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The Market Sucks today!

January 11th, 2008 at 06:53 pm

Let me tell you the background first before anyone replies: I have some play money that I trade online from time to time aside from our emergency fund or retirement accounts. I strictly use this account for the purpose of taking profits to purchase gifts or do whatever. I'd had this account even before I got married so I'd had it for years.

Anyway, I've been following this one stock for about a year, which by the way I'd made some money just before x-mas. So I'm very familiar with this stock. So the same stock took a tumble down 37% post xmas holiday. No reason why the stock is down, excellent fundamentals, and earnings outlook. But lately, traders took profits which pulled the stock price really low.

So this week the stock was downgraded for the year down from its high $112 in early December to $71 Tuesday, where it became so attractive and everyone including grandma was scooping some shares. So i thought, why not...so i bought some 30 shares at $72 Tuesday. So for the next two days all market traders started buying up the stocks because of its discount price, pumping it up so high it reached $79.00 a share at one point and the volume high @ $20 Million trades, unusual for this stock since it only average about $4 million volume a day.

So by noon yesterday I was deciding whether to take the profits about $210.00 @ 79.00 a share. So here's what I'm thinking at this point. Should I sell now or later. I also knew this stock will go up again $100 at some point, especially when the earnings comes out in several weeks. It should provide a nice rally. I also hate paying commission. But I also knew this stock will pull back for profit taking late Thursday and early Friday and I could be the last man standing. So come Friday, I expected to be down but not much. So after all that, I stayed bullish and didn't sell.

So I woke up this morning and got to work. Check my account, the stock was already down $4.00. So I was like ok, not a problem. Then I watch it for the rest of the day which continued to go down until the market closed @ $71.40. So i just gave up and didn't do anything. On paper I lose $210.00 so what's the point of selling. I just let it ride. So at the end of the week I'm down $30.00 instead of up $210.00 for a nice weekend getaway with my kids. My wife is working all weekend. Instead we'll be at home watching football.

But what's tick me off, I knew I could have sold it yesterday and take a nice profits but didn't. I listened to my own logic instead of my trading instinct which would have done the opposite: bought back the same stock today at a lower price $71.40 while taking profits.

I'm glad I took this out of my chest. I actually feel better (deep breathing and release....ha) Smile

Just another day in the office.

7 Responses to “The Market Sucks today!”

  1. Broken Arrow Says:

    Which stock is that? I hope it's not financial. Big Grin Everybody has gone cuckoo with Countrywide being bought out by BoA.

    The stock market in general has been taking a hard hit recently. However, depending on your investment strategy, it shouldn't even matter really, especially if it has excellent fundamentals.

    That's the problem I have with staring at the ticker too closely. To me, it just doesn't make any sense the way it moves most of the time, and of the times that I do know, most of it is AFTER the fact. Big Grin

    This is just my opinion, but unless you have an insight you are very confident with, I think it'd be easier to just buy and hold until you need to sell it. And yes, go watch football instead. Big Grin

  2. merch Says:

    CFC .. unbelievable. Rocked from 4.50 to almost 9.00 yesterday. B of A says will but it at 6.90. I agree financial need to test lows. I'll have to look this weekend but I believe the technicals keep getting taken out. (Never try to catch a falling knife.)

    Lee, if your a short term trader, protect your profits. But a trailing stop loss at 10% or whatever. If the stock goes up, the stop goes up. Once the stock falls from high by whatever the stop is ($1 trailing or 10%). Trade gets executed. Only bad thing, overnight news. It will kill you every time. I like to trade baskets of securities.

    I am starting to look at some of the banks and brokers. Just waiting to see of support holds. GS, LEH, C, etc held up pretty good today. Most still got downward trending lines, credit issues ahead.... Again, I'mn just keeping an eye.

    Good Luck (seriously read up on trailing stops).

  3. tripods68 Says:

    Good Point! I'm really a casual traderSmile So, yes I do need protect the downside.

    TD Ameritrade has trigger alert which also can execute at set price or % which I use but not often enough. I put the stop loss at @ $65.00 when I bought it $72.00 but I never adjusted that price when it got to $79.00. So that was my second mistake! Oh gee...I didn't have remind myself that! Frown

  4. merch Says:

    lol....trailing stops will automatically adjust upwradly when the price goes up.

    So you buy a stock at 72 and put a 5 dollar trailing stop on it. When it goes to 79 the stop loss goes to 74. If the price hits 74, the trade is triggered. I like the trailing stop loss because it will move the stop if the up if the trade is moving in your favor.

  5. kv968 Says:

    May I ask, was this stock by any chance Garmin? I was looking to buy some in mid-April when it was in the low 50's but never pulled the trigger.

  6. kv968 Says:

    You may want to use a TRAILING stop loss order instead. That way the percentage you enter as a stop will adjust with the price as it goes up.

  7. tripods68 Says:

    Yes, it was. That's excellent guessSmile
    I got the trailing stop put in now.Smile

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