With great powers…

I know what you’re thinking.  There goes the neighborhood! This was my reaction too!  I was minding my own bidness yesterday when all of a sudden I received an email announcing that I was chosen as the KOPG for March.  I thought it was a joke.  The Fly’s enforcer said the Fly don’t joke!  This was how our conversation went.

Fly Enforcer (FE): Do you want it or not punk?

L/DL/S: Do I get any compensation?

FE: Are you on drugs?

L/DL/S: Is this the call to the Big Show where my name will be under the Blogs tab?

FE: Now I know you’re on drugs!

L/DL/S: Then what do I get in return?

FE: Nothing!

L/DL/S: Was this win by default?

FE: What do you think?

L/DL/S: So let me get this straight.  There’s no pay, there will be no autograph from The Fly,  and I received it by default. I’ll take it! Indeud!!!

All kidding aside, I’d like to thank all of you who voted for me in February.  Without those votes, I wouldn’t have gotten a chance to join an illustrious group.  Following Yogi will be a tall order indeud!

Moober actually beat me out, but he didn’t have enough plate appearances to qualify.  My 4.10 score was the highest since Mr. Cain Thaler’s 4.16 in April ’10.  Hammy holds the all-time record of 4.80 in March ’09. I think that record will stand for a long, long time.

There have been many talented people who’ve won this award including two, Mr. Cain Thaler & chessNwine both whom eventually promoted to the Big Show.  Mr. Cain Thaler dominated KOPG.  I’m surprised The Fly hasn’t named the award after him.

Amazingly, there have been only three KOPG multiple winners!

Sorry, I’ll stop with the useless statistics.  Woodshedder took away my debut thunder by already talking about March’s statistics. We think alike!  As you can see, the last two March’s have been exceptional. Will this 3rd time be a charm too?  Today was also the 1st trading day of the month since November 2010 where the SP500 closed below the open.  And we know what happened last November.

I will try to live up to the great history of KOPG.  I’m hoping I’ll turn out like #16 instead of #2 on this list.

Finally, The Fly’s enforcer gave me some advice.

Say indued Gracie! Indeud!!!

P.S. The plaque should say Lies, Damned Lies & Statistics…lol.

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I just wanted to take a moment to thank everyone for the opportunity to be February’s “King of the Peanut Gallery”. I really enjoyed writing, and I hope you enjoyed some of the posts.

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While reviewing my charts today, I noticed this divergence in the Dollar index. Even if the Dollar does rally strongly, I have no idea what effect it will have on stocks. I can guess commodities priced in Dollars might see some downward pressure, but trying to sort out the various cross currents at this point is almost pointless. The Saudi Arabian stock market closed down 5.0% today (Sunday 2/27), but that weakness was not seen across all middle eastern markets that were open.

If the US market continues higher, while shrugging off a stronger Dollar and Middle Eastern political instability, I would read that as very bullish signal. I’ll be watching the overnight action closely, and playing this upcoming week very cautiously.

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I’m trying to keep a cool head during this sell off. Yesterday I made a small change in my long term portfolio. I jettisoned my remaining one-third position in STX. There was no compelling reason to hold, and there was still a decent profit in the position.

I have no idea when this correction will end, but I’ll be watching The PPT hybrid for the all clear signal to take off the hedges and get net long again. I still sense a ton of complacency. I know the VIX is up huge, but this isn’t my first bull or bear market, and I’d like to see some people “stain their shorts” before I start to think this correction is reaching the end.

For those of you that are new to this game, this is not the time to be screwing around. If you plan to take advantage of the next up move, you need to survive the bad spells. Preserve your capital. More importantly though, you need to preserve your trading psyche. Don’t get beat up with a bunch of losses, trying to pick a bottom or going short into the bottom. Watch, listen, and get the feel of what the market is trying to tell you. Most importantly — be safe.

I missed the move up in February by being hedged. I took no new positions. I left some on the table. I’m now waiting out this correction, ready for the next setup.

Current market position: longs are hedged, slightly net short.

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In case you haven’t figured it out by now, the major focus of my trading is on risk management and the psychology of trading. Yes, I use technicals to find low risk entries and to manage my risk. Yes, I use fundamentals to provide a “margin of safety” in my longer term purchases. For the most part however, I can only control myself. The future is unwritten, as Mr. Strummer once observed, there’s no use trying to game it. So what tools do we have to manage our trading endeavours? How about our words.

If you listen closely to traders and the words they choose to describe their operations, you can tell almost immediately how well they manage their emotions in their trading activities. If you want a great example of emotionless trading, check out ChessnWine. His trades are executed without emotion, and win or lose the tone seldom changes.

Cursing your loses or jumping up and down with exuberance at large gains sets the trader up for mistakes later on. Of the two, I believe cursing loses is the greater evil, since we all have a natural aversion to pain and loses can be painful without the proper mindset. Losses are just as much a part of trading as winning. Spend some effort controlling your language. Pay attention to what your words are saying about your relationship to your positions. It’s an easy and cost effective way to improve your performance.

Current market position: longs are hedged, slightly net short.

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Not much going on around here lately. Just a vacation week and a lot of cold (and now windy) weather. No changes in positions. I’m not about to chase. I’m nowhere near nimble enough to pick off individual names at this stage of the game. I’d rather let my risk management guide my course.

Market position: longs are hedged, slightly net short.

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