Nothing negates a failed auction quite like a slow and sideways trade right at the swing high.  The quiet manner by which the market lingers at swing high suggests two things.  First, the market is not sharply rejecting higher prices.  Instead we are building acceptance at these prices.  Second, the slow action suggests the market might be waiting for new information before moving elsewhere.

Under the hood of the market, the internals are showing an interesting rotation to start the week.  Most interesting is today’s weakness in retail which has become a widely discussed area expecting some positive rotation.  It is a simple trade to understand and started showing early signs of working last week.  However, one must keep an open mind that the whole idea could take some heat before ultimately playing out into Thanksgiving.   Shares in EXPR, ANF, JCP, and AEO are showing signs of relative weakness and LULU reversed its early pop.  On the flip side we can see rotation into risk especially in security software, China names, and solar.

Overall the grind higher makes it tough to short, especially individual stocks who could squeeze at any moment.  And on the other side, taking longs requires proper risk profiles to your trades and overall book in case we see a leg down quickly materialize.

The top three trades I am stalking into the close are YELP, DANG, and SCOK. All long ideas, especially if bulls sustain trade above the zone from the daily mid (4163.75) to opening swing high (4161.25).

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On losing days, my old routine used to be calling up some buddies and having a few beers, chalking it up as another hard lesson from the market.  I can always have this mentality because the money, I don’t depend on it.  I’ve always been told consistent profitability in the markets requires a low stress money situation.  I agree.  I absolutely can’t imagine being in a financial pinch and trading.  As for the jumpers, they’re simply cowards who can’t swing the poor life, thrift shopping and such.

Today really wasn’t as bad as I’m making it out to be, but frustrations were quickly compounded and before I knew it I was going ‘Full Gibson’ beating people over the head with rocks and such.  I played back the tape of my futures trading just now and the mistakes didn’t start until I made it about me.

I made it about me.  Not the markets, because some crazy shit went down that rattled me.  Let me explain:

I took planned trades, trades with statistical advantages.  The first two win.  Good start.

The second trade takes off as soon as I get it in, looking great, gets to my exit, prints my target a few times, I don’t get filled and it slams down and takes me out break even.

At this point things are looking REALLY choppy and moving REALLY fast.  For the next 30 minutes all hell breaks loose, Raul taking funky ass unplanned trades.  Good God, it looks like I fired a machine gun at the screen.

Funny thing is, my last trade, a long…something was still firing in the old noggin…my exit looks like the most beautiful short entry you’ve ever seen.  The floor fell out seconds later for five handles, then many many more.

This all happens very fast you see.  I lost sight of the market.  I started having a very real and very strong feeling that the algorithms knew exactly where my stops and targets were, and they were fucking me. That’s paranoia…fear based nonetheless. Me, me, me, that’s what my internal dialogue sounded like.

Recognizing this, I cut almost all my risk out and pressed my cash to 65 percent.

Some names I just couldn’t let go of.  Here they are, presented by size (biggest-to-smallest):

AAPL, CREE, IMMR, RGLD, HMIN, DANG, and FB

I also hold some cheap lotto tickets in HPQ weekly calls and NFLX.

My fate as a trader lies entirely on backing off when conditions don’t favor my style of trading.  It’s something everyone has wrestled with I’m sure.  It’s never hit me this hard in my life, even though I’ve taken much larger financial blows.  I was furious.

It’s a learning experience as always, but this one left a lasting impression.

BOTTOM LINE: ALWAYS LIVE TO FIGHT ANOTHER DAY

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I only entered into the S&P futures once today, buying a pullback and attempting to inflict pain on the short sellers.  The trade earned two handles on two contracts but once the sellers defended their territory, the land north of 1645, I backed off the action and simply observed.

I had a trigger right at the open to go long, but I was distracted buying weekly calls in NFLX and LULU.  They’re both about flat currently, and I have the distinct feeling I may take some heat before these trades can play out.

I closed out that aching ACHN position, it could still pull off a Hail Mary bounce recovery, but I really don’t feel like sticking around to find out in this overall choppy tape.

I took a 1/3 scale in DANG up here near recent swing highs.

Now I’m essentially sitting on my hands, waiting for the market to play out.

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Do you like the transient manner in which I avoided today’s AWK dump off?  After over two years of being invested in the name, benefitting both from the large coupon AND the capital appreciation, I simply cut it loose.  This type of thing happens all the time over here.

Is it luck?

I’ve always considered myself lucky.  I walked away from a pretty gnarly Cessna crash a few years back.

But it’s not luck.  It is marrying the knowledge that matters and hanging out with it every night.  It’s foraging through The PPT, aimlessly, for hours on end.  Reading everyone’s commentary here sure helps.  Pay attention.

