to follow-up with economic austerity statements similar to that of Greece yesterday. Thus, their bonds fell a lot with Greek bonds following in tow. Look for overall weakness today albeit nothing major. Trading will likely be very active early on with a focus on techs, financials, and especially the earnings plays.
Reiterating-
If the whole story is not there -
If something is good, assume either a short thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified.
If something is bad, assume either a buy thru unchanged or an A-B-A2 (preferably to the downside in a downside market and the upside in an upside market) based on direction of the market unless specified-
Good- The following stocks have good news and/or a strong technical pattern
AUXL- closed near a high after getting FDA marketing approval for its Siaflex product
APKT- closed near a high after posting great earnings
JLL- closed near a high after posting great earnings
AAPL, RIMM, AMZN- closed near a high
V- great earnings
BRCM- decent earnings
CSCO- great earnings
THQI- good earnings
MKSI- great earnings
AMP- decent earnings
CELL- decent earnings
DLB- good earnings
AFFX- great earnings
UIS- decent earnings
SLE- decent earnings
HOT- decent earnings
LZ- decent earnings
ANF- good same store sales data
GPS- good same store sales data
UFS- great earnings
Bad-The following stocks have bad news and/or a weak technical pattern
ADS- closed near a low after posting bad earnings
ATPG- closed near a low after announcing poor guidance
GS- reversed in closing near a low after trading higher most of the day
STX- mentioned negatively on “Mad Money” last night
AKAM- poor earnings
WFR- poor earnings
YUM- poor earnings
NVLS- lukewarm earnings
CNQR- poor earnings
STLD- bad earnings guidance
BG- poor earnings
DO- poor earnings
PENN- poor earnings
TM- poor earnings
AVP- poor earnings
AGN- poor earnings
RAI- poor earnings
K- poor earnings
WLT- poor earnings
MA- poor earnings
Earnings:
THURS FEB 4 BEFORE
AGN BCE BCRX
BG BHE CI
CINF CLX CME
DO GFI HOT
HSP K LZ
MA MCO NCR
NOC NUS PENN
RAI RTI SBH
SE SLE TEN
TM UFS UIS
WBC
THURS FEB 4 AFTER
CNW FIS FMC
HAR ILMN
PBI PKI RAH
RMD SNIC SUN
VRTX
Good luck today.
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
Joseph R. McCandless- Managing Partner
D. Timothy Seaquist- Managing Partner
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