Monday, November 30, 2009

Ooohhh? I Love Doing My Own Homework!

Some more below book value finds and since these are already in my portfolio, I'll share:


This other one, I'm going to keep for myself - top secret.

I'll give you a hint: it was mentioned on recently.

Do your own homework: I got these book values off of Yahoooooo Finance.

Whoa... 'Tis the Season To Be Shopping!

There are still companies trading below their book values in this market?! I thought those were extinct already, but 'tis true and 'tis delectable as hot cocoa! I found just one so far, but one's enough! I am going to keep mum on this so no one else buys it up before I get a chance to. Ever since I saw that Vikram Pandit video where he talked about arbitrage, I've decided I have to be much more mysterious.

If only I wasn't so into PDO now, I'd buy it right away. But 'tis still the season to be shopping.

I'm going to go OTT overboard with my online shopping later today. It seems like my portfolio's not the only thing that's some 40% off.

Today, I'm also eyeing USD/CHF. I'm also going to look at gold and oil, which has been one of my better habits lately. Gold and oil, let me count the ways...

Sunday, November 29, 2009

Turkey Lurkey & Chicken Little?

When I was growing up, we rarely had turkey at the Thanksgiving table. We tried it, but since it usually ended in a major culinary disaster, we were more roasted chicken kind of people. Then, we started doing Peking duck one year and loved it so much it became a tradition for at least three years. Now, since I'm in Belgium, I've turned the turkey sandwich into a tradition. They don't do turkey here unless it's Christmas, so it's basically the easy route out.

Last week, I did nothing more strenuous than filing my proof of claim for the Finlay bankruptcy since I was a bitter, emotional basketcase, if I must say so myself. But this week, I am going to seriously put the past behind me and focus on maximising my trading for the remainder of the year. I promised myself I would improve my trading and although this trading year has been a bit disappointing, we've still got four more weeks to go - and they could be productive ones.

When the Dubai story broke, I was fairly oblivious, then started thinking this Dubai story could be the biggest thing since Chicken Little announced the sky was falling. My portfolio was down a painful -2.24% on Friday. Who knows? My take on Dubai could possibly turn into an actual Chicken Little incident
since the UAE Central Bank offered an additional line of credit for all foreign and international banks operating in the UAE. I could be the woman who cried Foxy Loxy.

If the Dubai incident fails to shake the market very substantially, I think we have good reason to be bullish once again. It signals that the sky is not falling - at least not until the next Chicken Little incident comes along.

Friday, November 27, 2009

Bingo! Eureka! Dubai = Du Bye Bye

Oh, dear God! I open and for the 50,000th time this week, I see something about Dubai. Dubai this... Dubai that... Everyone hearts Dubai - or unhearts it, rather. Just when I was about to scream "enough already!"... it dawned on me... CIT's bankruptcy received less than a day's worth of media coverage.

The fact that the coverage on Dubai has been going on since at least Thanksgiving Eve indicates intense investor interest - and potentially lots of money involved and capital BIG bandaid ripping potential.

I should be looking for potential gold-digging - ahem, trading - opportunities. But what?

And I am probably on the brink of being on the fashionably late side.

Better late than never?

Oh, it's never too late to play the fashionably late card when it comes to trading.

Thursday, November 26, 2009

Look, Don't Touch!

No trading today, but... Lachlan Murdoch... sends the heart racing.

This certainly reinforces the viewpoint that all the good men are taken!

Wednesday, November 25, 2009

The Alpha Male Factor?

So there is something about alpha males - at least according to FT...

Note that the author is male, which means I'm trying to toss you an excuse that this article is not in any way sexist, which I think it is even if it was written by a guy. It's a bit like those research reports that try to justify that men inherently have a natural inclination to cheat, isn't it? It's like me with my remarks about alpha males. I do secretly like guys that are just a little on the alpha side, but not too much. Alpha alone, like the article suggests, is not enough.

Anyway, I digress.

Today, I am looking for opportunities to fade a move. I'm going to pay attention to gold and oil again, especially after
the Fed has suddenly become concerned with "excessive risk-taking."

That water is ice cold, Bernanke! Here's a guy who can use a bit more alpha!

Tuesday, November 24, 2009

More About PTF ABK...

Apparently our PTF had some bit of interesting news out today... its CFO resigned to pursue other interests.

Not only is that not a valid excuse, but what kind of euphemism is that?

