December 27th, 2007 Review
TIM $14,222 (down $287 on the day)
Lots of Trades, Only Short 500 NG @ $8.25 Overnight
I am trading too much. Waaaay too much. Only after losses do I realize this, which is sad. After closing my positions and filming a quick segment for AOL this morning, I should’ve been happy with TIM reaching a new all-ti
me high at $14,559. But no, I wanted to get to $15k by month’s end. Stupid, key TIM Lesson: never set profit goals, you can’t force opportunities!
So, I shorted 300 shares of (Nasdaq: CTDC) at $8.69. The stock had dropped all the way to $8.10, so I figured shorting into the mid-day bounce would be a good plan to pick up a quick ½ point and probable gap down tomorrow. Sure, there was a risk the stock could come back, but the chances of that happenening weren’t very great.
Wrong.
After watching the stock gather steam and break $9, I said screw it, gotta cover, gotta protect the account. Unfortunately, the short squeeze was on and within 5 minutes, CTDC jumped to the $9.30 range and every time I placed my limit orders to buy to cover, the stock ran ahead of me. This has happened to me many times before, so I knew I just had to get out ASAP. When the price was $9.50, I put my limit at $9.65 and got out, right at $9.65, a $300 loss that nearly wiped out all the good little trades I’ve done this month. Now I’m up $75ish on the month with $200+ in commissions. Pathetic. That’s trading for you – undisciplined trading that is. And that’s why it’s so important to guard against losses like these. I was right to cover as the stock surged to $11ish, accomplishing the near impossible (although it failed to hold its gains at the market close, finishing around $10). Really gotta wait to short/buy breakouts near the market close as mid-day entries increase the risk of loss substantially – it’s just not worth it. Need to focus on using the market close more.
Right before the close I also shorted 500 shares of (NYSE: NG) at $8.25. Fundamentalists will say it’s undervalued, short sellers will say the company just screwed up big time and the stock deserves to go lower. Both are right, but what matters to me is the chart pattern. Take a look at it, notice anything special?
That’s right; this is The Sykes Pattern in full force, no different than JMBA, ASHW and CPWM. I was right on all three of those, but I also screwed them all up – hopefully this time I’ll do better. All I want is ½ point, it’ll be interesting to see if it can hold $8 tomorrow morning.
Also watching: (Nasdaq: SVNT) – thought about shorting into the close, first down day in a while…(Nasdaq: CBAK) – 2nd big up day, thought about shorting into close, but probable morning spiker as it still finished up on the day, potential afternoon fader on Friday…(Nasdaq: CSUN) –2nd big up day, same as CBAK, but stronger…tomorrow will be interesting, I have no bias, but I know there are many short sellers so a Friday squeeze is possible/probable…(Nasdaq: SOLF) – thought about shorting into the close, 1st down day, will likely gap down, but these solars are a sketchy bunch, so I stayed away…(Nasdaq: ADPI) and (Nasdaq: DOCX) both up 75%+, but settlement and acquisition news, respectively, mean the stocks will have little volatility, so I wasn’t/am not interested
(OPTT) – the wave energy play I wrote about last night surged for a big 2nd day, I’m hoping it goes higher yet again, so I can short it either tomorrow or Monday.
