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Friday, September 29, 2006

The Dow lost about 40 points today. Volume was light and the advance/declines were negative. The market wants to go higher. The technicals seem to point to another high. Light volume declines mean nothing. We will be short term oversold in no time. Gold was off over $5 today and the XAU was down a point or so. Of course I am about to book one of my biggest losses ever in the OEX. It was foolish. I am going to try and turn it into a positive though by going over my trading scheme and making some changes. Sometimes the biggest losers can become the greatest teachers. My risk control is terrible. It must be addressed or I will never get anywhere. I broke one of the rules with this trade and that should never happen. It was really stupid on my part. I hope I never do it again. The discipline wasn't there. It must be or trading just won't work. I need to take an honest look at just what happened to prevent it from happening again. It is a tough game. I'm always toughest on myself and I have to be. It's a business and must be treated as such for success. My results up to now have been lacking, even with big winners. From now on things will change or I will have to think of something else to do. I've invested a lot of time and money into this venture. I cannot afford to have to throw it all away due to my lack of discipline. I've got to make some changes and I've got to start right now.

Thursday, September 28, 2006

The Dow was up 29 points on light volume. We are almost at an all-time high on the Dow. The other indices are nowhere near their highs. This is the most non confirmations that I have ever seen. I can't explain it. The market does what it wants. My puts are a disaster. Even with 3 weeks left they are all going to be big losers. I will have to change the way that I do things here. There is no other way to go about it. Gold didn't do much today. The XAU was higher early and then sold off. Todays post is short as I have other things to take care of.

Wednesday, September 27, 2006

The Dow was up another 20 points on good volume. Advance/declines were positive. The market keeps pushing higher and there is no stopping it at this point. I need to bail out of all my positions. It doesn't matter anymore. The puts are losers. Gold was up today and the XAU rallied another couple of points. Missed that opportunity. I guess I need to take a break. My trading has been horrible. But somehow, you have to keep moving on. No discipline and stupid moves. There are no excuses. Mentally I'm tired and will feel a sense of relief when I book the losses and step aside. I guess I just wasn't up to the challenge. My own stubbornness got in the way. I misread the market and it cost me. I was so sure that my ideas would work, it clouded my judgment about what was really going on. But where do I go from here? Will I actually learn something for a change or will I just keep on with the same bullshit that happens time and time again? Who knows? Maybe there are too many other things on my mind. Losses always bring self doubt. I'll keep at it and maybe one of these days I'll get it right.

Tuesday, September 26, 2006

The Dow surged another 93 points today. Volume was good and the advance/declines were almost 2 to 1 positive. The market is just moving higher, there is no reason. The shorts, such as myself, are getting squeezed to death. I am an idiot for buying more puts today. They are already losers. The other puts I bought are so under water that nothing will save them. I have really made things difficult for myself. I will probably be banking the losses this week and then taking some time off again. There are no excuses. Perhaps I just don't have the discipline that it takes. I certainly don't have it right now. I will be sustaining some of my biggest losses ever here. There is no one to blame but myself. My whole ideas were way off. The market just keeps going higher. There are some vast divergences and yet nothing is happening to the downside. I haven't seen anything like it at this rate. The market just keeps going up. I need to get on the sidelines and watch for a while, I guess. It is not a good feeling. It sucks. I am about to go negative on the year. I broke one of the cardinal rules and risked way too much on one trade. I'm an idiot. There is nothing else to say. Gold was up a little but the XAU rose almost 4 points. Perhaps I should have looked there for a decent trade. All the talk about an extra week on the options just lulled me into a false sense of security. It was stupid. I don't know how to write about what I feel right now. I'm pretty mad also. How could I again do something so wrong? The indicators just didn't work, yet if you can't use them, what good are they? It is the most disheartening thing in the world. To put in all the time and effort. Then just watch as the money just goes away in a hurry. There is nothing else too say...

Monday, September 25, 2006

The Dow continues higher. Up 68 points on heavy volume. Advance/declines were over 2 to 1 positive. The market just keeps heading higher. I am getting killed with the puts I own. I should perhaps sell them and try again. It is painful but my idea was just wrong and I have compounded the problem by risking way too much. These are mistakes that just shouldn't happen. Perhaps I was just anxious to trade since I had been on the sidelines for so long. My normal discipline wasn't there. Of course there is always a chance that the market will go my way but it's doubtful now. Maybe I was lulled into a false sense of apathy with an extra week on the options. I don't know. But the fact remains that we are heading higher and the signs do not point to any significant downturn on the horizon. Quite the contrary, we are overbought and staying there and that isn't a good sign for puts. Not much else to do now at this point I suppose but cut the loss. Gold was up a touch and the XAU broke to new lows and then came back but was still off over a point today. I need to look at the charts here. Could be time to get long. Mentally I'm about spent, with the angst from a big losing trade on my head. The mental capital used up in losing trades is hard to recover from. It takes up a lot of time and effort and isn't worth it. Better risk control parameters must be used. Sometimes you just get it wrong. Sometimes the indicators don't work. It's no excuse to break the rules.