In case anyone was wondering, I have both ABK shares and an Ambac bond issue, with the majority of my position invested in the bond issue.

Shiny Happy Forex Traders...

Whilst I'm definitely not going to be singing Shiny Happy People any time soon, I do feel a lot better after my weekly massage, even though my portfolio's -0.69% today.

It seems low beta is where the money's been headed today. Basically a lot of low beta stocks on my MarketCaster have seen price increases ranging from 0.04% up to 2.96%, most of them outperforming the minor market decline. I hope there'll still be some low beta + high dividend stocks for me to add to in the New Year. If market conditions change then, I'll have to go with a different strategy at that point. But what?

CPB has been moving quite a lot lately, so hopefully I'll be able to recover my losses on it and close out the position this year in favour of PDO.

On the prince turned frog front, ABK was -4.44% and one of its bond issues (CUSIP 023139AF5) is trading at $0.07 on the dollar on my E*Trade bond trading platform. This is definitely a bond issue I won't be adding to even if ABK does ROTB. I have a feeling something is going on with ABK. It has survived the global financial crisis almost unscathed even though everyone has been saying it's only a matter of time. The fact that it hasn't succumbed to the pressure says a lot about its resiliency. Most of all, it indicates that the market needs ABK as a counterparty. Or at least it needed it up until this point. Was ABK's going-concern statement a secret ultimatum? But what could really be going on with ABK?

OK, Shiny Happy Forex Traders... Happy Thanksgiving in advance.

May no one be hit with any retracements...

Monday, November 23, 2009

Comme Ca Et Comme Ca...

No one bothered to post any Madoff jokes?

Even if there were, my portfolio was +1.22% today and I found another few potentially interesting stocks I can look into when I'm finally done with all this stressful PDO stuff.

High dividend + low beta = less stress

Today, I haven't found any charts that millionaire dreams are made of, although I didn't look very hard, but I did realise that the next step in my learning process must be to identify when all the stop-running is done.

Since we don't celebrate Thanksgiving here in Belgium, I'm going to look for trades on Thursday and Friday. And maybe figure out what to do with ABK. During the summer, when I was fretting about it only being a matter of time before ABK files for bankruptcy, there was a small window of opportunity when I could have sold it for only a minor loss. Looking back, it would have been the right thing to do. However, since it moved up so dramatically, I thought I'd be able to recover my full investment before getting rid of my ABK shares once and for all. Nope. It turned out to be another lapse in judgment. I wouldn't mind now if ABK just decided to give everyone a Thanksgiving present and ROTB (ripped off the bandaid). That would even be like an early Christmas gift and a very early New Year's kiss from a prince turned frog. Either way, it's not good.

Four figures out the window... down the drain... water under the bridge...

Run out of metaphors...

Sunday, November 22, 2009

Things To Look Forward To...

Belgian Prime Minister On the Map: Belgium's Trading Ego Gets A Boost!

Jim Rogers' First Million

ForexDiva's First Million? Hopefully sooner than a million years...

Pray for Obama: This Is What Gives Semi-Republicans A Bad Name...

As a semi-Republican, I do not endorse this in any way. In fact, I'm quite appalled.

Who in their right mind would pray for someone else's demise?

They need to get themselves in a confessional booth!

Enough Is Enough: Insert Your Very Own Expletive Here...

Another ForexDiva Financial Tragedy... brought to you by ForexDiva's dysfunctional family.

Just when I thought life couldn't possibly get more bitter or soap opera style show-stopping dramatic, I received a dysfunctional request from my dysfunctional family. I'd say at this point that dysfunctional is an understatement. I am still incredibly frustrated, angry, and most of all, heartbroken that they could even consider asking. It's like they think that their financial future is more important than mine.

One of my family members asked me to call him. I am even embarrassed to say who. He never calls me on my birthday. Last time I received a salary increase and he found out that I wouldn't be contributing any additional money to his living expenses, he didn't even congratulate me on my salary increase. So, when he asked me to call, I knew it wasn't going to be good. He actually had the audacity to ask me to be a co-signer on a six figure mortgage. Note: co-signer, not co-owner. Of course, I had to flat out refuse. What did he think I was - born yesterday?

Any of the handful of fellow couch-jumpers who read my blog even once in a while know that I've been in PDO mode for the past few weeks especially. From October 2008 to October 2009, I've paid off 60% of my outstanding debt. I'm left now with a very manageable five figure debt balance that is costing me a three figure sum per day now through to the end of my PDO deadline. The storm is practically over. It is stressful to say the least, yet at the same time liberating.

