Market Review June 17, 2013

Well as it turns out, even though today was a bullish day, we are still stuck in that darn triangle.  We were close to breaking out, as we snuck above the triangle briefly, but we ended up closing below the line.  Notice that volume is still on the decline.  Note that I did not move any lines.  This triangle so far is being correctly predicted.  I also expect that when we do breakout, it is on relatively strong volume.  Here is a quick chart from today:

SPY_JUNE_17_2013

 

Review of Yesterdays Picks:

To make a long story short, nothing triggered from my predictions yesterday.  This is a good thing because we want confirmation of a trend and not get stuck in whipsaw action.  That leads me to my next section.

Real Life Trades:

FCX:  I am still in this stubborn stock.  My target is still 29.00 and my stop is still 30.35.  I thought once we closed below 30 we would continue to trade down, but unfortunately, we have just sort of meandered sideways.  If this thing hasn’t made a decision by the end of next week, I will make the “executive” decision to close out of my position.

VZ:  Yes, I know, just above I said that none of my picks triggered today.  That is 100% true, and yet I am in VZ and taking a HUGE beating.  Why?  Was it emotion?  Was it a knee-jerk reaction?  Nope!  It was a horribly, stupid, careless accident.  So what exactly happened?  I trade through TDAmeritrade and since I can’t be staring at the market all day, I like to set up trades the night before with conditional orders.  What I normally do is set everything up, (choosing the stock name, the options I’m going to purchse, type of order etc) except for the entry price.  I normally set the entry price to $1.00 on the condition that the order is LOWER than $1.00. Well last night when I was setting it up, I set it to be GREATER than $1.00 and I got triggered in right as the market opened.  Since I did not check my account until the the day (FCX wasn’t doing much so I expected zero activity), I wasn’t able to mitigate my loss.  Now I am sitting with a number of contracts down 25%.  How infuriating and frustrating!!  But now that it’s happened, what do I do?

Well here is what I plan on doing.  Tomorrow on open, if after 15min we are still trending downward, I will buy covering puts.  It looks like we could come back down to 49.50 so that would be my target on the puts.  All the while, I will still hold the calls and only sell them if we break below 49.50 at which point I will buy more puts.  I don’t think there is any easy solution to my problem here, unfortunately.  I never should have nor wanted to get into this trade, yet here I am.  It will be interesting to see if the market will forgive me tomorrow or make me suffer, but I sincerely hope that I can mitigate some of this loss.  Time will tell but I have to take this as a lesson to be much more attentive to my orders.  This is a terrible way to lose money.  Lesson learned!

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