The Determined Trader

25 Guys to Avoid on Wall Street

2011-03-26T06:11:00.001-07:00

http://www.cnbc.com/id/41759013/

2010-06-14T09:15:00.001-07:00

Trading in its purists form: Tape Reading

“Whenever I read the tape by the light of experience I made money” as Edwin Lefevre wrote of Jesse Livermore in Reminiscences of a stock operator published 1923.
Before the days of computers, “flag and pennants” charts, brokers calling their clients with a “hot tip”, successful traders were reading the tape. Tape reading is trading in its purest form. Through the years the stock market has evolved. The market has seen such changes from fractions to decimals, from a specialist to a hybrid electronic, from all equities short exempt from the uptick rule etc. There remains one constant consistent way of successfully trading, Tape Reading! For over 100 years, tape reading has proven to be one of the most consistent methods of profitability for traders. In 1915 c. tape reading helped the infamous trader Jesse Livermore amasse his fortune. * (footnote Rem. Of stock operator)

To understand tape reading one must understand the fundamentals that make up the New York Stock Exchange. The NYSE trades in a continuous auction format, one that is driven higher by aggressive buyers or forced lower by aggressive selling pressure. The tape is comprised of several integral variables. The variablesare: Last Price , Last Price Size, Net Change, Bid, Ask, Bid Size , Ask Size, High, low and Volume (Pic 1) From reading the tape the trader is able to see many things, among them are the amount of stock willing to be purchased at the highest price and the amount of stock willing to be sold at the lowest price, hence the inside market. By reading the tape proficiently the trader gives himself a front row seat to watch and be involved in the auction of that equity. This will enable him to effectively detect the aggressive buyers or sellers and take positions accordingly. In addition, every successful trader knows that one must acquire a “good feel” of the market in order to be successful. Tape reading is the best way to hone that feel down to perfection. By constantly monitoring price movement of the S&P futures relative to the equities your tape reading there is no greater way to obtain an excellent feel of your stock and the market, enabling you to take calculated positions.

Tape reading is really the meat and potatoes of trading because it is taking the market and stripping away all the trickery and randomness of flashing numbers and getting down to the bare bones of what the market is, an auction.
Many things occur on the tape that one can not be seen from simply reading a chart. For instance, if stock XYZ shows 1700 shares to sell at $25.25 and one trade of exactly 1700 shares trade at that price ,then XYZ shows 2100 shares to sell at a higher price $25.29 and one trade of exactly 2100 shares trade at that price , then XYZ shows 1300 to sell at a higher price $25.33 and one trade of exactly 1300 shares trade there . Those trades are what are known as perfect prints, one trade for the exact amount of stock shown. This says to the tape reader that there is an aggressive buyer around and this could demand a large long position. Unfortunately, this would all be missed on a chart, all the chart would depict is XYZ methodically moved up 8 cents.
When you break the trade down it first happens on the tape then our computers display a graphical depiction of that trade almost instantly giving us what we know as the chart. Never forget that the tape exists with out charts, but charts do not exist without tape. For the record I have the utmost respect for the chartist, actually I know many chartists whom I consider to be some of the best traders on the street. It’s just not my game! Like anything in life, learning how to read the tape requires lots of focus, time and dedication. If you’re in it for a quick buck, I would not recommend tape reading. If you want to make a career out of trading, I recommend tape reading.

2008-11-16T19:25:00.000-08:00

2008-11-15T16:11:00.000-08:00

http://www.safehaven.com/article-11832.htm

2008-11-02T21:14:00.000-08:00

http://www.ft.com/cms/s/0/c9814b98-a5e7-11dd-9d26-000077b07658.html?nclick_check=1

2008-10-07T16:13:00.003-07:00

http://blogs.usatoday.com/ondeadline/2008/10/crisis-drains-2.html

2008-10-07T16:13:00.001-07:00

http://blogs.usatoday.com/ondeadline/2008/10/crisis-drains-2.html

How Wall Street Lied to Its Computers

2008-09-28T21:22:00.001-07:00

http://bits.blogs.nytimes.com/2008/09/18/how-wall-streets-quants-lied-to-their-computers/

Bailout failure 'will cause US crash’

2008-09-28T09:10:00.000-07:00

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3094318/Bailout-failure-will-cause-US-crash.html

2008-09-27T15:03:00.000-07:00

MARKETS WERE 500 TRADES FROM A MELTDOWN

2008-09-21T11:50:00.000-07:00

http://www.nypost.com/seven/09212008/business/almost_armageddon_130110.htm

2008-08-24T11:04:00.001-07:00

http://www.msnbc.msn.com/id/26011264/

2008-08-24T08:36:00.001-07:00

Obama, McCain, and the Stock Market

The real winner at the Olympics is ... Armenia

2008-08-14T05:30:00.001-07:00

http://africa.reuters.com/odd/news/usnSP340714.html

Thu 14 Aug 2008, 8:40 GMT
[-] Text [+]

BEIJING (Reuters) - With a population of 1.3 billion some might argue that China should be leading the medal tally at the Olympics but the real winner is ... Armenia.

The Los Angeles Times has compiled a tongue-in-cheek list of winning nations based on medals per capita and six days into the August 8-24 Games the former Soviet republic of Armenia, with population of nearly 3 million, leads with three bronze medals.

