Thursday, September 10, 2009

10/09: A return to blogging

I take up the task of blogging again, after a long absence. No one has missed me, as my readership is myself, and my chief task in these pages shall be to catalog my work and thoughts regarding the markets. I believe that such systematic writing, on these public pages, will be of significant help.

To re-commence, then, today has been a notable day on the markets. The S&P500 and NASDAQ have both hit intra-day and closing highs for the year. The DJIA narrowly missed an intra-day high for the year, coming only a quarter point short.

Leading sectors have put even in a more dizzying rally than the overall markets. Financials and materials stocks, in particular, have witnessed "parabolic rallies," a personal term that I use to denote price change that has a positive first and second derivative. Another way of characterizing this movement would be to say that the stock's RSI value is very high -- probably over 70. Such is the case with TIE, in which I took a short position in the last hour of the market's trading today (to be precise, I am long in short-dated, deeply out-of-the-money put options).

I also have an ongoing long position in BAC puts, a bet that has been a thorn in my side for the past few days. I have a nasty habit of extreme reluctance towards closing losing positions, preferring to instead let them run. This foolish stance must be revised. I must continually re-evaluate any position regardless of my P&L, and exit when I no longer feel strongly about direction or probability. So it must be with BAC. If I am no longer bearish on BAC and feel that a pullback is imminent, I should sell the puts, even if it is at a loss.

I must forgive future readers -- id est, mostly myself -- for the unedited nature of today's and subsequent blog entries. I intend for these entries to be more-or-less of "stream of consciousness" in nature, and as such, there will be requisite imperfections in flow, argumentation, and choice of words. A perfectionist by nature, I cringe, but I must try going ahead with it nonetheless.

Tomorrow brings more than a big day on the markets. I will also spend the day travelling, with an early morning rail journey to Milwaukee's Mitchell Field, a late morning Maddog flight to Atlanta, a day in this capital of the Southeast, and a late-night 767 voyage to the City on the Bay. I haven't much sightseeing for Atlanta planned at present, as I've been preoccupied with the markets today; but I am looking forward to the visit all the same. More dramatic is my lack of plans / accommodations in San Francisco -- this, meanwhile, caused by a dearth of liquidity. Thankfully, the opening of business tomorrow will bring in a trickle, but barely enough to book a hotel and have a tad of spending money. And I'll still probably have to spring for a rental car. Tough times...

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