A few days ago, one of the nicest people on the planet made a post on our chatroom in which he noted that he was “sorry to have spoiled a perfect game” as all of the traders that day except him were at least marginally profitable and much more importantly, he noted that “maybe tomorrow (he would not) feel like such a loser.” That post really got to me; we are traders for a career to put food on the table and roofs over our heads, but we are human beings first and foremost. I asked him to tell me his best trade and his worst trade of the day. After three minutes of banter, all I got was that it “was not so much what I did or didn’t do…I know where I made my mistakes and what I should have done that I didn’t do.” Well, how is that possible if one does not look at one’s trades? Now, the dialogue went on for awhile and he came around and figured out what he did wrong after a half hour of dialogue in happily recognizing a very easy correctable mistake in stating “OK, some day I will look back at this and maybe laugh, because I know I can do this; I have the will the drive and the thrill of learning something new.” Now that’s the spirit! Putting my trader hat back on, I found it mind boggling that to get from the original comment to the last positive comment, I had to literally verbally force this otherwise fine individual to simply look up his trades for the day. You see, it is extraordinarily important to not obsess over one’s trades, but a healthy dose of self-analysis of one’s psyche and trades is the only way one can truly see what one is doing right and wrong. I spend about 15-45 minutes each and every day in entering the numbers from every single one of my previous day’s trades on a spreadsheet. As I do so, I re-live the previous day as I do the work; I typically do this at lunchtime when it is slower and/or after the close when it’s not earnings season. Every so often, I also look at the last month’s worth of trades as well as the last year’s worth of trades so as to compare what it is I am doing now compared to the other spates of time. How else am I supposed to see patterns where I win or lose if I don’t look back at my own trading activity? A few months ago, the president of the firm took it upon himself to print out sheets in which he encouraged people to mark down their trades along with why they did them. He also told anyone who did it to feel free to come to him to discuss the trades. We both found it perplexing that not one person took him up on the offer. As traders, we tend to focus upon what we do right and wrong- equally- and coming out of it a bit more intelligently and with a good attitude at that. So, while I don’t do a ton of things right, I do feel like I have it spot on when I advise everyone who does not do it to make it a resolution this year to spend time truly analyzing and thinking about their trades. Seeing the same mistakes (and winners) certainly gives me a clue as to what to do and what not to do in the throes of trading battle and it will help each of you as well.
Markets last night were flat in Tokyo but down 1.3% in Hong Kong. In Europe, prices are generally flat. The dollar is slightly stronger with gold and oil both down around 0.5%. Bonds are rebounding a little. Jobless claims came in a tinge better than expected with deficit data in line. Housing starts were a little weaker than expected. Phily Fed (12.5) is due out at 10AM. Futures are marginally higher. Odds seem to favor another quiet session with a slight bias to the upside. The focus will likely be on the earnings plays (FDX), banks on the BAC news, and the myriad of small cap momentum plays moving around yesterday.
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
AIR- decent earnings
TQNT- selected by Samsung for 3G RF Front-End of new Galaxy tab
MLHR- decent earnings
BAC- rumored to be in talks to settle dispute with large mortgage investors
MDRX- featured on “Mad Money” last night
HEI- decent earnings
NDSN- decent earnings
YOKU- closed near a high
SKH- closed near a high after an upgrade
CYBX- closed near a high after the SEC closed its stock options probe without action
EXEL- closed near a high
VRSN- closed near a high
SRDX- closed near a high after naming new CEO and announced intentions to sell its Surmodics Pharmaceuticals business
WYNN, LVS- upgraded by JP Morgan
WGO- decent earnings
Bad-The following stocks have bad news and/or a weak technical pattern
SCLN- poor phase 2b clinical trial results of SCV-07
XUE- closed at an all-time low
FSLR- closed near a low in a reversal after posting earnings guidance
FFIV- closed near a low
BIDU- closed near a low
V, MA- closed near a low
MOTR- closed near a low after it officially filed for a secondary filing
GS- closed near a low
FCX- closed near a low
FDX- poor earnings
Earnings:
THURS DEC 16 BEFORE
ATU DFS FDX
GIS PIR RAD
WGO
THURS DEC 16 AFTER
A.CN APSG ORCL
RIMM SCS SMOD
TTWO ZQK
Epiphany Trading, LLC
www.epiphanytrading.com
Erik R. Kolodny- Chief Markets Strategist
Brendan P. Byrne- President
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