Don’t Marry To Any Stock

Today the crude fell almost $4 to $106.34.  The energy stocks tumbled, but so did the market in general except transport.  The dow was down 117, nearly 1%.  S&P and Nasdaq tested their 50 ema but no strong bounce.  It looked like the sentiment spread of 41 is playing out.   While I wanted the market to come down so I could catch up to what I have grossly missed, somehow I lost that focus somewhere in the process and my portfolio exposure to the long has become too large to welcome a big correction at this time.  It’s a bad feeling of: the market goes up, you lose; now the market is going down, and you have more to lose.  Bad and bad.  I guess I can blame in part on the SI indicator which says the market peak won’t be for another 2 weeks

It is getting disastrous – as far as my trading account goes.  It’s very close to the low end of the the spectrum of the historic account value (think of it as a standard deviation) and I’m feeling vulnerable.  I’ve lost faith in my own trading — at least until my trading account is back to at least the norm.   The main cultprit is this one stock, AONE, which I have a rather large position due to averaging down, (1600 shares with cost basis of $8.15/share).  It’s now down 34%.  That’s not counting the out of money calls I have in another account.

One of the rules of the thumb is not to marry to any stock.  Marry the wrong one and your accounts gets wiped out.

In the mean time I’ve been acting on trading alerts from other people through informedtrader.com and stocktwits.com.  As I am in a state of panic, I ended up with quite a few reckless trades, and holding way too many positions.

ALL of my holdings are in big red.  Even AAPL is down 4.33% — when can anyone lose money holding AAPL?  The answer is as soon as I become a shareholder.  Ha!

The informedtrader.com has had a good track record and has been advising minimizing positions in the past few weeks while maintain “some” exposure.  Being in a state of panic, when a recent buy alert was issued for ETN, in addition to buying the regular 100 shares, I bought 5 calls.  Right now ETN is down 5% and the calls are down 55%!!!  Jinx, or whatever you want to call it.

At the stocktwits.com I tried to follow mb_willoughby. She’s a recent college graduate with no trading background and has been trading for over a year at bullsonwallstreet.com, trading with some gurus via their trade room forum.  She’s a momo player, specializing on small and microcaps with low price and high beta.  I’ve been amazed how day in and day out she’s been calling out trades which ended up big winners.  This is her trades today:

http://maribethwilloughby.tumblr.com/post/4559740870


1. INVE- bought 3.5 breakout sold 3.8 and 4.10 for 8.6 and 17% (daytrade)
2. BIOD- bought 2.35 break sold 1/2 2.43 for 3.4% (daytrade, on top of existing position)
3. IDIX- bought 3.4 sold 3.59 and 3.63 for 5.6% and 6.8% (daytrade)
4. LNG- shorted this one a few days ago at 8.6 covered 7.62 for 12.8% (swingtrade)
5. CYTK- bought 1.6 break sold 1/2 1.68 for 5% (scalp)
6. SHZ- in 6.04 sold 6.14 for 1.6% (daytrade)
7. COOL- bought 3.17 for a bounce of $gluu running and sold 3.27 for 3.2% (daytrade)
8. UCBI- sold this swing trade 2.52 from 2.43 for 3.7% gain (swingtrade)
9. TQNT- shorted breakdown at 11.6 and covered 11.2 for 3.6% (daytrade)
10. OTIV- scalped 2.52 sold 2.46 lost 2.4%
11. RXII- bought 1.3 sold flat
12. WH- bought 1.48 sold flat into the close

With trading account of $50K, she trades around $8K on each trade with a goal of at least $500 profit each day, and tries to stretch it as far as she can once reached.  She said she’s had $5K days.  Don’t I wish I had her resources and performance!!

I tried to chase a momo today myself with ROYL, her trade from yesterday, and check out where my entry point was?  Why is it the moment I decided to chase becomes the top, a trader’s worst nightmare?

On the other hand, this stock is where mb_willoughby got her 17% return.  With the stock already being up over 32% on her entry (circa 3.50), I simply have no gut to follow suit.  The stock finished the day up 110.53% !!!

Portfolio Value: $135,800.

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