5 results for tag: drop


WalMart goes profitable.

When we started trading Walmart on January 6, we did not know how things would work out. We had a thesis, and it turned out to be quite wrong. In fact, it would have been hard to have been more wrong than we were. Within the first week, WalMart changed from a Bull trend to a Bear trend and we were down over $1500. That is not how we like to start out trading a new symbol, but the reality is that sometimes it happens. Anyone who tells you they can trade without working through losses of this type, is not being truthful. The critical thing is to have a plan from the start and to work through events as they unfold.   And they DID unfold in the worst ...

Ignore it.

The market is up big one day, and then down big the next day. We try our best to ignore it and trade according to our plan. You know Warren Buffett always says that he doesn't pay a lot of attention to daily market swings. That is not his plan. He buys good companies cheap, and waits patiently. Of course, he has enough power to influence the Board and the operations of said companies, should he choose to do that. On the other hand, some people DO trade the daily swings, and that is their plan. They like the excitement of the quickly moving game. This is the game that most people fall prey to - and they lose everything as they watch their account being ...

What to do on a big down day?

Trade according to your plan. Ignore the noise. Know exactly how your account makes money, and keep doing it. You cannot see your account value increase every day, or every week, or every month. But, you can take correction periods like this one and do the things that set you up to make a lot of money when the selling ends, which it will. Look for opportunities. Today, we increased our new XLB position and it's now down $167. We adjusted our WalMart position by rolling all of our short puts out to the MAY2 weekly expiration. That position is now down $520 with continuing daily time decay of about $27. Please stay tuned for the lessons that will ...

New trade opened today.

We look for things that are obvious, without listening to all the talking heads. It's so easy to be distracted by the noise on the TV and in the financial press, and you can miss things that are staring you right in the face. Today was a nasty day with the DOW down 1.6% and the NASDAQ down double that, or 3.1%. It would seem that the train has come off the tracks. However, when we look at the relative strength of the Select Sector SPDR's, we see an interesting dichotomy. Outside of the XLU, which has the best relative strength due to the selling (and the flip-side buying of yield) we notice a different picture. The XLB (materials) and the XLI ...

Gaming the market…

Some headlines from the press tonight: "...any rebound may be short lived", "...the shakeout in stocks is likely to persist", "...scared....get out of stocks". It's hard to find anything positive - so you would think the markets are falling apart. But, what has changed lately? Little. If we go back just 3 weeks to March 19 when Fed Chair Yellen issued her "6 months" comment, we have gone nowhere at all. The DIA closed at $162.16 today, and on March 19 it closed at $162.19, virtually the same level. There has not been a surprise structural change. Everyone knows that the Fed is getting out of the QE morass. I guess you could guess that maybe her ...