Tuesday, June 23, 2009

Trade 15 & 16: Easy Game?

Today was going to be an obvious downtrending day, with SP500 having the largest decline for the past 2 months.

With this in mind, my main strategy was, find the stocks that will perform even worse than my normal basket of stocks and try to sell into strengths, with charts that offer decent risk/reward setups.

I found 2 that fit this profile, FMG and MQG. Interestingly I am in the money with these positions - the power of following the trend.
If the next 2 or 3 days sees continuing selling bias, I will be making some decent profits.

FMG was falling nicely - problem is, I was only shorting 100qty - I have to get better at betting consistent amounts.

MQG has been one of the better performers in the 'green shoot' scenario. It will obviously be the fastest one to fall also, as people realise their false sense of economic security. If we see a global deleverage, MQG will have nobody to borrow money off, and deals will dry up etc and what happens to that magic model? - POOF!

My timing on both shorts were satisfactory, and I feel that knowing how the day's going to trade is a key to understanding which way you want to bet. IS the day going to be a RANGE, Up or Down?