I am thisclose - thisclose - to being financially free for the rest of my life. And now, he comes along and thinks it's a very small favour to ask. The worst part is he actually told me that he probably wouldn't be able to pay off the mortgage himself, which is none-too-subtly telling me that there'll be a high probability of me being in financial prison for the rest of my life if I co-sign the loan.

I am glad I found the strength to finally tell them enough is enough.

Does it make it hurt any less?

And if anyone dares to insinuate that I didn't do enough and that I care more about getting an Hermes handbag than my family's well-being, I swear I will send them a few expletives of their very own. I think a high five figure sum over the past 12 years has been more than enough. I would already be worth six figures if I had been any more selfish.

Sometimes, we've got to stand our ground even if it means standing alone.

Friday, November 20, 2009

More Thoughts On Ambac...

My portfolio was down -0.77% today, but since I was in a better mood, it didn't affect me that much. Yesterday, I was feeling bitter and +1.68% wasn't even good enough.

Anyway, more thoughts on our prince turned frog, ABK!

I've been researching possible reasons to declare a technical default, but so far have a lack of evidence.

If this was based on morals alone, I'd have tons of moral evidence against ABK, including a clearly two-faced approach to doing business:

Ambac Misses Interest Payment On $400 Million Bond Issue (circa 15 August 2009)... this was only a $12.3 million payment on the entire bond issue.

Ambac Financial Posts $2.2 billion Profit

Ambac Issues Going Concern Statement One Week Following $2.2 billion Profit

Ambac Misstates Financials To Meet Minimums

Ambac Financial Misses Regulatory Filing

Not having studied law is a bit of an impediment, but I am quite sure I will no longer invest in subordinated bonds after seeing this article about Bradford & Bingley, a company in the UK that deferred interest payments and got away with no technical default.

I'm not even sure if ABK was one of those financial institutions that received TARP money, but ABK keep mentioning that their financial regulators are prohibiting them from paying dividends to the holding company. So is it better to hold bonds in the holding company or the subsidiary? I'm still figuring this out.

Whilst I'm at it, I would go so far to say that the whole bailout was premeditated. Apparently, Congress is 'teeming with millionaires.' Fair weather friends, indeed!

Wednesday, November 18, 2009

When I Grow Up...

I want to be a Stop & Reverse Momentum Player. I'd probably be really into GBP/USD and GBP/JPY. Since I'm in one of my moods, I am not going to do a forex trade today. My GBP/USD trade of yesterday failed to restore my faith in my trading.

Right now, I suppose I'm content with an occasional day where my portfolio advances by +1.68%. Now, this is uncanny. Why does my portfolio always seem to be moving in percentages involving an 8? This is a lucky number according to most Chinese. But it's real. My portfolio does end up moving in those percentages, which is what makes it uncanny.

Anyway, it turned out AMD was the second runner-up turned frog turned prince today. It was +10.57% based on news that it is aiming to retire $1 billion in Senior Notes. Good on you, AMD! Perhaps ABK can take a hint... AMD has been reporting loss after loss, quarter after quarter and even a company like this can have the honour to repay its debt. ABK, on the other hand, reports a $2.2 billion profit one week and issues a going-concern statement the next. Maybe it should change its trading symbol to WTF, which would certainly be more apt. I wouldn't be surprised if AMD closes the year with a try for $10. Would I be able to stick with AMD for the long term considering I'm really into PDO at the moment?

I've been doing some more research and found an interesting strategy that hedge funds use to trade junk bonds.

I'm not sure how applicable this strategy is with ABK bonds, but I seem to recall ABK issuing the going-concern statement prior to indicating its failure to file statutory financial statements. So is that a preemptive strike, ABK? At the least have the decency to offer us a tender for these prince turned frog junk bonds of yours!

Tuesday, November 17, 2009

Due to Unfortunate Trading Circumstances...

I'll be blogging more today. Blogging has kept me from making some pretty bad trades this year. The precarious looking charts on gold and oil from yesterday obviously only looked precarious to me since neither one made a very large move. Gold made about a $14 move down at one point, but oil went up. Since I didn't find any currency pairs that lined up with my theory, I didn't make any trades yesterday.

