I posted arguably my favorite blog post on September 28…it is something that took me about two hours to think about and type. Here is the link for those who do not remember:
http://epiphanytrading.blogspot.com/2009_09_28_archive.html
In the piece, I discussed ‘atoning’ for trading sins. I listed a number of things I needed to work on and a lesser number of things I did not do in the last 12 months. Number one on that list was this:
“I have never not one time called out how much money I made in a stock the instant I exited a trade nor have I even clapped my hands and exclaimed how well I did when right. It is obnoxious boorish behavior and impresses nobody when done over time. I did it for the last time ever 1 ½ years ago and saw a look of genuine jealousy and anger from a good friend of mine and hated myself instantaneously. Reputations speak for themselves.”
I absolutely need to elaborate.
When we saw the story of Baby Jessica rescued from that well on October 16, 1987 in the midst of the markets collapse, we were all universally happy when she was rescued. When Cal Ripken broke the consecutive games streak in baseball on September 6, 1995, fans collectively grinned in the midst of the good guy winning. Whether it is a uniform group as in the worldwide populace or a subgroup in the 2nd example, everyone cheered together and was happy together. The human psyche reacted in a positive way to good stories thus the spontaneous applause and burst of tears in both of those examples. But, you know, it just isn’t the same in trading. Do not get me wrong. I think I speak for every single day trader I personally know when I say that we all want to do well, but we also want one another to do well. But in the heat of the trading arena, basic decorum is oftentimes lost, forgotten, or totally utterly ignored. In all of the years that I’ve been doing this, one thing that has always amazed me is the propensity, desire, and inclination of traders to trumpet to the world how much money they make on a particular trade- particularly when they selfishly did the trade alone- particularly when they did not announce they were in the trade. These same people will not denote their losses, but will be happy to say something like “I made $500 in Goldman Sachs just now” to nobody and no one. But loud enough for all to hear. Or they will clap their hands loudly in pronouncing their gloating when many others did not hear of much less do the trade. The reason of course stems from giddiness and the desire for everyone to know that that particular trader is good at what he/she does. Oftentimes, malice is not meant, but there are consequences that inevitably occur. First, that trader tends to lose money on his/her next few trades net-net. The ego has a funny way of being overcome rapidly. Basically, the trader in this situation tends to forget what made him/her successful, thinks he/she is ready fur anything, and of course gets bludgeoned. The other two things occur due to perception. The trader who is not doing quite as well as the braggart feels resentful. This can lead to anger which leads to things like overtrading, containing aforementioned anger, and creating a desire to “keep up” (which by the way is ironic since people who tend to call out monetary amounts tend to lose money overall). Conversely and embarrassingly, a trader who is making substantially more money (even on the same trade) as the braggart tends to think less of him/her intellectually and personally. What I do chatroom-wise is call out every major trade I want to do and simply list the prices (win or lose) where I entered/exited) along with the fractional amount of shares I did. However, I will never ever never talk money (unless directly asked at a time far removed from the trade and only for educational purposes at that, i.e. posting a trade to back up a point at a much later date) because not only is it nobody’s business, all it can do is create resentment. Plus, frankly, I find it obnoxious and repulsive. The net of all of this is to truly realize that we really are in all of this together else we wouldn’t be trading for a living. But, like sticks and stones, words can come back to harm a trader who calls out how much money they made on any given trade in many more ways than one- from having the chip on his/her shoulder inevitably knocked off since it is inevitably the traders who are losing overall (even if they are having a good run) who are guilty of this to losing the respect of his/her peers.
Markets in Asia were generally higher overnight with Tokyo up 1% and Hong Kong ahead a relatively small 0.1%. In Europe, markets are just south of unchanged. Currencies and commodities are quiet too. Ho-hum. Futures are- gasp- pretty much unchanged. It is relatively quiet but for selected financials and techs with things like AIG and C trading higher again early this morning. The two notable differences are that big cap tech and big cap financials are trading slightly lower across the board and the newsflow overseas was a bit more negative with China once again warning of inflationary pressures and strikes in Greece intensifying (which dragged the futures down over ½% at one point). So, look for a downside bias off of the open…the first half hour will likely tell the tale for the day. If the market holds and the smaller financials hold, the market holds and rallies a little…if not, the market eases more. Tricky session with muted moves overall yet individual stocks will likely trade with more volatility today than they have in awhile as the newsflow has picked up.
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
GHM- closed near a high
TEAR- announced TLC Vision will be incorporating TearLab in eight of its U.S. refractive surgery centers to study Dry Eye Disease symptoms as they relate to LASIK surgery
NUVA- closed near a high
GYMB- great earnings
CLNE- good earnings
SMTC- good earnings
OLP- closed near a high after posting great earnings
VICR- closed near a high after posting good earnings
MDR, WLT- on “Mad Money” last night
BKE- decent earnings
DVN- announced sale of its assets in the deepwater Gulf of Mexico, Brazil, and Azerbaijan to BP for $7 billion; noted that its after-tax proceeds for its divestiture program will exceed estimates
AIG- Taiwan will likely decide on approval of Nan Shan Taiwanese unit to a Hong Kong entity by June
Bad-The following stocks have bad news and/or a weak technical pattern
MW- poor earnings
ROVI- convertible offering
AONE- closed near a low after posting earnings
JCG- closed near a low after posting earnings
CSR- filed to offer 20 million shares
JTX- poor earnings
Earnings:
THURS MAR 11 BEFORE
BKE CSUN JTX
LDK SFD
THURS MAR 11 AFTER
ARO GG NSM
PLL ZQK ZUMZ
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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