I ended up buying a lot more Qs for a trade than I expected to yesterday during that afternoon sell down. I had bids all the way down to 39.25, and never expected to get as many fills as I did.
I am paring back my Q holdings into this strength, simply as a function of size management.

For now, I am sticking with a very small trading position . . .

>
Incidentally, these sorts of posts give our attorneys ulcers and coronaries. At some point in the future, they will become exclusive to the research site (if for no other reason than my lawyer friends’ health).

Category: Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

32 Responses to “QQQQs follow up”

  1. LMAO says:

    these are the posts that i find most intereting. i value your oppinion and appreciate your willingness to share trading ideas.

    we are all big boys and girls and know to do our own due dilligence and such. tell your lawyers to chill out.

  2. Bynocerus says:

    Speaking of the research site…???

  3. rob says:

    i hope the research site has a student rate.

  4. Bynocerus says:

    Wait a second. You got filled at 39.25? How did that happen?

  5. B says:

    This isn’t a pretty market so far today afer a big bump at the open. We have a buyer’s strike. Of course, there is a second option to price pinning. Delta hedging could exacerbate a further decline this week……………….But, we are in a condition where we should really see a rally this week even without options. Someone needs to step up and buy something.

    Barry, can you kick off a buy program or two?

  6. trader75 says:

    Strength?

    Not to be obtuse, but what strength? Are you talking 10 minute chart?

    ‘Cause from a daily chart perspective, the Q’s still look the guy lying at the bottom of the stairs with a busted ankle.

    And from a weekly chart perspective, the year long uptrend that began in May of ’05 has been clearly voided / violated / invalidated etc.

    Maybe traders need their own special strength and weakness vocabular, like Eskimos with snow….

  7. Byno

    Not filled — just bidding all the way down — stock never traded never got below 39.79

  8. Mark says:

    Byno-

    Barry gets the “Friend of Larry’s” discount on his fills. When he starts getting the “Friend of Ben’s” discount, that’s when I buy his fund. :)

  9. kvenlander says:

    Here’s a funny about loss aversion:

    “If I showed a string of capuchin monkey data to an economist, he couldn’t, with any statistical test, tell the difference between a capuchin monkey and your average American stock market investor.”

    http://www.seedmagazine.com/news/2006/05/monkeys_and_humans_are_equally.php

  10. ~ Nona says:

    Now we know why Shakespeare wrote: “The first thing we do, let’s kill all the laywers.”

  11. Bob A says:

    I have a monkey named Cramer

  12. B says:

    It’s our amygdala. Our basal fear processing that keeps us alive and makes us such awful investors.

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

    That is why good traders are either psychopaths and sociopaths. Don’t think I am kidding either. They don’t have the same emotional response normal people do. Why do you think Wall Street is always in legal trouble.

    http://sv.typepad.com/forsv/2005/09/psychopaths_cou.html

    High achievers in business often fit the same profile. Ever wonder how that CEO could cut 50,000 jobs and not give a hoot? Ever heard of Chainsaw Al?

    Drug addition, gambling problems, cheating on spouses, etc. All a profile of successful traders and business execs. I AM NOT SAYING everyone fits the profile or that it is even a majority.

    The moral of the story is that being a successful investor has less to do with being smart and more to do with mastering your emotions. Can you take the trade when it looks like hell is freezing over? You can make more money than anyone on Wall Street if you can only have a decent trading system that is correct 50% of the time and can take the trade and eat your losses quickly.

    People don’t understand this concept in general. The best traders on Wall Street are wrong more than right. I saw one of the top oil trading firm’s CEOs talk about how their trades are right 30% of the time. Yet they were swimming in profits. They have full time psychologists on staff as coaches. People think Wall Street is full of stock picking gods. That is ridiculous. They are idiots just like us. lol. That is why listening to the Motley Fool is a fools’ game. They aren’t clairvoyant. They should be teaching you psychology. Wall Street’s best can take the trade and admit their mistakes. If you suffer the emotional condition, you should not despair. You can condition your responses by exposing yourself to your anxiety often and learning to harness or, at least, control it. Just do it with a plan and do it with very small positions until you are more comfortable.

  13. Bynocerus says:

    I thought the lows were in that area, Barry, but I haven’t pulled up the charts today.

    Augmenting what B said, I’ve found that my best trades come when I’m absolutely scared to death to take action. It is when I am most elated or most despondent that taking the other side of the trade has been most profitable.

  14. Robert Sabuda says:

    Barry,

    Hurry up with the “research site” already! BTW, I appreciate you coming clean about your good and bad trades and having to back out of trades.

    Much better than some other guys I know who have fudged their results (Bob Brinker for example).

  15. Ricardo says:

    screw the lawyers!!! If it was for them we would have never made it out of the cave!!! (too much risk) In your left chest cavity you shd have an organ called a heart and it shd be beating. Ok, good! Now live a little bit!!!

  16. sam says:

    barry that’s a loser..QQQQ is going lower.