Georgia, with 4.6 million people, is in second place with two gold medals -- in men's judo and Greco-Roman wrestling -- and one bronze, while at home the nation is at loggerheads with Russia over the breakaway Georgian region of South Ossetia.

Australia, with a population of 20.5 million, is standing firmly in third place with 16 medals, including five gold medals, three of them won by rising star of the pool Stephanie Rice.

Switzerland, with 7.6 million people, won a cluster of cycling medals to ride into fourth place, with Roger Federer still in the hunt for the men's tennis title.

The alternative medal table by the Los Angeles Times had the Bahamas, with a population of 300,000, winning the medal count at both the Sydney Olympics in 2000 and the Athens Games in 2004.

2008-08-13T04:54:00.000-07:00

One Third of New Owners Owe More Than House Is Worth

China to overtake US as largest manufacturer

2008-08-11T21:35:00.001-07:00

http://www.ft.com/cms/s/0/2aa7a12e-6709-11dd-808f-0000779fd18c.html?nclick_check=1

2008-08-10T19:58:00.001-07:00

http://www.advancedtrading.com/blog/archives/2008/06/nyse_says_good.html

'NYSE Says Good-Bye to Specialists, Hello, DMMs'

2008-08-10T19:57:00.000-07:00

http://exchanges.nyse.com/archives/2008/08/hello_dmms.php

"[The NYSE] changed the actual fundamentals for the specialist role in the marketplace," says Miranda Mizen, senior consultant at TABB Group. "It's a welcome move to provide proactive liquditiy, whether it's in the form of dark or light liquidity." ...

...

..."Now [the Designated Market Makers] will need to put [their] liquidity up, so that when an order comes in, it will match against liquidity that is already there, which makes for a more proactive environment," says TABB's Mizen ...

...

"Right now the specialist has to yield to the public order flow coming in," explains the NYSE's Abrahall. Under the new plan, DMMs can trade competitively as dealers. Rather than the specialist having price-time priority, the DMM will have parity. That way everyone can get a piece of the execution, Abrahall adds. ...

...

Still, there are plenty of skeptics who argue that these changes have taken the exchange too long to implement. Nonetheless, with the NYSE announcing so many innovatigve initiatives in such a short period of time to attract liquidity and overhaul its technology, it's certainly a market on the move. And while it's hard for a 216-year-old institution to turn itself around on the fly, this one is certainly trying.

2008-07-23T14:16:00.001-07:00

Lewis Black: It's the End of an Empire sale and everything must go

2008-07-17T16:02:00.000-07:00

http://www.marketwatch.com/news/story/feds-have-shorts-run---/story.aspx?guid={3DEF4AB2-4B8F-4088-B222-F7C160C01632}

Bank failures to surge in coming years

2008-07-07T19:12:00.000-07:00

http://www.marketwatch.com/News/Story/bank-failures-surge-credit-crunch/story.aspx?guid={2FCA4A0C-227D-48FE-B42C-8DDF75D838DA}

Spire developer adds a new twist

2008-06-30T10:22:00.001-07:00

http://www.chicagobusiness.com/cgi-bin/news.pl?id=30002

By: Eddie Baeb June 28, 2008

The world's tallest residential tower is turning into rent-a-spire.

To boost condominium sales in the proposed Chicago Spire, Irish developer Garrett Kelleher is catering to investors by offering to rent out the high-priced units at a guaranteed 7.5% return for two years.

Inflation is 'exploding,' Buffett tells CNBC

2008-06-25T09:42:00.000-07:00

AN FRANCISCO (MarketWatch) -- Inflation is "exploding" and the Federal Reserve should stress that fighting rising prices is a primary goal, Berkshire Hathaway Chairman Warren Buffett told CNBC on Wednesday. The Fed should be concerned about both inflation and economic growth, a tough thing to do, he explained. But inflation should be the Fed's main concern right now, Buffett added. "Inflation is really picking up," he said. "Whether it's steel or oil... we see it every place. It's exploding." The Fed has to be very careful not to signal that inflation is a secondary concern and something that can be dealt with later, Buffett explained.

it can happen....

2008-06-22T09:50:00.000-07:00

hyper inflation

2008-06-21T08:11:00.001-07:00

http://traderfeed.blogspot.com/2008/06/using-nyse-tick-to-interpret-market.html

Set it and forget it

2008-06-16T19:51:00.000-07:00

http://www.marketwatch.com/news/story/confessions-buy-and-hold-investor/story.aspx?guid={860B0721-959B-4DA6-8631-5ECED0A11CC9}&dist=hplatest

Soon I'll be dead

2008-06-07T09:09:00.000-07:00

http://www.unknownnews.org/080607-sd2m-GP.html

....But on the bright side pretty soon I'll be dead, and make my way out of here. I'll get to escape the ugliness they've built where the United States of America used to be. You poor suckers are stuck here.

2008-06-02T22:32:00.000-07:00

Best city for traders....

2008-05-29T10:25:00.000-07:00

Chicago!

2008-05-28T13:17:00.001-07:00

2008-05-27T15:07:00.000-07:00

2008-05-26T13:08:00.001-07:00

2008-05-25T09:57:00.000-07:00

“So many people live within unhappy circumstances and yet will not take the initiative to change their situation because they are conditioned to a life of security, conformity, and conservatism, all of which may appear to give one peace of mind, but in reality nothing is more dangerous to the adventurous spirit within a man than a secure future. The very basic core of a man’s living spirit is his passion for adventure. The joy of life comes from our encounters with new experiences, and hence there is no greater joy than to have an endlessly changing horizon, for each day to have a new and different sun.”

