Saturday Night Thoughts

The only guy i know who loves trading bear markets more than me is Upsidetrader. I love shorting: it's fast, it's dramatic and huge profits if timed right. HOWEVER, in bear markets, stocks don't just drop everyday forever, that's too easy guys. We will go thru periods of time where shorting will be easy money BUT once the boat starts to tip too much on one side, once joe six pack takes his account and starts to load up on SKF at $150 and hold thinking that financials are DOOMED(which they are and will be eventually), then they have problems: that BIG money has already been made, we ALL heard that song before and NOW these stocks are rallying and they are squeezing the BA-JESUS out of these CRAPPY-SHIT-GARBABGE companies. I am stalking other blogs and it's shocking to me to see the HOLD and HOPE SKF-ers and FAZ-ers. Holding from much higher numbers and "praying" that the bears returns SOON. I am not convinced.
Listen, i understand your rationale and i agree with you 100% EXCEPT on one thing: the timing of your rationale. I honestly believe that this current rally will last longer and will leave more bears left scratching their heads in shock than any other rally we have seen thus far in this bear market. These "late to the party" shorts are caught and they will be the fuel that launches this rocket imho. I COULD BE 100% wrong in which case i will be glad cause i will be waiting ready to short again cause it's my favorite thing to do.

my two cents. good luck to all. just please trade smart and respect these charts.

Trader Thoughts

I have scanned thru several popular bloggers sites and i still see tons of newbees still eager to bottom fish FAZ and SKF. I don't blame them (as long as they use stops and bail)but i am seeing them trying to rationalize their losses and sticking to their positions. That's a dangerous game imo.
I had a trader interview with Tim Bourquin today and i think Tim was very curious about why i have reduced my trading size by half or quarter after the huge winnings i had in 2008. He said "you'd think that i thought you would really be very aggressive and really be going for it now after these huge winnings?". Hopefully i got my point across by telling him that 2008 was my kind of market with a huge payouts to the bearish momo trader(that's me!). I also told him that the reason why i have reduced activity and size this year is because in the past, my biggest winning streaks have immediately been followed by my biggest losing streaks WHEN I USED THE SAME STYLE AND TECHNIQUES as i did during the winning phase. The Payout and Payback cycle which every trader goes thru. I am trying to avoid the payback cycle.
I realized that since 2009 opened up, momo bearish trades are NOT as visible and easy to play as in 2008. I am wathcing really good traders give back most of their 2008 winnings because they are caught in their old ways that made them $$$$. These are very experienced traders who made millions last year mind you.

my cents. hope it helps.

Reading Around The Blogs

Looks like today's record performance was a 'Get Out Of Jail' day for many bottom pickers who got caught buying stuff too early. Look out for Joe Six Pack who bailed on his mutual funds last two weeks in a mad panic. He is having separation anxiety now and probably thinking "oops! I've made a mistake selling!!" Once Joe Six Pack thinks it's safe to comeback off the sidelines, they'll reverse em back down.

For now, they will rally to frustrate the masses.


Ahhhh, gotta love the markets!

Always Ask Yourself:

Am I emotional today?

While in a trade, talk to yourself out loud:

Am i getting greedy?
Am i desperate?
Am i over trading?
Is this position too big?
Am i cheer leading a position?
Am I following the game plan?
Am i in control of the trade parameters or is this trade controlling me?

Ask yourself out loud and the smart trader will give you the answers.