Today, I'm looking for more correlation possibilities. I'm going to monitor gold and oil throughout the week for some more inspiration. Ode to Gold and Oil...

GBP/USD looks interesting at the moment, but only for technical reasons.

I haven't talked about Harry Winston for some time and it's been a bit of no news is good news. My HWD position is firmly profitable at the moment. Honestly, I'm waiting for HWD to become an acquisition target. Along with TIF and BULIF, HWD remains one of the few remaining publicly traded independent luxury jewellers. It's a surprise that Richemont, PPR, LVMH, or The Swatch Group haven't found it even slightly intriguing for all these years.

In my world, a TIF and HWD merger would be ideal. TIF has really good marketing and they would be able to do a lot with an icon like HWD.

I really hate myself for missing out on TIF. That's definitely going down as one of my worst trading moments this year. I chose NYX over TIF! C'est moi!

Monday, November 16, 2009

Is It Me Or Do Gold & Oil Look Precarious?

I've been looking for some good correlation plays, but everything seems out of sync today.

The only thing that looks convincing to me is that gold and oil seem likely to break to the downside - at least for a bit.

Oil looks a bit weaker. Gold might still heat up a bit before a meltdown occurs.

I'm not going to trade either one, but am going to look for currency pairs that line up with my theory. If there's no alignment, I'll look at the slowest pair on earth - USD/CHF.

May the Couch-Jumping Continue!

Ever since my BAC Air Piano Incident, I've been convinced that any corrections in the equities markets will be short-lived, especially for quality stocks.

This article about recruitment in the advertising industry reinforces my view. As I had mentioned earlier, marketing and advertising expenditures are the first to be streamlined (extreme euphemism) during recessions. According to AdAge, more than 11% of the workforce in the advertising industry was 'streamlined' since the Great Recession. The light at the end of the tunnel is finally emerging!

It might not be a jobless recovery afterall. If this continues, we'll all be jumping on couches for years to come!

I'm planning on rebalancing my portfolio as soon as the opportunity presents itself. Since I've been so high beta, I might have to start looking at good dividend opportunities for my Roth IRA. I was quite surprised to find some opportunities with almost 6% dividend yields.

Incredible, and yet pretty exciting...

My portfolio was only +0.81% today by the way, but I'm still in a couch-jumping mood!

What Is Going On with WaMu?

I've been staring at this all weekend and I still can't figure out whether it's good news or bad news for WaMu Bank bondholders? When are we getting anything back? And will they completely obliterate subordinate bondholders? That is so premeditated it isn't even funny.

The $1.9 billion seems to be from the sale to JPM.

Remember that legally, there's a difference between Washington Mutual Inc. and Washington Mutual Bank bonds, so be careful about what you buy.

New Week, New Attitude: The Bitter Trading Habits of ForexDiva

If anything, I should be getting an A for attitude. I've been trading forex for more than two years now and haven't given up just yet - always getting very close, but then realising if I just put in some extra effort, maybe it'll be different. Admittedly, I didn't know what I was doing for the first year and a half, but I started slowly understanding market movements about the time that Lehman happened.

When I look back on some recent posts, I realised that I had some pretty good ideas. This does not help with the bitterness factor. At the height of my bitter rampage, I actually purchased my second (third?) Katy Perry single on iTunes. Talk about a bitter woman? Now that woman's bitter. Her songs are, at least.

Anyway, behind my own bitterness, there has been progress. It's been slow, but I want to take a look at my bitter trading habits and hopefully, this time, really, really learn from them.


I've got a pretty good setup going on here. I love my beautiful charts! They show me when the stop-runners are likely to strike. And now, I can even surmise when large players are in the house. Seriously - and I know how old that one is!


I've got a contrarian, trading ego thing going on too. Fear is my biggest psychological impediment. It's almost like I believe trading is an uber alpha male thing (which it is) and I am but a little diva who used to think praying works in trading. It's scary to be trading against so many alpha males with huge brains (and probably egos). I've only got the ego so far, but if I can get past the fear and the trading ego, I'm sure it'll be one of those One Small Step for ForexDiva, One Giant Step for Divakind situations.

Money Management

Stop & Reverse... it's a double-edged sword. However, I truly feel it is useful in many cases. I just need to ascertain when.


All trade setups are not created equal! I think I'm having a bit of an issue discerning why and need to be all practice what you preach and review my post below on how to move trading probability in one's favour.


Trading the news has killed me twice this year. But everyone knows Fraidy Cats have many lives.