2008-05-25T08:00:00.000-07:00

How Trading Dreams Come True

U.S. Congress could ban speculators from commodities

2008-05-25T07:44:00.001-07:00

U.S. Congress could ban speculators from commodities

Wake Up, America.

2008-05-25T07:36:00.000-07:00

...We're Driving Toward Disaster.

Day Trading Time Zones

2008-05-24T21:07:00.000-07:00

http://www.mysmp.com/day-trading/day-trading-time-zones.html

....not bad

U.S. City of the Year...

2008-05-23T18:55:00.001-07:00

Chicago

Is That Really Maria Bartiromo?

2008-05-23T18:10:00.001-07:00

The dream is dead

NYSE continues to lose market share in U.S. trading: report

2008-05-23T05:28:00.001-07:00

http://www.marketwatch.com/news/story/nyse-continues-lose-market-share/story.aspx?guid={22A90415-A86D-4CB2-B67A-8AE6E87F4879}&dist=hplatest

BOSTON (MarketWatch) -- Volume on the New York Stock Exchange has dropped 26% in the second quarter to the lowest levels since 2001, even though total trading in U.S. stocks rose, as alternative equity markets continue to take market share, Bloomberg reported. Firms such as Bats Trading Inc. and Direct Edge ECN are winning more business, according to the report. Market forecasters who use technical analysis say relying solely on data from the NYSE and Nasdaq Stock Market may create an incomplete picture as alternative venues take more trading volume, Bloomberg reported. Shares of NYSE Euronext are off more than 25% year to date, while Nasdaq OMX has lost more than 33%.

Oil: A crowded trade with morons that will get hurt

2008-05-22T05:33:00.000-07:00

Oil's perfect storm may blow over

'Squawk Box' Guest Warns of $12-15-a-Gallon Gas

2008-05-21T15:29:00.000-07:00

http://www.businessandmedia.org/articles/2008/20080521145247.aspx

“[Maxwell] expects an oil-induced financial crisis to start somewhere in the 2010 to 2015 timeframe,” Energytechstocks.com reported. “He said that, unlike the recession the U.S. appears to be in today, ‘This will not be six months of hell and then we come out of it.’ Rather, Maxwell expects this financial crisis to last at least 10 or 12 years, as the world goes through a prolonged period of price-induced rationing (eg, oil up to $300 a barrel and U.S. pump prices up to $15 a gallon).”

Classic

2008-05-19T14:43:00.000-07:00

"The lawsuit also says that the LifeLock CEO's identity is currently being used by about 20 identity thieves."

http://www.associatedcontent.com/article/438988/lifelock_ceo_becomes_identitytheft.html

Wow is this my America?

2008-05-18T21:16:00.000-07:00

Either this is a glimmer of hope for this country that someone so important can draw this big a crowd, OR this size of the crowd is relative and Paris Hilton can still pull 3 times more people giving a speech about her experience at the nail salon....

Reconstruction Central

2008-05-05T14:59:00.000-07:00

http://www.russell.com/indexes/membership/Reconstitution/default.asp

Buffett says recession may be worse than feared

2008-04-28T12:12:00.000-07:00

...my general feeling is that the recession will be longer and deeper than most people think...

Load Up the Pantry

2008-04-25T13:10:00.000-07:00

"If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age."

nice

2008-04-23T13:49:00.000-07:00

It's not just inflation — it's hyperinflation!

2008-04-22T17:30:00.000-07:00

Familiarize yourself with it, so you can use it in normal conversation when it happens, somewhere someday...who knows where and when. Just....know what it is soon

http://network.nationalpost.com/np/blogs/posted/archive/2008/04/16/primer-it-s-not-just-inflation-it-s-hyperinflation.aspx

http://en.wikipedia.org/wiki/Hyperinflation

California foreclosure "surge": Up 327% from '07 levels

2008-04-22T17:26:00.000-07:00

The number of California homes lost to foreclosure in the first quarter surged 327% from year-ago levels -- reaching an average of more than 500 foreclosures per day

A new brain-scan study may help explain what's going on in the minds of financial titans when they take risky monetary gambles

2008-04-06T11:38:00.000-07:00

- sex.

2008-04-05T16:21:00.001-07:00

Oh please....

2008-04-02T10:01:00.000-07:00

Short selling rule change hurts market

USA 2008: The Great Depression

2008-03-31T18:10:00.000-07:00

USA 2008: The Great Depression

return of the Gilded Age

2008-03-22T12:39:00.001-07:00

On board the world's first 'gigayacht': The £100m luxury yacht with its own garden, pool and tennis court

Argument...counter Argument

2008-03-21T19:49:00.000-07:00

Can You Afford Not To Watch Jim Cramer?

Pay No Attention to That Crazy Man on TV

guess who?

