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$Debbie: Looking Forward To November

October 31, 2009 Leave a comment

As a developing trader, it is important for me to look forward and have an updated list of things I need to keep in mind.

1. I will focus most on my “pet” stock JPM unless it becomes untradable (signified by really ugly unreadable charts in multiple time frames).

 
2. I will deviate from JPM only when there is obvious, trending order flow in AXP.
 
3. I will watch my two new stocks/sector (HIG, COP). I will only trade these when there is obvious, trending order flow with small share size to start.
 
4. I will test the mornings or afternoons with small share size with tight stops in an attempt to capture the bigger moves.
 
5. When I get the move (trade idea unfolds) then I will be more aggressive and if things line up hold it booking profits at significant levels leaving a piece to capture most of move and if things don’t line up then I will book most of position and hold a small piece at break even.
 
6. I need to make sure not to push when there is nothing to be had.
 
7. I need to make sure to “sit back” and allow opportunity to present itself to me.
 
 
Profitable Trading All!!
Debbie
 
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$Debbie: What do I do when the pressure is on?

October 31, 2009 Leave a comment

This was Debbie’s situation at the end of October.

Two  days left in the month, down by a little bit net and being net flat on month was in sight which had become my new weekly goal for ending October. Debbie’s psychology was strong and ready for the challenge.

One day left in month, down by a bigger number net and being net flat, with only one day left in the month, net flat on the month slid into the distance and was still in sight but very fuzzy. Debbie’s psychology was weakened and sprinkled with grains of defeat. Ended day with big headache.

The last day of the month, entered day with an “I will make money today when opportunity presents itself’ attitude. Ended up on day by best number yet, and down by very little net and being basically  alomost flat on month. I allowed myself to consider my goal of being flat on month achieved.  Ended day with big headache.

What did I do when the pressure was on?

1. I allowed myself to be angry and pout the night before the last day of month but by the end of night I made sure to shift my attitude from a pouty, negative one to a conquering, positive one. I had a headache due to the let down and stress.

2. I came into the last day of the month viewing it as a new day, one in which I would make money, and one in which when opportunity presented itself I would capitalize on it. I told myself “you know this, you can do this, you will do this”….be alert, be focused, pay attention, and the market will present something…you just have to see it”.  I ended the day with a headache due to intense focus on what I was doing.

3. The biggest thing……I did not give up and I did not just accept that my month was going to be a negative one. And more importantly, when I got to just barely flat on the month I booked the profit and took a position on sidelines and watched. I did not say that I had to get a few more cents to wipe out the measly , small net negative number.  I looked at the market, time of day, charts in front of me, and determined that it was just was not worth risking anything else. Afterall it was also the last day of the month.I allowed myself to consider my goal of net flat on month achieved. This is important to my psychology and confidence.

Profitable Trading All!!

Debbie

$Debbie: End of Month Reflections

October 31, 2009 2 comments
October has been a strange month for me in my development as a developing professional trader. As I look through all of my notes that I take throught various trading days and at the start or end of each day, I see someone who has progressed tremendously (of which I am proud) and one who catipults from moments of confidence and knowing to moments of utter confusion and wondering if I know anything.
 
After much reflection, I have decided that part of this business is embracing those two conflicting moments and accepting that confidence and knowing what one knows will be juxtipositioned with a feeling of not knowing and a lack of confidence because in an everchanging environment (such as the market) one has to become very comfortable with sudden, quick, and sometimes drastic changes that can happen instataneously.
 
Part of embracing and accepting the juxtiposition mentioned here is the ability to immediately replace that feeling of not knowing and lack of confidence, when it arises, with a specific strategy to turn it back to knowing and being confident. There are three things that I have learned to say to myself and act upon to achieve this.
 
1. What is happening right now and has something changed?
2. Who has control right now? The answer is always me.
3. What are the if this then……that…scenarios I have in my toolbox that fit this situation.
 

Number 3 needs a bit of explanation. In my plan I have many if/then scenarios that I use at a seconds notice. A few are below:

 

1. If the tick does ________________then I will____________.
2. If the vix does ______________then I will ______________.
3. If one or more of my time frames show indications of a change of order flow then I will______.
4. If the SPY does__________________then I will______________.
 
 
The point is the more if/then scenarios one has the more control one has and ultimately the more confidence one will have.
 
 
Another thing that I have been reminded of this month is it is very important to test one’s trading idea, when set ups and signals arise, with small share size and tight stop loss perameters. On Friday, for example, I placed 6 trades and took several flats on positions and one small loss until my idea played out in a big way. I did this by doing the following:
 
1. I focused on my “pet” stock JPM which I know very well because it did an OR breakdown and followed through. Basically, it was doing what it should. Although I did deviate to another stock when it did not follow through I kicked it out and immediatly returned to JPM and then told myself I will not even look back.
 