The market runs on a rhythm of its own. Impatience is my forte, but it's not a virtue. I might stop trading some of the slower pairs altogether unless the risk:reward is really too good to resist.

Anyway, it's a new week. I'm going to try to turn bitter into better.

Here's to my fellow couch-jumpers!

Friday, November 13, 2009

ForexDiva: Now Accepting Fraidy Cat Buttons

My USD/CHF short last night would have worked out if I hadn't:

a. been a top-notch fraidy cat
b. used Stop & Reverse without any level of forethought
c. required beauty sleep
d. all of the above

It didn't quite reach my target yet, but the profit probably would have been better than most of my other trades. I woke up yesterday and the first interesting thought that popped in my head was I have to stop being such a fraidy cat. Easier said, I say.

If I have the audacity to send ABK a collection notice for a very small sum, I must have the audacity to stop doubting my trade setups.

But I did learn from this trade and I'm saving my energy for another round next week. Market correlations are major and I need to invest more time learning about these!

Hopefully, next week will be much less bitter and far more optimistic. There's enough bitterness already, isn't there?

Thursday, November 12, 2009

I'm Surprised I Didn't Get Charged With Reckless Endangerment...

...of my trading account, that is. I think I'm more emotional than I realised and definitely more bitter than one of those poison pills.

Today was another one of my Stop & Reverse Days.

At least my BAC credit line incident had a bit of a happy ending. My credit line on one of the accounts has been restored.

In another bitter rage, I sent ABK a collection notice for the bond issue that I own. What? If they can exercise their First Amendment rights, I can exercise my bondholder rights under the Trust Indenture Act of 1939.

What was my Stop & Reverse all about?

I shorted USD/CHF based on a very terrible DJIA performance. All risk assets across the board seemed to be underperformers today, and so the light bulb went on and I thought safe haven again.

So is the safe haven to be USD or is it to be CHF? That was the question. I noticed the price action that I like seeing on charts, but kept doubting myself.

I'm now short again and targeting the 1.0113 area.

Oh, pretty please! Never mind. Praying rarely works in trading. In fact, I'd be better off trading more carefully. No one wants to end up being a trading slut!

I should definitely try being much more selective about positions from now on.

Wednesday, November 11, 2009

My Inferiority Complex Just Went Up

I don't know what it is. A day off from work often translates to financial despair for me. If it's not a trading loss, it's an expensive purchase.

Today, it was a heated exchange with Bank of America (BAC). After checking my credit report, I noticed they had recently closed one of my newer credit cards for 'inactivity.' It cost me three points on my credit score and after so diligently paying off my debt with others, I was thoroughly ticked off.

I had heard that
banks are squeezing consumers prior to new legislature, but I never thought that I, with my stellar, stellar, stellar (not a typo) credit score would be affected.

If there's one thing I do well, it's a credit score! A credit score that has earned me an aggregate credit card credit limit capable of buying a house. A credit score that has shaped my identity and trading ego for the past... decade.

Anyway, they not only closed out that credit card, but also reduced my credit limit on a credit card that dates back to good old Party Like It's 1999. At that point, I was all four letter words.

Who does that??

This won't kill me because honestly, I don't even need that credit line. I don't need their entire credit line, but what'd I do to them? I've paid all my bills on time, my salary has increased since my last conversation with them, and my debt level has never been lower. Just because I haven't been an active shopaholic with them does not mean I am not a shopaholic at all.

The worst bit is that we as consumers have to beg them for a slight credit line increase and all they have to do is tell us that the credit conditions have changed and that is sufficient for them to give us the credit card equivalent of a slap on the face. And we have to turn the other cheek?

And they even had the audacity to ask:

1. What did your credit card purchases comprise of for your balance with Citi?
2. What is the value of your stock portfolio?

Is it me, or was that totally out of line?

I had just enough sense not to mention my Tiffany addiction.

Tuesday, November 10, 2009

Triple Whammy?

My portfolio got hit with a triple whammy today. First, it was -1.68% and even Harry Winston disappointed. Then, my BAC-to-$16-nightmare became reality and then some. I know I'm still technically benefitting from this since I've still got two other lots of BAC, but it somehow still feels like I've lost money from my recent sale of BAC. (Yes, that's how big my trading ego is). To top it off, ABK took the courtesy to warn everyone that it may file for bankruptcy.