2008-03-18T23:16:00.000-07:00

SEC Obtains Emergency Orders Against California Firm Defrauding Day-Traders

2008-03-18T03:44:00.000-07:00

http://www.mondovisione.com/index.cfm?section=news&action=detail&id=73092

06/03/08

The Securities and Exchange Commission today announced that it has obtained an emergency court order against an unregistered securities day-trading firm in La Jolla, Calif., that was not disclosing to traders that more than one-third of their money was being used to cover other traders' losses or pay firm expenses. The SEC's complaint alleged that approximately 35 percent of their equity was diverted, leaving an approximately $3.62 million shortfall in the traders' equity as of Dec. 31, 2007. In issuing the emergency orders, the court found that the SEC had shown that the day-trading firm was violating the broker-dealer registration and antifraud provisions of the federal securities laws, and ordered the appointment of a temporary receiver to safeguard customer assets.

The SEC charged Tuco Trading, LLC, and its principal, Douglas G. Frederick, with violating broker-dealer registration and antifraud provisions of the securities laws. According to the SEC's complaint, the defendants provide securities day-trading capability to Tuco's more than 250 traders who had approximately $10.2 million invested in Tuco. They permitted traders to day-trade securities in Tuco's own brokerage accounts at registered broker-dealers through sub-accounts created at Tuco for each trader.

The defendants enticed traders with services unavailable at a registered broker-dealer. As alleged in the complaint, they allowed traders to day-trade without meeting the $25,000 minimum equity requirement under NASD regulations for such trading. The SEC's complaint also alleges that for each $1 in the trader's sub-account, Tuco and Frederick allowed the traders at Tuco to use up to $20 of Tuco's equity, which has been invested by other traders, to purchase securities (20:1 buying power). NASD and NYSE regulations, however, only allow a day-trader to have 4:1 buying power.

"Tuco provided traders with trading capability not permitted at registered broker-dealers," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "This case warns investors that the additional trading capability comes at a steep price — the safety of their money."

Rosalind R. Tyson, Acting Regional Director of the SEC's Los Angeles Regional Office, added, "Tuco's unregistered operations posed a substantial risk to both investors and the securities markets, and we will act to stop these operations."

A day-trader actively buys and sells securities, often on the same day, and hopes to make a small profit on each buy-and-sell transaction.

The SEC's complaint also alleges that Tuco received transaction-based compensation for its members' trading, and Tuco's traders conducted substantial day-trading through Tuco's brokerage accounts both in dollar amounts and number of trades. As a result, Frederick earned substantial commissions on the trading as the registered representative for the Tuco principal accounts at the registered broker-dealer. The SEC alleges that Frederick then used substantial amounts of his commissions to pay Tuco's operating expenses.

The SEC's complaint also details the defendants' inaccurate reporting of the traders' equity balances. As of Dec. 31, 2007, Tuco and Frederick used about $3.62 million of the traders' approximately $10.2 million total equity to pay Tuco's expenses and to cover trader losses. Approximately a $1.35 million shortfall remained as of Jan. 31, 2008. Tuco and Frederick failed to disclose those details or that Tuco and Frederick's recovery of the shortfall in the traders' equity is dependent on Frederick's recovering the funds from third parties.

U.S. District Judge Dana M. Sabraw of the U.S. District Court for the Southern District of California found that the SEC had made a prima facie showing that Tuco and Frederick have engaged in, and will continue to engage in future violations, of the broker-dealer registration and antifraud provisions of the federal securities laws, appointed a temporary receiver as a monitor over Tuco, and issued orders against the defendants for accountings, expedited discovery, and prohibiting destruction of documents.

Oops - CNBC's Cramer Said 'Don't Move' From Bear a Week Before Collapse

2008-03-17T16:31:00.001-07:00

'Mad Money' host drastically underestimated the investment bank's trouble surrounding the mortgage crisis.

today....

2008-03-17T02:31:00.001-07:00

i wear my lucky watch to work.....my prediction is we rally.
come visit and say hello

Quantum's Jim Rogers says US 'out of control'

2008-03-17T01:36:00.001-07:00

The dollar may have declined recently, he added, “but you ain’t seen nothing yet”.

Jim Rogers: 'Abolish the Fed'

2008-03-17T01:34:00.000-07:00

Asked what he would do if he were in Bernanke's shoes, Rogers, who slammed the Fed for pouring liquidity in the system and accepting mortgage-backed securities as guarantees, said: "I would abolish the Federal Reserve and I would resign."

http://dictionary.reference.com/search?r=2&q=crescendo

2008-03-17T01:32:00.000-07:00

cres·cen·do (krə-shěn'dō) Pronunciation Key
n. pl. cres·cen·dos or cres·cen·di (-dē) A steady increase in intensity or force:

2008-03-17T01:28:00.001-07:00

made me giggle...

2008-03-17T01:20:00.000-07:00

"Ben Bernanke is someone who loves inflation so much that he would be willing to have non-stop anal sex with it if he could."

We will never have a perfect model of risk

2008-03-16T23:12:00.000-07:00

The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities.

2008-03-16T21:53:00.000-07:00

tell me this isnt real...

2008-03-16T20:48:00.000-07:00

I am not to familiar with trading but I got a tip that this stock was
cheap and when things get better it will go to 160 again. I bought
3000 shares, somehow I was able to buy more shares than I thought and
this is my savings. I am getting these margin alerts what is that and
it says I will be closed out today? Help!! what is going on!

I wonder if he got his penny...

2008-03-16T12:00:00.001-07:00

8/26/2006

2008-03-16T03:25:00.001-07:00

How to turn $825,000 into $30,250,000...

2008-03-16T03:17:00.000-07:00

http://www.thestockmasters.com/node/404

http://www.thestockmasters.com/node/406

let's see here....