  17. angryinch says:

    The QQQQs should get a spring off the gapfill from Nov at around 39.30-39.40. How far it goes I don’t know. If that doesn’t work, it will likely fill the smaller Nov gap back around 38.40. I wouldn’t touch the QQQQs until 39.30-39.40. But we are close.

  18. ERIC says:

    Je vous dis bravo, bravo et encore bravo pour tout ce que vous écrivez.

    Eric

  19. I am out of the Qs; The shares purchased under $40 were a small winner, and the shares over 40.15 were a loser. All in all a few cents loss on the trade.

    I do not understand why people pretend to never have a loser; That’s a statisticially impossible scenario, so why pretend? Its goofy. In this game, if you hit .400 and manage your positions well, you are a moneymaker; bat .500-600 you are superstar.

    And I have long said I expect to be wrong, so its really no big deal. i have no ego tied up in a trade.

    On a related note, I moved all of my Power lunch Appearances from 2005 from TiVo to DVD this, and I checked out all the stock and market calls. Some really good, a few bad, a couple just awful.

    If I get a chance, I’ll have them entered into Excel and see how I did. The buy of MSTR at around $50 might make up for the short Google around $185!

  20. Mark says:

    Kinda lame-o rally here Boys.

    Barry, well done. Well said.

  21. Bynocerus says:

    Index Trades Only

    Lifetime batting average = .4877
    Biggest Draw Down = 37% (2000)
    Biggest Gain = 156% (1998)

    And yes, Mark, this rally does suck giant donkey pelotas.

  22. Chad K says:

    Post those results.

  23. Mark says:

    Bought the goldminer dip for a trade this morning and that is just kinda sucky too. Up 1.7% and I wonder if it’ll hold (was up 2.4%).

  24. B says:

    You know why people never say they have a losing trade. You just don’t want to indict anyone. I’m not that nice. lol. Well, I am when I take my meds.

    People wouldn’t subscribe to a service, theory, fund or advisor who said they might be right 50% of the time because the whole Wall Street crew does not give such full disclosure. And without full disclosure, someone is going to outmarket their competitors and get the client’s assets. And they’ll do so by misrepresenting their results. And getting the assets is the most important part of the game. Because the fees are what keeps people employed to pick tomorrow’s winner. No fees means no research or no crack team of traders or trading models or infrastructure needed to successfully invest. It also meant no Ferraris and multimillion dollar Manhattan penthouses.

    That is why Grantham lost half his assets in 2000. Because he was honest. A smaller firm could have collapsed by being honest. Many did. And it was why Clough lost his job at Merrill in 2000. And why Louise Yamada lost her job and why and why and why and why and why. Because they were rightly bearish at some point in their careers.

    Wall Street doesn’t want bears or honesty. That means they don’t get the customer’s assets. If they wanted honesty, they would have told everyone to liquidate stocks in 2000 and saved them trillions of dollars. But, they wanted the assets because regardless of whether equities went up or down, they made hundreds of billions in annual management fees. So, IF and only IF, hedge funds can outperform in bear markets and only keep up with the overall market during bull markets (and most are not really hedge funds IMO) they deserve higher fees. Because they are comp’d on performance not just fees regardless. That means performance in down markets too.

    I didn’t take my meds today.

  25. ~ Nona says:

    Glad you skipped your meds today, B!

  26. UndergradJonathan says:

    I agree that I find what Barry trades most interesting. I was involved in a trade with IBM back in march because of a certain break out I saw with it and after I executed my buy order, I saw Barry also noticed it too. Very reassuring..

  27. Bob A says:

    Reality matters, and there’s a lot of money to be made from distinguishing happy talk from reality.

    Maybe you need those meds B, but someone’s making money by selling them to you whose not likely to tell you if you don’t.

  28. Bynocerus says:

    Going back to pin action, the open interest on the Qs is exceptionally heavy at 41, and the puts are heavily in control, which makes me think come Friday…

  29. wcw says:

    Everyone has losers. Every option that expires worthless is a 100% loser, but that hasn’t stopped me doing okay with them from time to time.

    Over the 84 months through December, my monthly intercept vs six indexes (non-US emerging & developed, US large & small, non-US govts and vol) was 0.3%, but with only a not-significant-at-.05 t-stat of 1.3.

    I’m not a trader, so I don’t measure drawdown or Calmar.

  30. Jack says:

    I appreciate you sharing your trades. Even though you said you don’t have your ego tied up in this, I know an audience only adds pressure.

    You did not say “why” you dropped your QQQQ position. Markets no less oversold today as it was yesterday, is it?

  31. Larry Nusbaum, Scottsdale says:

    “At some point in the future, they will become exclusive to the research site (if for no other reason than my lawyer friends’ health).”

    HOPEFULLY HE WILL BE DEAD BY THEN AND YOU CAN CONTINUE TO POST TRADES, GUILT-FREE.

  32. Mark says:

    Larry-

    Out host knows quite a bit about the law himself. ;)