In my experience, it will usually take several months before anything concrete occurs, but my hope is that the bandaid ripping will occur much sooner. This could be a special case with all the financial regulators involved. Nonetheless, it's financial hypocrisy at its best. How can ABK announce a $2.2 billion profit one week and then cry wolf the next?

Looking back on previous companies that have filed for bankruptcy...

1. Metaldyne did a
tender offer before it finally succumbed to bandaid ripping.
2. Finlay tried buying time with a
debt exchange offer with its vendors several months prior to ROTB (ripping off the bandaid).

Is ABK rolling over and playing dead?

I had a feeling it was only a matter of time, but I'd like to know what's happening to that $2.2 billion profit? Bonus time!

The Rally Did Not Leave Me Behind...

My portfolio was up +2.87% today, but unsurprisingly, I have been focused on the fact that I sold BAC way too early. It was almost a moment deserving of an "Ode to Air Piano" type poem, but I like to look at the bright side every once in a while too.

I'm more surprised about why the +10% unemployment rate didn't spook the markets at all. My Dad tends to think that it's because everyone's been expecting +10% unemployment for a while, so it's already been priced in. People are probably taking it as good news that it isn't worse. He's experienced two market crashes - the DotCom Boom and the recent Global Financial Crisis, so hopefully he's right and I can continue buying small lots here and there. Apparently, he also believes it's OK to have a few losers in one's portfolio as long as the winners offset the losers.

But this article thinks that
the pivotal point may be 20 November, when options are due to expire.

My highlight of the day was adding to C. I wish I had enough cash to add to BAC too, but perhaps I'll add to BAC in the new year. Sooner or later, some more profit-taking will have to occur and that'll be my moment to (hopefully) shine. I'm only praying that my JBQ tiara isn't too big for my head. I've already got a trading ego the size of Belgium. A tiara that won't fit will really give me anger management issues.

Too bad my Buy 1 Get 1 Free on EUR/USD turned out to be a false alarm. Since it still needs some time to setup, I'll have to review it again tomorrow. Tonight, I hope I won't have any more BAC dreams. I wouldn't mind dreaming about Harry Winston though.

Monday, November 9, 2009

The Excitement Begins!

The new trading week is here and after a fairly disastrous trading week last week, I am looking forward to turning the page and writing some new, more hopeful notes in my trading journal.

I had a nightmare last night about BAC going to 16 and missing out on all the extra profits. But I'm looking for an opportunity to add more to BAC and C over the next few months.

Debt obliteration or profits? Debt obliteration or profits? Difficult to decide, but I've been focused on profits the past few years and this mindset has slowed my debt obliteration tremendously. The market will still be here after my debt obliteration. So, I'm going to have to stick to Le Grand Plan and continue the slow and arduous process.

I'm excited about a few forex charts, including a Buy 1 Get 1 Free pattern I see on EUR/USD as well as a very precarious looking USD/CHF.

Let the volatility begin!

Thursday, November 5, 2009

Another Trading Tragedy Killing Me Softly...

Doubt and pride: a lethal combination in and of itself, which in conjunction with a trading ego the size of Belgium, could lead to an extra dose of trading tragedy.

I didn't want to relive yesterday's trading sob story, hereforth known as Stop & Reverse Day, but I forced myself to take a closer look. Yes, my trading journal practically reads like a Greek tragedy and it just falls short of accusing people of having an Oedipus Complex.

A positive change in trading philosophy is required here. Whenever anything is going wrong, it's so often the philosophy that's wrong. So, if I correct that, half the problem is already solved.

I can do better. I know I can. And if I play this right rather than getting played, this could be the biggest comeback in the history of forex trading reality blogging.

So here's what went wrong:

1. First Trade... Shorted GBP/USD @ 1.65117 at my lunchtime yesterday, which would be about 1 pm Central European Time. My notes at the time: +5 pips in a few minutes, but of course, no one is going to take 5 pips! So, it reversed and I was down about 7 pips… Stopped & Reversed @ 1.65187 and it was against me for about 5 pips, but I thought there was clear support at 1.6512, so I better not have a trading ego and close out the trade. But this could have been very risky. I could have been chopped up – right on the chopping block of the Hell’s Kitchen Trading Floor. Since I had to get back to work, I closed out the trade to net out the loss on my previous short. I was feeling proud of myself at that point.