Friday, September 22, 2006

The Dow lost 25 points today. Volume dried up, it was light. Advance/declines were negative. It was a lackluster day. Nobody really wanted to buy or sell. The puts I own are still losing money. I would like to sell them but don't really want to book the loss and try again. The weekly chart looks like it is about to roll over. If it does than the puts will work. But there are a lot of ifs. Light volume is never a good sign but we really haven't gotten the down move that I have expected or traded for. We'll see what happens next week. Gold was up $7 and the XAU did not move with it. I suppose I'll have to stay away from there for now. Back to the puts on the OEX. There are 4 weeks left on them. The entry was wrong. Perhaps time will bail me out, who knows? The summation index has yet to give a firm sell signal and that's a problem too. I anticipated a move and I was wrong. I'm going to have to think things over the weekend. Mentally I am not feeling well. I've been a bit ill lately. I don't know why. Trading is difficult. It is time consuming. It is the toughest game in the world. You have to be up to the challenge. The skills required for success are enormous. There are no shortcuts and there are no excuses.

Thursday, September 21, 2006

Who knows if this blog will post? This site is pretty lame. The Dow lost 80 points on increased volume. Advance/declines were negative. I'm definitely not sold on this decline. The internals don't look like they are ready to drop significantly. I could be wrong. We'll see about tomorrow. My puts are still losing big time. I think I might have a chance to take a small loss but only if we get a big downdraft. As I said when I purchased them, there are an extra week on these options. That might be what saves me. Or not. I really did not time this trade on the entry very well and I paid way too much for what I got. But what can you do? Gold was up a couple bucks and the XAU rose over a point. No real interest there even though the dollar fell. We should be getting some earnings pre-announcements soon. That could help take us down. Perhaps the summation index is pointing down but not decidedly yet. Mentally I'm feeling better now that my trip to the dentist is over. But really, I'm stuck in a bad trade. I really need to get out and try again. But I do think that I might be able to just get out with a small loss, if I'm lucky. The trouble is now I'm tied up in this trade and there are others to be had. It wouldn't be so bad but I put more money than I should have in this and do not want to risk any more at this point. And so it goes. If you don't have the discipline to stick with the trading rules than you will pay the price. The markets are a tough game to play.

Wednesday, September 20, 2006

The site did not work again at 1pm so this is brief. The market was up over 70 points on good volume. Advance/declines were positive. I am getting killed with the puts. I may have to just get out and take the loss. I obviously was wrong. My prognosis did not materialize. I should have stuck to the rules and not traded so many contracts. You get what you deserve. I will wait to see how the week closes out but these things were wrong. My timing was way off. The Fed left rates unchanged. Otherwise it was just another good up day in the ongoing trend. The market is telling you that prices are going higher. The puts won't work.

Tuesday, September 19, 2006

The Dow lost 14 points today on average volume. Advance/declines were negative. There were some overseas coup rumblings in Thailand that sent the market lower. Inflation news was tame but housing continues weak. Fed meeting announcement tomorrow. I still own the puts but we haven't seen the decline begin in earnest as I expected. I was early on the buy-in and I am losing money. I don't know if this will work now but I do anticipate a decent down day this week. I thought that it might be today but I guess not. Gold was down again and the XAU hit fresh lows. Oil has gotten clobbered here lately too. Money is coming out of commoditites and into the stock market. I am guessing that is what is holding us up. I am getting very wary of this put trade. I am not seeing the summation index signal as I would have liked to by now. I mean that could change in a day but it hasn't yet. Todays action doesn't help anything either. Perhaps my whole line of thinking is just wrong. There was no post yesterday since I played golf. I also took part of today off. I have a dentist appointment before the close on Thursday. Mentally I'm wary as I said before. Perhaps the Fed meeting will be the catalyst to the downside. Yahoo pre-announced that the earnings wouldn't meet expectations and we did not sell-off that much. So I'm worried. We'll see what happens in the next few days. Tomorrow could be key.

Friday, September 15, 2006

The Dow gained 33 points on expiration heavy volume. Advance/declines were positive. My OEX puts have lost some value. The inflation data came in as expected. We opened higher and stayed there all day. I am disappointed that I did not get a better price for the puts that I bought. I could have really saved some money there. Perhaps I was a bit anxious. I still feel that this trade will be a winner. We remain overbought but as each day passes the chance of a downturn increases in my opinion. There are divergences or potential divergences. We'll see what happens next week. As always, the market will do what it wants. However I think the second half of September will be weaker. I also think earnings pre-announcements in the beginning of October will send the markets lower. Time will tell. Gold lost a few bucks today and the XAU gained a point and a half. Volume was very heavy there in the gold shares. Are we at a bottom there? I don't know. I will need to check the charts over the weekend. Mentally I'm a bit tired. I am almost caught up on my readings. I am trying to remain objective about this trade. If we continue strong to the upside I will have to get out and take the loss. There is an extra week on these options, which I've mentioned before. That should keep the premium high. Again, I think this weeks action to the upside was more option related than anything else and next week will be the key. Fed announcement on Wednesday and we will take it from there.