2. I got into JPM a few times before I actually got the position I really wanted. I entered and re-entered several times. When doing this I took small gains and flats so that I managed risk.
 
3. When all things lined up (tick, vix, SPY, Price Action All Time Frames) I took, without hesitation, an aggressive position (now I wish I had been more aggressive but that’s another post).
 
4. I kept telling myself that as long as my criteria were being met then I was staying in the position. The only thing that I made sure of was to book enough profit early enough so that I would, at worst, be +2 on the trading day and my expenses would be covered. After that was achieved then I booked profit all the way down at significant support levels until I was holding my last piece (100 shares). That 100 shares I told myself I would hold until I was either stopped out (+5) or I could identify that conditiuons may be slowing or changing. With this 100 shares I was able to capture almost the entire move.
 
5. When I booked the profit on that last 100 shares, I called it a day. I have learned that lately, in the afternoons, when there is a good move in the morning or mid day, the market slows down and then price action in the stocks that moved with the market also slow down. I made a decision that I would not risk a cent trying to make a few more pennies.
 
Profitable Trading All!
Debbie

End of day recap October 27th

October 29, 2009 Leave a comment

Sell Sell Sell $

October 28, 2009 Leave a comment

How quickly things change in the world of trading! We have now sold off for 4 consecutive days on above average volume. Just a week and a half ago, it seemed like we would never have a down day again. Psychologically the SPY hit 110 and bounced off it like a brick wall. The US dollar has been trending up while gold is on the defense. GLD broke below the 20 ema yesterday and continues to retrace back towards the 50 EMA. The financial sector which has been Wall Street’s sweet heart since the lows in March was one of the weakest sectors today. Whether this is a turning point in the markets or just another pull back to get long remains to be seen. But one thing is for sure, it is healthy. The markets needed to take a breathe. If history has shown us anything, Greed is not good! Innocent people end up getting hurt!

With the SPY breaking below the 50 EMA today for the first time since July 15th, we need to be cautious with any longs, as there does not seem to be any support until $102.68. After 4 straight days of selling, we see some nibbling on the long side with a possible test at $107.

As always, you want to have scenarios (STOCKS) for both sides of the market. spy28

Keystone Morning Quickie$

October 28, 2009 Leave a comment

October 28th 2009

Market Commentary

The futures are currently pointing downwards after 3 consecutive days of weakness. Economic data was mixed yesterday as housing was better than expected, while consumer confidence was worse. Durable goods at 8:30am were in line with expectations rising 1%.

So far 185 of 219 S & P companies have reported better than expected earnings, yet many people are concerned that this is due to significant cost cutting and not due to increased sales.

The SPY closed below the 20 EMA on the Daily yesterday and looks like it may be headed back to test the 50 EMA at $105.10. The last time we tested the 50 , earlier this month, the markets exploded to the upside.

We will continue to expect volatility in both directions as market participants start to wonder if the markets have gone to far to fast or is this pullback just another great opportunity to put some money to work.

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Call us at 212-594-8900 if you would like to discuss any of our trading programs.

Technical Levels

50 Day 200 Day
S&P 1049 916
DOW 9686 8570
NASDAQ 2087 1779

Keystone’s Trades

Wynn Resorts (WYNN) Short sale – After reporting a sharp drop in 3rd quarter profit yesterday which was still better than expected, the stock got hammered on huge volume. What may be exhaustion, after trading down from $75 earlier this month, we believe that the stock will continue to see selling pressure. After closing yesterday at $56.13, we will be patient in getting “our price”. This very well may have a $3-$4 rally before the selling resumes. We will not look to pick a bottom and get long, but rather wait for a good short set up. We will begin building a position around the $60 level.

Target: $52.96

Stop:$64.65

Economic Calendar

7:00 MBA Mortgage Applications
8:30 Durable Goods
9:30 Hearing: Dark Pools, Flash Trading, etc.
10:00 New Home Sales
10:00 Metropolitan Area Employment
10:30 EIA Petroleum Inventories
11:00 Hearing: Executive Pay
1:00 PM Results of $41B, 5-Year Note Auction

Top News Stories

GMAC needs third lifeline. GMAC Financial Services and the Treasury are reportedly in advanced talks to prop up the auto-lender with its third helping of taxpayer money, making it the first of the stress-tested banks to need additional government capital. Treasury will likely inject another $2.8-5.6B into GMAC in exchange for preferred shares, bringing its total investment in GMAC thus far to $15.3-18.1B, for which it currently owns 35.4% of the firm. Sources say the FDIC has also agreed to backstop another $2.9B of GMAC’s debt to facilitate day-to-day lending. The government’s willingness to deepen taxpayer exposure to GMAC reflects the troubled lender’s importance to the revival of the auto industry.