2. Second Trade... After getting home and seeing that BAC played me like air piano, I was so ticked off and definitely unhappy about the fact that GBP/USD had also skyrocketed. After FOMC and after the equities market closed, I was looking for an opportunity to fade a move. GBP/USD looked interesting, not least because I had retribution in mind. Oh, yes I did.

Shorted @ 1.65539
Target = 1.6453
Up by 5 pips and down about 11 pips in a few minutes, so I did the Stop & Reverse. At negative 8 pips, I did the World Famous Stop & Reverse again. Finally, after being in the trade for at least an hour, wishing for cinnamon muffins, banana bread, and seriously praying for that trendline support to break, I thought this is so not worth missing out on much-required beauty sleep and stopped myself out at another negative 2 pips. So, in essence, I was short, long, then short again within a span of an hour. And no, I did not have any spasms.

Here's the thing... back in May, I had another bout of the Stop & Reverse. However, I actually learned a tonne from this recent Stop & Reverse experience. I was emotional, but at the same time, I was paying attention to technical levels and looking for clear signals based on price action. I suppose it was the combination of pride and doubt that got to me. That, and the need for beauty sleep.

Here's the chart... I was looking for a break of the trendline support that occurred from pre-FOMC right through to post-FOMC. Plus, there was the Little Black Dress bearish divergence signal.
My biggest observation from this experience is there's a time to Stop & Reverse and a time to just use a fixed stop. Stop & Reverse doesn't seem to work very well when the market's closed.

Why Do I Do This to Myself?

Note to self: no more news trading... especially not trades that involve the Stop & Reverse...

Why do I do this to myself?

Maybe that guy who read me like a book was right. Maybe I do secretly like difficulties. Who else could spend hours upon hours just making +3%? If I continue to miss any beauty sleep, I'm going to look 50 by the time I turn 31.

If I'm not feeling any less bitter tomorrow, I'm going to have to force myself to take a few days off. And my favourite day of the week is Friday, my lunchtime date with the Guys of London and the Men of New York.

I'm focusing on three setups from now on:

1. Little Black Dress (bearish divergence)
2. Little Red Dress (bullish divergence)
3. Buy 1 Get 1 Free (second pattern break following a failed pattern break)

Wednesday, November 4, 2009

I Hate Risk Aversion!

In particular, my risk aversion. BAC played me like air piano, but ABK surprised me with +35.14%. And their profits mainly stemmed from credit derivatives - interestingly. Oh, I do reckon things look to improve further in a fortnight.

Enter technically, exit emotionally? Common denominator of all my trades...

Happy Anniversary, Obama, my fellow all-talk-no-action semi-whatever... We've both got that je ne sais blah...

Right now, I'm looking for some low beta plays. There must be an easier way to gain more than 3%. I'd like to reiterate how anyone can do +3% - especially this year. If I sound bitter, that's because I am! LOL.

I'll now look for opportunities to fade some moves. I think I see something on GBP/USD...

Tuesday, November 3, 2009

Trading Ego Aside... Because Tomorrow's A New Day!

What's going on with my trading ego? My portfolio's +1.29% today and I'm still not happy. I'm going to be the perpetual diva - impossible to please. I had to let go of a partial position in BAC yesterday, only to watch it gather strength today.

This whole drama, i.e. my portfolio declining very dramatically in a very short timespan in an eerily similar fashion as last October, made me put my trading ego aside for a brief moment to re-evaluate what exactly is going on.

1. 34.5% of my portfolio is now tied up in junk bond holdings. Not very much room for growth then. This equity is stuck for at least another year. It doesn't help that I've built up my JBQ holdings to such an extent that the Income Estimator on my E*Trade trading platform now expects me to post a 5 figure gain in interest income over the next year. Wow, if that were really true! Instead, all these bonds are trading flat and I'll have to patiently wait for years. If I'm looking for growth, I'd need to add more to my portfolio to counter-balance the lack of mobility of these junk bond holdings. So, I have to accept this as a matter of fact.
2. Secondly, my portfolio is heavily weighted in high beta stocks. BAC, HWD, C, AMD, NYX, are all pretty high beta. I was going through days when my portfolio was moving up much faster than the market. How could I have expected this to continue? The move down would be just as fast, if not faster. With my recent sale of KO, my portfolio is even more heavily weighted in high beta.

However, due to my recent sale of KO and partial sale of BAC, about half of what I'd invested from the escalation of the global financial crisis is now out of the market.