Thursday, September 14, 2006

The Dow was down 16 points on lighter volume. Advance/declines were negative. The put options I own didn't do much. We are overbought and could stay there. But I feel this is a trade that will work. Inflation data tomorrow and option expiration. Could skew the markets. We'll see. The action today really had no conviction one way or the other. I saw a lot of volume in some OEX out of the money call options. Only one day left. Gold lost a couple bucks but the gold stocks fell hard, down another 5 points. There is no let up in selling there. I'll look to buy some calls eventually. Mentally I'm doing OK for now. I've continued my reading and I'm doing the work required to be successful at this point. I'm a bit worried that I have bought the puts too soon but even so I think they will be winners. There is an extra week on the October options. Early next week should be a wait and see pattern for the Fed on Wednesday. That's it for today.

Wednesday, September 13, 2006

The Dow tacked on another 45 points today on good volume. Advance/declines were 2 to 1 positive. The market seems to want to go higher here. I bought some OEX October puts. This was the day that I had targeted and I did it. We are overbought as of tomorrow. I paid more than I wanted and would have gotten a better price if I had waited a while longer. But the purchase was made. The summation index is pointing higher but I bought the puts now. My thought is that it is the right thing to do. I think the recent gains are option expiration week related and not the beginning of some big up move. There will be a divergence on the McClellan oscillator and on the RSI unless we continue much higher. I have put more money into this trade than usual. I am confident here but don't want to be overconfident. Anything can happen in the market, that is for sure. Gold was up a touch but not much. The XAU is trying to stabilize. It was up about a point. Mentally I'm tired as I did not sleep all that good and had to try and enter this trade. It's all about the entry, managing the trade and the exit. This is my first trade in months. I have been patient and I feel that this will be a profitable venture. It seems to me that I have seen what is going on in the market here before. I did get the closer to the money puts and I think that was a good idea. Retail sales tomorrow and inflation news on Friday. We'll see.

Tuesday, September 12, 2006

The Dow gained 101 points on heavy volume. Advance/declines were 3 to 1 positive. The summation index should be back to pointing up. So now we have a dilemma. I want to get the OEX puts but the market is signaling higher prices. I had said tomorrow would be the day to buy puts. I think I'm going to stick with that. The puts I'd like to get are getting very reasonable pricewise. It is option expiration week and that could skew the prices one way or the other. If we go higher tomorrow, some divergences will appear. I have been waiting for this trade and I'm going to do it. I think it will be a good one. As always, I could be wrong. The market does strange things sometimes. There is an extra week on these options so they are pricey. None the less, if we get any strength tomorrow I'm getting them. There should be some early follow thru. We'll see. Gold was down a bit today and we are under $600. The XAU broke 130. Volume was good here as it tried to rally but the money is leaving as quick as it can. The money from commodities is finding a home in stocks. I think that is why we are rising here. Just a guess. But we are entering what should be a period of weakness. I'm going to do it. Mentally I'm trying to stay true to my conviction about getting the puts here. I'm ready to do it. Unless we are down from the open, I'll be buying some puts.

Monday, September 11, 2006

The Dow gained 4 points on good volume. Advance/declines were negative. I'm still looking to purchase OEX puts for October. We should get some type of rally here in the next couple of sessions because we are short term oversold. I am aiming for Wednesday to buy some puts. But it may not happen if we just start to fall from here. Hard to say. My mind is pretty much made up on this one though. Some data out this week and it is an expiration week. Inflation news on Friday. I hope to own the puts before then. Trying not to get too ahead of myself though. Gold lost over $20 today and the XAU got hammered, down almost 10 points. Buying puts there would have been a great trade. I don't know what that market is trying to say. Higher interest rates maybe, since it's been tied to the dollar for a while now. No inflation, as it used to be a proxy for that. Or perhaps just dollar strength to be seen ahead? It's anybodies guess, really. The XAU is at critical support here at 130. If that doesn't hold, 100 is the next stop. But really, the next trade is the OEX. Mentally I'm just trying to keep it together and not get too excited because nothing has really happened yet. The market could also do a fake-out and go higher here to new highs for the move. It isn't easy. But the warning signs are in place. It is time to get short I believe. We'll see what happens...