2008-03-09T18:24:00.000-07:00

yup, sounds about right.

How This Economy Is Going To Play Out

Do you consider yourself a boring person....?

2008-03-02T09:53:00.000-08:00

...Maybe you truly aren't a trader.

Cross-Talk: Why Good Traders Aren't Boring People

The Personality of the Trader: How It Affects Performance

More Dark Pools= More Tape Reader Edge

2008-03-02T09:46:00.000-08:00

Technology has set the pace of growth among US managers

Is the tape whispering a fib?

2008-03-02T09:18:00.000-08:00

Builder stocks bounce -- so why are CEOs still wary?

2008-02-17T22:19:00.000-08:00

...and continues....

2008-02-07T18:16:00.000-08:00

"If our current account deficit keeps running at present levels, the dollar I think is almost certain to be worth less five to ten years from now compared to other major currencies,"

...and so it begins.

2008-02-06T20:05:00.000-08:00

"Euros Accepted" signs pop up in New York City

Someone elses trading commandments

2008-01-26T21:04:00.000-08:00

I have my own list of 10 commandments which i feel are accurate toward my team and tape reading. My list is more appropriately called "10 ways to preserve capital" This list delves deeper into the emotions of trading which mine just grazes. This list is just as powerful.

The Ten Trading Commandments

Respect the price action but never defer to it.
The action is an important element when trading but if you defer to the flickering ticks, stocks would be “better” up and “worse” down—and that’s a losing proposition.

Discipline trumps conviction.
No matter how strongly you feel on a given position, you must defer to the principles of discipline when trading. It will differentiate your performance over the course of time.

Opportunities are made up easier than losses.
It’s not necessary to play every move, it’s only necessary to have a high winning percentage on the trades you choose to make.

Emotion is the enemy when trading.
Emotional decisions always have a way of coming back to haunt you. It’s that simple.

Zig when others Zag
Sell hope and buy despair. In other words, take the other side of emotional disconnects in the market.

Adapt your style to the market
At various junctures, different approaches to the market are warranted. Applying the right trading methodology is half the battle.

Maximize your reward relative to your risk
If you’re patient and pick your spots, edges will emerge that provide a more advantageous risk/reward profile.

Perception is reality in the marketplace.
Identifying the prevalent psychology is a necessary process when trading. It’s not what is, it’s what’s perceived to be that matters.

When unsure, trade “in between”
Your risk profile should always be a reflection of your thought process. Take what the Minx will give you and don’t press.

Don’t let your bad trades turn into investments.
Rationalization has no place in trading. If you put a position on for a catalyst and it passes, take the trade—win or lose.

taken from:
http://bigpicture.typepad.com/comments/2005/05/the_ten_trading.html

Cramer v. Santelli

2008-01-22T23:32:00.000-08:00

http://www.cnbc.com/id/15840232?video=626596283&play=1

2008-01-22T23:22:00.000-08:00

http://www.newsgroper.com/ben-bernanke/

2008-01-22T19:35:00.000-08:00

What is market capitulation?

2008-01-21T19:52:00.000-08:00

What is market capitulation?

2008-01-21T19:39:00.000-08:00

25 rules of trading discipline

2008-01-21T19:24:00.000-08:00

Some Personal Thoughts on Embracing Trading Mistakes

2008-01-14T18:25:00.000-08:00

Some Personal Thoughts on Embracing Trading Mistakes

Tune yourself to think profitably.

2008-01-13T19:35:00.000-08:00

Much of becoming a good trader is turning day to day pragmatic life intuition into market intuition. For example....

Countrywide has takeout rumors:
street intuition - buy CFC stock (common)
market intuition - buy CFC bonds (bonds will become whole and paid if sitting on BAC's books)

Monthly crop report indicates an over abundance of corn in the market place, corn prices plummet:
street intuition- "i wish i could short corn"
market intuition- long MON, the creator of the frankenfood corn.

KBH releases earnings stating a HUGE charge off, negative growth, and forecasts a poor near term future...stock trades up:
street intuition- "Jeez these home builders are taking a beating, look at all the money those shorts made"
market intuition- "The tape is predicting a less dismal future and this may be a bottom, look for more pieces to the puzzle to prove this theory."

Circuit City hits an all time low price:
street intuition- "Wow, this stock is cheap ill buy some, how much further can it go? Look at all this room it has to move up! I know CC, they have stores everywhere"
market intuition- "Stocks at all time lows have got there because of HEAVY selling, the tape never lies, this stock is untouchable. Is the retail technology sector dead? If not, which stock has held up the best, maybe I can buy that for a turn around....GME near it's 52 week high? they must be doing something right even when times are bad. THAT'S what ill buy."

Market dives off its highs, while a stock sits at its 52 week high:
street intuition- "This stock is too over run, I'm way too late. I need to buy something cheaper and out smart the market, so when the market turns this stock will come up."
market intuition-"This stock will not sell off even in a market dive. What does everyone know that they won't sell their shares while people divest from the whole market? This stock has much more upside."