My hopes are now pinned on:

1. PDO. I just don't want to be tied down financially any more.
2. HWD & NYX.
3. Continuing to look for good forex trading opportunities. I can't give up now. I just feel like I'm getting very close to success too. I know I've been saying that all year, but how much worse can one's trading get? There's only room for improvement now.
4. Possibly adding to BAC again. However, PDO is my top priority now.

Tomorrow is a new day - and an exciting one, no doubt! And Q4 is not over yet!!

Monday, November 2, 2009


My trading day was filled with regrets. Regrets are never good. So, I sold part of my BAC position today for a minor 12% profit on this part of the position.

I was really regretting not selling earlier. Earlier in October. Earlier in the day. Any time earlier would have been better. But as I mentioned earlier, I am trying to prevent any further damage to my portfolio. I still have another two partial lots on BAC and once I successfully complete my PDO (premeditated debt obliteration) process, I'll be in a better position to look for other trades.

But admittedly, I am a fraidy cat. BAC had broken out of a rectangle consolidation and the 200 Day Moving Average was right above my original entry price on that lot. According to my stop-running knowledge, there's a good chance that BAC might hit $12 again. I wasn't in a frame of mind to risk that, but I probably should have been faster and smarter too.

Anyway, getting back to regret. I was looking at this trade from the following point of view.

I have two choices:

1. Sell BAC now and get some peace of mind
2. Wait until it retraces and puts me at a loss. Should I put my trading ego aside again? What if it takes out the $12.80 level? Then, it’s too late to cry.

I'll continue to nurse HWD and I'll wait for C to go further south.

Harry Winston, further north please!

I'm worried. I hope I’ll be able to make some other more profitable trades very soon because otherwise, I’ll only close out the year with a +3% gain. It beats inflation, but anyone can do +3%! Especially in a year where you could basically buy anything and make money.

My biggest regret of all: being too greedy.

Oooh, Maybe I Have Nothing To Worry About?

Ford just posted a $1 billion profit and stock futures are up.

Still, my partial position in BAC is in a very precarious position.

Good thing I've got a day off from work today, so I can be around to nurse my positions in case anything majorly bandaid worthy happens.

After all, CIT's bankruptcy potentially has a $64.9 billion impact on the market.

It’s Not What You Traded, It’s the Way You Traded It!

My feelings are really, really hurt. Friday’s session was no picnic for me and I experienced a classic dose of the It’s Not What You Traded, It’s the Way You Traded It. My portfolio was down -4.84%. After adding to my Finlay bond holdings, I was down 6.3%. It was déjà vu all over again. Last October? Not a time I want to relive. Talk about Halloween…

My portfolio now would put all divakind to shame. I allowed BAC, NYX, and HWD to fall back into negative territory. These were my full-time super heroes! The strange thing about this sell-off is that I see no movement into some of the safe haven type stocks, such as utilities. It was a true broad-based sell-off. No one was spared. A sense of foreboding?

I spent a good part of the weekend worrying about what to do. Rather than condemning myself excessively, though, this time, I was quick to switch gears. I’ve been through a sell-off before. I can survive another storm.

I had already started reducing my market exposure a few weeks ago by selling my KO position. I wanted to use the proceeds towards my premeditated debt obliteration objective and have successfully accomplished this.

What do I want to do with the rest of my portfolio now?

I’m going to prioritise my positions and figure out which positions I want to nurse and which positions I want to get rid of if absolutely necessary. Capital preservation is my main aim now.

BAC and HWD are still partially profitable. If I sell part of my positions now, I stand a good chance of taking a partial profit and still being able to buy back at a lower price later on.

However, the question is, just how much of a panic will investors be in? CIT has just recently filed for Chapter 11. Would there be other potentially worse news to come? Do I care? I’m not going to let last October happen again!

On the forex trading front, I got into a long GBP/USD position during my Lunchtime Fun with the Guys of London session. I was up about 11 pips on the position, but the position started quickly retracing. When it was down about 8 pips, I stopped and reversed. It would have been a good directional move, but since I had to get back to work, I had to close out the position entirely for a net 2 pip gain. The whole point of my Stop & Reverse was to reverse my loss. However, I think I might be onto something from a money management standpoint. I’d have to keep experimenting with this strategy to gauge if there’s some real long term benefit to doing the Stop & Reverse.

It did make me realise that the velocity of a move has a lot to do with probability. Something to explore!