Friday, September 08, 2006

The Dow rose 60 points on light volume. Advance/declines were positive. I now have to decide when to buy some OEX puts. The market has told its story. The decline that has begun is for real. It's option expiration week coming up and that could give me a chance to purchase. But the timing will be difficult. There is an outside chance that we could set a new high for the year. There is also a chance that we could just start to fall. It isn't easy. I am thinking now that the day to buy puts for October will be Wednesday. But that could change. I'll need to check the economic calendar for next week. But the next trade is set. It's just a matter of when. Gold was down 7 bucks today and the XAU fell over 4 points. The volume was good on the gold shares. I need to find the long term uptrend line there and look to get long when it gets there. I don't know what the recent metals weakness is signaling. Dollar strength or perhaps economic weakness? Not sure but I'm concentrating on the overall market here. Mentally I'm trying not to get too excited over the upcoming trade. I really think that this will be one of the better opportunities this year. I am probably going to risk more than usual because of that. I need to work over the charts this weekend, establish targets and then develop the gameplan. The time is near...

Thursday, September 07, 2006

The Dow lost 75 points on light volume. Advance/declines were 2 to 1 negative. Have I missed it? Could be. But I still feel that I have a chance to purchase puts sometime next week and then hold on for good gains. I could be wrong. But my thoughts seem to be in the right place so far. Now if we just drop from here, then I misjudged things and that is possible. The summation index has now rolled over I believe. We should get some attempt at a rally next week and that will be my chance to get the October OEX puts. Gold got clobbered today, down over $15. The XAU lost over 5 points. The volume increased to the downside yesterday on the gold shares and the decline is for real. The XAU charts breakout above 150 was false and I thought that could be the case. It was a bull trap. I should have tried to play it. Perhaps there will be another chance next week there also. Mentally I'm a bit tired even though I have been getting enough sleep. I am trying to concentrate on what needs to be done here and not get upset for missing the latest trade when the order wasn't filled. Who knows, maybe I'll try the upside for expiration week. But I doubt it. For now it's a matter of waiting for some type of rally and then picking the options that I'd like to buy. I think this has the potential to be the biggest trade of the year but I don't want to get my hopes up too high.

Wednesday, September 06, 2006

The Dow lost 63 points on increased volume. Advance/declines were 4 to 1 negative. I think this was the shot across the bow. I increased my OEX put order after the bell and it did not get filled. We were down from the start. This is not the trade that I have been waiting for but that will be coming up here soon. Probably next week. This was a short term deal and probably should have been over with today. The real deal will be coming soon. The negative breadth today should get the summation index ready to roll over soon. My thinking at the moment is looking good but the market will do what it pleases. Gold was off a couple of bucks and the XAU sold off a point and a half. The volume picked up on the downside there. It could mean that the break above 150 was a trap and that the issues will head lower from here. We'll see. Mentally, I'm trying to stay patient for the October shorting of the OEX. My thinking is that we will go and retest the highs from here. That will be the time to purchase puts. However this might be the end of the uptrend today. If that's the case I will have to reassess my scenario. I'm feeling fairly confident that my prognosis will prove correct. Not any decent economic data out for the rest of the week. Todays Fed beige book was for the most part a non-event. We will have to see how the rest of the week closes out.

Tuesday, September 05, 2006

The Dow rose 5 points on light volume today. Advance/declines were positive. We are overbought. The overall market was higher. I have an order in for some September OEX puts. This will be a quick trade if it gets filled. Perhaps only 2 days if it works. I am still looking for higher prices into the expiration next week and then purchasing October puts. But right now I am getting a sell signal and I'm going to try and exploit it. Gold was up over $15 today. The XAU gapped above the 150 level. The volume wasn't heavy but all the gold shares went to the upside. I thought about getting some NEM calls but held off. I am on the sidelines there. As for the OEX trade, it isn't a lot of money. I am really interested in October puts. But this looks like it could work if I'm nimble enough. I think I am. Mentally, I'm feeling good and got a good nights rest. I also feel good that the summer is now over and we can get back into the routine of the markets trading on a normal basis. Obviously nobody is jumping in to buy the market at these levels. We'll see. The volume has been light the whole way up here and that is not a strong sign. The Fed beige book is out tomorrow and I think that will be a market mover. Not much economic data this week. We'll see if my order gets filled tomorrow...

Friday, September 01, 2006

The Dow gained 83 points on light volume. Advance/declines were about 2 to 1 positive. The economic numbers came out and we traded off of that. The OEX is about 5 points from where I'd like to short it. I'll have to check the charts over the weekend. Gold lost a little over a dollar. The XAU was up fractionally. Summer is now over as far as the markets are concerned. The real deal starts on Tuesday. I have an idea of what I'd like to do. I will firm up my prognosis this long weekend. I'm ready. I also know that I could be wrong but I will let the market dictate that. I haven't made a trade in a while and this one is longer term than I usually do. That said, I feel like this is the way to go here. We'll see what happens...