Consumer confidence dips. A lower-than-expected consumer confidence reading sent a chill through markets Tuesday. Conference Board’s index came in at 47.7, down from 53.4 a month ago, and lower than consensus estimates of 53.2. A plunge in expectations (65.7 vs. 73.3 in Sept.) led the way down. “Consumers’ assessment of present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment,” the group said, noting its Present Situation Index is now at a 26-year low. Analysts struggled to find an obvious explanation for the decline, but noted the drop didn’t bode well for recovery hopes.

Risk appetite withers. State Street’s investor confidence index fell 10 points to 108.4, the lowest since April, with the most pronounced decline seen among North American investors (-12.8 to 101.1). European investors were also much more subdued (-9.3 to 101.8), but confidence rose among Asian investors, albeit to a level that still trails the U.S. and Europe (+2.4 to 95.3). “Institutional investors have paused to take stock,” index co-developer Ken Froot said. “While the U.S. earnings season has been relatively robust so far, the number of positive surprises that have been observed in employment, retail sales, manufacturing and trade figures has diminished considerably, and this may be influencing investor risk appetite.”

Easing Hilton’s towering debt load. Sources say Blackstone (BX) is in talks with lenders to shave about $5B off Hilton Worldwide’s $20B debt load. Specifically, Blackstone is considering coughing up another $800M in equity to buy back debt at a discount (on top of its $5.6B original investment), and would like to extend debt maturing in 2013 to 2016. With capital markets reopening over the past six months, private-equity firms are using a variety of schemes (exchange offers, repurchases, tender offers) to refinance and extend the maturities on highly-leveraged debt taken on during the heyday, staving off default.

Panel backs hedge-fund clampdown. The House Financial Services Committee overwhelmingly passed a bill that would require advisers to hedge funds, private equity and offshore funds to register with regulators, bringing some transparency to the loosely-policed industry. The bill, however, exempts venture capital funds and funds with less than $150M – which SEC chief Mary Schapiro warned “could come back to haunt investors in later years.”

Tackling too-big-to-fail. Rep. Barney Frank unveiled legislation to monitor and dissolve systemically critical financial institutions. Under the proposal, costs for taking over and euthanizing a failed bank would be paid for by shareholders and bondholders, with taxpayers temporarily covering the overflow until an assessment is rendered against the failed bank’s surviving peers. A council of regulators – including the FDIC, Treasury, Fed and SEC – would be in charge of monitoring the conglomerates and invoking a wind-down if necessary.

That’s a good czar. While so-called pay czar Kenneth Feinberg’s new rules for TARP backed firms cut compensation by about half, they also boosted base salaries by 14% to an average of $438K/year after executives complained, according to an analysis in today’s WSJ. The move appears to contradict Feinberg’s stated goal of tying pay to long-term performance, and “deepens the confusion and skepticism” surrounding the types of pay systems the government is promoting.

Ford shows why it’s #1. Consumer Reports’ much-awaited yearly car reliability survey held few surprises, with foreign automakers dominating its top-10 list, and domestic brands prominently featured on its least-reliable tally. Scion took top spot, followed by Honda (HMC), Toyota (TM) and Infiniti (NSANY). Ford (F), at #10, was the only U.S. carmaker to make the grade. Least reliable brands were Chrysler, Cadillac, Dodge and Jeep. Media reports yesterday claimed Fiat models will drive Chrysler’s turnaround efforts, but with new cars not due until 2012, it’s unclear whether Chrysler has enough staying power in its balance sheet.

Ruiz pegged as AMD insider. Sources say former AMD (AMD) CEO Hector Ruiz is the insider government officials have identified as providing nonpublic information to Galleon’s insider trading scheme. Prosecutors released fragments of recorded conversations between an unnamed AMD executive and a Galleon employee in which they allegedly discuss the timing of the spinoff of AMD’s plants before the deal was announced in Sept. 2008. Ruiz hasn’t been charged, and prosecutors don’t say he profited from insider trading.

Gloom on economy spreads. Americans are growing increasingly pessimistic about the economy after a mild upswing in September, according to WSJ/NBC’s monthly poll released Wednesday. For the first time during the Obama presidency, a majority of those polled now see the country as being on the wrong track. Fifty-eight percent think the economic slide still has a ways to go, up from 52% in September, while only 29% think we’ve hit bottom, down from 35%.

Mortgage apps drop for second straight week. Mortgage applications fell another 12.3% following a 13.7% drop last week, even as the average rate for 30-year mortgages inched down to 5.04% from 5.07% a week ago. Refinancing was 16.2% lower.

Ford picks Geely. Ford (F) selected a group led by China’s Geely as the preferred bidder for its Volvo unit, a senior Geely executive said. Geely and Ford will now enter into exclusive negotiations over Volvo.

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$WFC Wells Fargo trade

October 27, 2009 1 comment