Please make your own conclusion from the excerpt below. JPM is “selling protection”… Isn’t that what AIG did with mortgage- selling protection???
If the market tanked due to European nightmare, what do you think will happen to the corporate credit?
I added more SKF today. It “may” just be a runner if our economy doesn’t show any improvement going forward. Of course, stops are in place for my own protection.
Good Hunting!
Below is an excerpt from the article: Understanding J.P. Morgan’s Loss, And Why More Might Be Coming
“The passage below comes from the WSJ article:
In recent weeks, hedge funds and other investors have been puzzled by unusual movements in some credit markets, and have been buzzing about the identity of a deep-pocketed trader dubbed “the London whale.” That trader, according to people familiar with the matter, is a low-profile, French-born J.P. Morgan Chase & Co. employee named Bruno Michel Iksil. Mr. Iksil has taken large positions for the bank in insurance-like products called credit-default swaps. Lately, partly in reaction to market movements possibly resulting from Mr. Iksil’s trades, some hedge funds and others have made heavy opposing bets, according to people close to the matter… However, Mr. Iksil has turned more upbeat recently. He has been selling protection on an index of 125 companies in the form of credit-default swaps. That essentially means he is betting on the improving credit of those companies, which he does through the index—CDX IG 9—tracking these companies.“
If you enjoy the content at iBankCoin, please follow us on Twitter
Move stop to $45.17. This is the half-way point of yesterday high and low. In other words, if price action gives back half of yesterday move, the run “maybe” losong steam and I get out with some profit.
That was fast! Stopped out. Banked a few coin and moving on.
The run may still be on after all, I’m always a sucker for new high when it comes to looking for runner.
Bought back some to get back on the horse. Yes, I paid a bit more than I got out this morning; but that is all part of the game.
Move stop to yesterday low.
Back to my original position plus some…
As reluctantly as it is, SKF shows that it has leg to run.
Reduced position size by half and move stop to a bit below yesterday low.
Reason for using yesterday low as stop is because as a runner to the upside, it should have higher low and higher high. If it has lower low, it is no longer a runner.
New high again! from yesterday high. Needless to say, I added back what I sold this morning. Yes, again at a higher price than I sold for.
But these small difference will be insignificant if SKF decided to make a mad dash to the upside because of elevated European woes… or another surprise losses from a “too-big-to-fail” financial insitution…
Of course, stops are in place for protection.
Good Hunting!
Added a bit more today since SKF took out the intra-day high. I believe SKF is still in the beginning phase of the run giving current financial climax.
Again, I can be very wrong. So stop losses are always in place.
Move stop to a bit below $46.20 which is the half-way point for yesterday bar. If SKF’s price retraced more than half of yesterday “long” bar, the run may be out of breath.
Let’s see if we have another higher high and lower low today.
Moved stop up to 47.23 which was a bit below today low. With such momentum going up, it would be a bad sign if it takes out today low.
Without doubt now, SKF is a runner.
SKF is truly running now. I did not add more today ’cause it now represented north of 10% of my portfolio.
Will it go parabolic tomorrow? Or will it correct instead? Either way, I’m in high alert to take profit when I see fit.
Moved stop to 48.23. This is not only a bit below half-way point of yesterday bar; but also the support from March 6th, 2012 high of 48.26. In other words, if the support is breached, the run may be over.
I’ll also be watching closely. If price action star a path of downward movement with no pause, I’ll exit to lock in profit before my stop is hit.
Good Hunting!
Took profit on half-position. The other half still with stop at $48.23.
Wow, SKF shows amazing strength. I jumped back in with position half-the-size of what I sold earlier. Now, I’m at 75% of my original position from yesterday.
Again, I paid a bit more for what I sold earlier. And again, the price difference means nothing to me.
My ability to pay higher price than what I sold for (when long) is the reason why I’ve no qualm jumping in and out of my position in the name of protecting myself and RESPECTING the risk I’m facing.
Yes, whip-saw WILL happen but that is the standard “business expense” I don’t mind paying in the business of trading.
Good Hunting!
Btw, I put a close stop of my “addback position” in today intra-day pivot-low for protection. Meaning if the momentum does not continue; I don’t want to hang around.
Sold my addback position at breakeven. With SLV and GLD on a tear up; could it be an expectation of QE3??? If that is so, SKF will have a violent reaction.
Move stop up to $48.83 to protect the balance of my position.
$48.83 is a bit below today intra-day low.
Bought back some of what I sold earlier at a higher price. Now holding 65% of position size coming in from yesterday.
Same stop at #48.83.
Move stop for the addback to $49.37 which is intra-day pivot support. The balance of the position still have the same stop at $48.83 which is a few tick below today low.
Sold my entire SKF position at $50.16 to lock in profit before the weekend. It was a successful campaign since Monday. Very profitable.
If it takes off next Monday; so be it. But I already banked my coin to cash to protect my profit from any correction that may come.
If you are following me on my daily update; thank you for your attention.
That was a awesome trade zen!
have a great weekend killa’
Thank you, Noodle, you have a great weekend too.
Btw, although I’m still bullish on SKF and believe the run can continue; price action has gone up for 6 days without any correction bar; therefore, I don’t want to risk the gap correction after the weekend.
Next week, I’ll see what the price action does before deciding if I want to continue to long SKF. I notice that SKF continues to make intra-day high after I got out.
But that is the way the ball rolls. I’ve been dealing with this dilemma for a long long time for you can never get out at the top every single time.
Good Hunting!