This rule will hold true throughout, and is one of Wall Street's best kept secrets:

IF THE MARKET MOVES DOWN AND YOUR STOCK DOES NOT MOVE DOWN, WHEN THE MARKET MOVES UP, YOUR STOCK WILL GO UP WITH THE MARKET.
also,
IF THE MARKET MOVES UP AND YOUR STOCK DOES NOT MOVE UP, WHEN THE MARKET MOVES DOWN, YOUR STOCK WILL GO DOWN WITH THE MARKET.
________________________________

A bit of a rant, but how does one replace their unprofitable street intuition for profitable market intuition? My experience has taught me only hard work creates the profitable mindset. There is a lot of reading involved and a lot of "I was there to see it happen" foot work. The following are sources which I feel should be read on a weekly (if not daily basis). Important to note, we aren't investing here, but we are trading.

http://investors.com - hands down #1, should be read daily, Monday edition EVERY week
http://elitetrader.com - what is everyone else doing, trading, talking about?
Keep up to date with ALL news headlines. some great sources are Esignal News, http://theflyonthewall.com. If a company moved up/down 10%, you should know why.
Watch Mad Money and Fast Money on CNBC EVERYday. Cramer and the circle of traders know more than you, and are sharing their thought process about what they see.
Read the book "Reminiscences of a Stock Operator" Jesse Livermore could trade his way into a millionaire. All he needed was 50 cents, time, and the tape.
Read the book "Trading in the Zone." Reposition your emotions from being a street thinker to a market thinker.
Listen, watch, talk to, ask questions and learn from other great traders. I personally read many online blogs. Some are: Between the Hedges, Trader Mike, MarketWatch Blogs, Kirk Report
Aside from blogs, find great news sources with editorials. Here are a couple I read regularly: MarketWatch, Seeking Alpha
Bottom line, educate yourself, spend time by combing over the news, read and understand what you read. This isn't a hobby, you aren't working for a boss, you are creating a millionaire's thought process which can yield you great sums of money with the correct mindset.

Why do people love to trade? because not only do they have the freedom to make autonomous decisions, but they are in a position to profit HANDSOMELY when you are correct. We aren't talking an extra 30 minutes for lunch because your boss told you you finished that report on time, we aren't talking an extra day of paid vacation because the companies bottom line was $1 million higher than projected. We aren't talking a company dinner where your boss pats you on the back for working your ass to the nub, telling you how much they appreciate you all the while paying you JUST ENOUGH To keep you around, but not too much where you wont work as hard. We are talking $783,385.08 NET because you were smart enough to see BAC was about to bid for CFC. The ability is in your hands, the question is, is your mind equipped to send the order to execute the CORRECT transaction in the right place at the right time.

while everyone was fighting for common stock...

2008-01-13T11:07:00.000-08:00

Countrywide Bonds Beat Stocks After Takeover Offer

Jesus those comments are brutal!

2008-01-11T23:25:00.001-08:00

stick to reading the teleprompter.

10 Ways to Improve Your Market-Timing

2008-01-02T23:30:00.000-08:00

10 Ways to Improve your Market-Timing

great read.

#10 Read the Tape: The numbers on your trading screen are far more important than the pretty pictures they draw on the charts. Memorize key levels on your favorite stocks and then watch what happens whenever price approaches one of these inflection points. Yes, tape-reading takes years to learn, but it gives you a lifetime edge, so it's worth the effort.

2008-01-02T23:14:00.000-08:00

Lightest Volume Week of the Year

2007-10-16T11:02:00.000-07:00

http://runningofthebulls.typepad.com/toros_running_of_the_bull/2007/10/lightest-volume.html

Last week was the lightest volume week of the year, with an average NYSE daily volume of 1.099 billion shares. Four of the 10 lightest trading days of the year were last week, with the second lightest on Monday (Columbus Day), the fifth lightest on Friday, the seventh lightest on Wednesday and the tenth lightest on Tuesday.

Of course, markets can still rise on light volume. The danger, however, is that it doesn't take much to knock the market down, as we saw on Thursday when volume came in at 2pm and the S&P 500 fell 200 points from the high.

The market has risen 14% off the lows August 16 lows. However, this rally has been on the back of seven of the eight lightest volume weeks of the year. The market is not rallying on a sturdy foundation.

Morgan Stanley Traders Lost $390 Million in One Day

2007-10-12T09:10:00.001-07:00

http://www.bloomberg.com/apps/news?pid=20601087&sid=aY4.Y24hPlxQ&refer=home

Oct. 10 (Bloomberg) -- Morgan Stanley, the world's second- biggest securities firm, said its quantitative strategy traders lost $390 million during a single day in August as their computer models failed to account for ``widespread'' investor selling.

The company's traders lost money on 13 days during the quarter ended Aug. 31, the New York-based firm said in a quarterly regulatory filing today. ``The largest loss days resulted from losses associated with quantitative strategies in early August 2007, when these strategies were adversely affected by widespread portfolio reductions,'' the company said.

Morgan Stanley said last month that the quantitative strategies group lost $480 million during the quarter after being caught off-guard when other investors sold securities to reduce borrowings. Separate areas of the equity sales and trading unit made up for the losses, enabling it to report $1.8 billion of revenue for the third quarter, up 16 percent from a year earlier.

The firm's quantitative trading group, like hedge funds run by Highbridge Capital Management LLC, Tykhe Capital LLC and Goldman Sachs Group Inc., uses mathematical models to pick investments.

Such ``quant'' models began posting steep losses in late July and early August as surging defaults on subprime mortgages triggered a crisis of confidence in credit markets. Stock-market declines followed. The funds were forced to sell more-liquid stock investments to raise cash and reduce debt.