Moving on to this landslide close, there’s your sell in MAY!  That was 30 handles from the high of the day.  I got stopped out of my NANO trade amidst the selloff, but my impunity in ES_F continued.  I just had to try the mean revision, and actually made a point and a half going LONG mid death spiral.

I’m telling you, I should buy some lottery tickets for real today, I have the Midas touch.

After seeing the selling pick up tenacity I covered and bought some TZA.  Who am I not to join gentleman RaginCajun on TZA?  On this birthday!?!  I had to.  Plus it’s like my Ambien for the weekend.  Quickly: Raul trusts no pharmaceuticals, hence his distrust for resident drug dealer @halfbloodpope. I’m really not sure why I’m talking in the third person, via my pen name.

Some of my stocks held up well considering the carnage.  New long ACHN didn’t chit the bed, which is sometimes expected of newborns.  DDD was ugly, but damn, I’ve seen worse.  I’ll probably see worse come Monday.

I have the China PMI to look forward to this weekend with HMIN and DANG.  And I have SNE.  I even have a dash of NBG.  I like taking my chips to another country and gambling elsewhere while the USA gets sold in May.

My cash rose to 30 percent.

It seems like June is going to whip about something awesome.  I hope so.  Enjoy your weekend, eat a good meal, make love to your wife, for we battle come Monday.

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Are you man enough to take it?

There’s a cloud of electricity around Sir Raul this morning as I trade with near impunity.  It may just be these storms rolling through the D, turning the entire landscape to a shade of green that can only best be described as ELECTRIC.

Big, big day thus far.  Let’s run down the moves:

10 trades in the ES, 10 winners.  Flawless victory.

Sold 1/3 NBG at the open + 20 percent.  My ancestors are treating me right.  I’m a decedent of ZEUS.

Sold my NFLX lotto ticket at AM swing high, made a G.

Bought more SNDK lotto tickets, let it ride.

I closed out my RVLT.  I never love this name and wanted my 5 percent gain.  It could still go.

I bought ACHN from fly’s homeless post last night.

I bought SNE.

Let me elaborate on SNE.  It has a bearish-slanted head and shoulders pattern.  Very bearish.  The NIEKKEI had a tough week.  I think they’re going to drop the hammer on shorts.  How dare they question their economic experiment!  Japan doesn’t play pimp.  This is my rebound play to get involved with the action.

I like my China names going into a weekend of Chinese PMI data.  They’ll look to get global attention this week, I feel.  I’m long DANG and HMIN.

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Yes, there was a selloff this afternoon.  Indeed, the NIKKEI is doing scary things.  Sure, there’s lots of uncertainty in the bond markets.  And certainly, we’re knee deep in month end foolishness.  But why not have fun with it?

I know everyone’s different in their approach and I respect that.  The buy and hold investor who got involved any time in the last 5 years is probably crushing, if he picked good companies.  The swinger who is patiently waiting for cleaner conditions is probably preserving a nice chunk of earned capital, waiting for her next opportunity.

I’m trying a little bit of everyone’s soup.

So far, my first two attempts at this option game have appeared well timed, SNDK and NFLX.  I’ve taken scales in both.  Aside from the paper gains I’m sitting on, which are very real money, I have a free ride on my lottery tickets, silly contracts set to expire tommorow.  There’s something to be said about this approach.  If either one of these continue higher tomorrow, we’re talking about 30-40 percent gains.  I never considered such speculation until “The Fly” brought OptionAddict into the mix.

I traded the spooz so poorly this morning, I can’t wait to review the trades while slamming my thumb in a door jam.  I need my pointer finger for clicking.

I HAVE MY CHINA FIX: Long shares of HMIN and DANG

Let me talk about DANG a bit.  My good friend @stockcats suggested the name via fortune cookie.  One thing stood out to me, the near geometric perfection of the triangle up here.  The Chinese, they love structure, symmetry.  Their leaders will point to this chart whilst we sleep and demand it resolve higher, as a show of power and formation.

I nibbled on the little bank that could, NBG.  I can’t pass up a good joke, even if it’s on me.

See my Dee’s?  DDD looks fantastic up here.  So do AAPL SNDK CREE and NFLX.  FB doesn’t look too shabby down there, either.

I’m feeling lucky, so I’m pressing my bets all over the place.  I can assure you some of them are wrong.  Until we decidedly trade lower, I’ll keep dwelling in the speculative components of the market.  But hell I’m young, I can afford to lose it ALL.  Fuck it.

Should I fall square on my face tomorrow, this post will serve as a jagged reminder of my insolence to the cautionary winds.

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