The selling confounded the funds' computer models. Stocks that they anticipated would decline in price rose, and shares that they expected to rise instead fell.

Morgan Stanley disclosed today that daily trading losses during the quarter exceeded the firm's trading value-at-risk calculation on six days during the quarter.

The filing with the U.S. Securities and Exchange Commission also shows that the firm's traders generated more than $100 million of revenue on about 19 days during the quarter.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net .
Last Updated: October 10, 2007 17:56 EDT

Life is about accomplishing your dreams and NOTHING else

2007-10-06T13:04:00.000-07:00

Dying 47-Year-Old Professor Gives Exuberant ‘Last Lecture’

New reserve display requirements take effect tomorrow, 4 October

2007-10-06T10:24:00.000-07:00

http://exchanges.nyse.com/archives/2007/10/reserve_display.php

Beginning on October 4, 2007, the NYSE is reducing the minimum displayed size requirement that Floor brokers and specialists must meet to 100 shares1 in order to have non-displayed interest at the NYSE quotation.

The NYSE is retaining the ability for Floor broker and specialist reserve interest to automatically replenish the displayed amount of interest at the NYSE BBO when trades reduce or exhaust such displayed interest. As before,, the displayed quantity will be replenished based on the initial instructions from the Floor broker or specialist.

Example:
Assume a Floor broker or specialist had originally placed 2,000 shares in reserve and had given instructions to maintain 500 shares as a displayed amount in the quote. If an execution takes place which reduces the displayed amount to 200 shares, 300 shares would be shifted from the reserve to replenish the displayed amount.

The NYSE also is retaining the way in which the residual reserve amounts are handled: if the remaining reserve quantity is less than the amount to be displayed then the remainder of the reserve interest will be displayed in full.

Example:
Using the facts of the aforementioned example, if only 200 shares of the original reserve interest remains then the displayed quantity will be the final 200 shares, bringing the total displayed amount to 400 shares.

When entering reserve interest, brokers should be mindful of their best execution obligation to their customers, and should ensure that their choices as to the size of the displayed amount (and the replenishment amount) are consistent with that obligation.

The idea behind this is that brokers will be better able to represent the interests of their customers without tipping their customers' intentions to the world, thus getting a better price and fill. Specialists will be able to add depth more freely without exposing their positions to competitors. The desired end result is that customers will be able to access a deeper pool of liquidity and thus get better trade executions.

Sorry to post this so late in the day, but my today was pretty much like this: meetingmeetingmeetingmeetingsandwichmeetingmeeting...you get the idea. I'm now on my train, where the connectivity is sometimes a little dodgey but the only meeting to be had is meeting the guy sitting next to me who just got on at Secaucus and smells like a Schlitz. But he's reading the Post sports-page-first, so he can't be all bad.

INactivity

2007-10-06T10:22:00.001-07:00

With nothing more I feel I need to communicate to myself on paper, I am converting this blog to a posting area for important links, articles, news releases, or whateverthehell I feel is noteworthy for myself or my team.

Ten Commandments of Tape Reading

2007-01-26T16:36:00.000-08:00

The Ten Commandments of Tape Reading

The Golden Rule, only long stocks you expect to move thru the high and short stocks that you expect to move thru the low.

In a market that is moving up, ALWAYS be net long. In a market that is moving down ALWAYS be net short.

NEVER under ANY circumstances add shares to a losing position.

When your reason to be in a stock is gone, you MUST be out of that stock, under no circumstances do you hold “to see if it’ll come back.”

If there is nothing to trade, you trade nothing.

The .00 and .50 will ALWAYS add to the story of the tape. In big long positions, offer some shares out at .49 and .99. In big short positions offer some shares out at .51 and .01 to bank a profit.

Reading the tape with tight exits is much more difficult in oil, commodity, retail, and financial stocks. Also watch out for stocks that trade over $60 a share, and stocks that gap at the open $3 or more.

If you missed the proper entry, sit pat until another entry develops. Do NOT force an entry when you missed the correct entry.

If the stock makes a VERY good move on the tape, trading the stock after the easy money is gone (EMIG) will be like trading a TOTALLY different stock.

When you close a position in the negative, bring down your position size for the next trade in that stock. If you lose three times in the same stock, consider not trading it anymore unless the perfect spot develops.

2006-04-21T20:04:00.000-07:00

i had, for the first time in a LOOONG time, a FULL week of updays...5 of em! The odd part of it all is my trading volume was INTENSELY low. 15,000, 17,000, 10,000, 8,000, 4,700, respectively. The ODDEST part of the whole week was that my profits were very respectable.

This is an unfinished post from April 06 which is being posted AS IS

2006-04-18T01:44:00.000-07:00

Wow, I cant belive its been a month since I have posted. Feels like almost a week at most.

My losing streak came to a plateau a couple weeks ago, and now im starting to close up. Nothing amazing, but its up. I feel as though I am comming as close to where I was when I had my 10 days of BIG gains in a row as I have been since then. Most of the success is accredited to not trading the morning. Trading the morning really jilts your thinking. For the first 30-45 minutes the stocks are so swingy that you feel they are after you PERSONALLY, so when they look nice you dont touch them why? Well, hes WAITING for you to get in right? wrong! When I dont trade the morning I dont have the negative history with the stock and I read it with a fresh mind, chalking all it did earlier in the morning as regular morning trading which I dont involve myself in, so it doesnt phase me....

This is an unfinished post from April 06 which is being posted AS IS

A few revelations from a few days of trading.

2006-03-14T12:09:00.000-08:00

Been a rough couple days. Not terrible losses, but not closing up. I have been writing things down in the day,. Just short statements that I need to embed into my trading. I will type them out and write a little bit about them now.

To make sure the trade is as unemotionally attached to money as possible, try to get your entries RIGHT where the turn is, from strength to weakness, from weakness to strength. It is difficult to buy a stock as he moves higher because it is near a guarantee that it will be out of the money for you, keeping your finger on the button, and making the trade emotionally attached to the idea that you are losing money..

Always get the entry as the stock is turning so you have the best pricing. In addition, you can get best pricing by having an offer or bid near the buyer or seller. For example, BOL today was very weak, and he was trading around the .70-.80 range, but he LOVED snapping it up to .00 just to play around with you. Now, you can go to the market to short it because he is trading a lower range in the mid 70s or so, but putting an offer out in the mid 90s gives you better pricing, and IMMEDIATELY puts you into the money. This allows you to settle down and let the trade do whatever it wants without having to worry about taking a major loss.

If the stock wants to be strong all day, and if you have interest in holding it all day, it should continuously break the higher range and trade into a higher range. If the stock moves lower and trades a lower range, you may want to take some profits as it tries to move into a lower range from there. Perhaps this isn’t the time to hold it, and you will get a better entry.

Try to find out where the stock is printing a lot of shares, where the buyer and seller are trading a lot of shares back and forth to each other. It shows that this price is critical in the future movement of the stock.

If you can’t spot a general trend, you will be whipsawed by unpredictable buyers and sellers who will control the stock. If you are involved in a stock that you really aren’t reading well, you will soon be faced with something that IS readable, and chances are good its going to be an aggressive move against you. (plus tick bidding buyer taking a decent position, moving the stock just enough to put you out of the money and in an uncomfortable situation.)

If a stock is trading in a range, lets say between 60-80, and now it is trading between 70-80, then eventually at the 80. You need to be involved in some way, because you will be adding as he moves higher then 80 and chances are he will be moving very quickly, because late comers are waiting for the .81, but you spotted the buyer earlier as he supported the stock hugging the .80.

Is the stock doing what you expected it to do? if not, what you saw is probably gone. If a stock is showing a definite sign of soon to come movement, and it doesn’t move soon, it likely is because someone is holding it down, that same someone is going to move that stock lower. Keep the position light until he starts doing what you expected.

Especially in the morning, if a stock is trading a lower range, or trading a higher range, you need most of your shares in the SECOND higher or lower range, not the third, or fourth. By then it is too late and you missed your perfect entry.

If a stock looks weak because you have spotted a seller, and the stock eventually goes thru that seller, it doesn’t take away the fact that the seller exists. You very well might see him later in the day. Make sure as the seller is taken out in a specific area, that he is done. Many times he prints thru it and comes right back because the seller is just taking their time to reload some more shares. A small seller that gets taken out is still a sign that this stock has sellers in it. Until proven otherwise, or the seller was MAJOR, you still want to be bearish on the stock.

DONT TRY TO PREDICT WHERE THE STOCK WILL BE IN 5 MINUTES. YOU ARE TRYING TO PREDICT WHERE IT WILL BE IN 1 HOUR. This means you need to consider the futures, the general trend, the vigor of the trades in the stock, and your entry.

If a stock has issue going thru its high or low, it should DEFINATELY go thru the second time around. The buyer/seller has a certain number of shares and their program kicks on to take those shares at a certain price. If the stock is able to make it back to that initial price, it is definitely going thru it. If not, chances are this buyer/seller is going to take a lot to go thru and you shouldn’t allow the stock to go against you because they might control the trend of the stock very soon against you.

You don’t have to be at a loss to get out of your shares. If the stock isn’t SOON doing what you expected, then likely what you saw wasn’t as significant as you expected. Get out before your exit is tested and eventually pushed thru for a lose that you shouldn’t have taken. You KNOW this feeling. "He shouldn’t be trading here anymore after what I saw" Something isn’t right and you need to revaluate this trade. This is especially seen on Fridays because buyers/sellers are much smaller and show up spontaneously to get a handful of shares and then they are gone.

On Fridays, buy the end of weakness and short the end of strength. Entries are VERY important. It is very hard to buy into strength and short into weakness with smaller buyers and sellers. You need those good entries to make sure you have some leeway, and some room to be able to read how big the person moving the stock is. Chances are good they aren’t as big as you expected on a Friday.

There is an advantage to getting out, and looking for reentry. It makes you more conscious to letting a stock go that is weak. Instead of thinking ”i can afford a pullback" you are actually thinking "i don’t want to get involved in a stock that doesn’t look as strong as it use to."

IMPORTANT: Unless there is a freak movement, losses shouldn’t be but .10, .15 cents, meaning entries are for VERY specific reasons, and VERY definite and visible patterns. There shouldn’t be a time where you get into a stock because it may move .20 when the pullback can easily be .40. It’s a losing equation.

Try using more limit orders to short and buy. This makes for better pricing near where you saw the reason to get involved. Many stocks you see a reason at .20 and you get filled at .05 Not only does that take away from your profit, not only is that an extra .15 loss if you have to get out, but it also plays with the leeway you can give the stock, and the objective setting of being in the trade.