Sold -2 RTH 100 AUG 09 85 PUT @2.00 Mark 84.07

The market is finally starting to ease this week. But RTH is holding its fort pretty well so far. So I placed a stop in the morning at the original stop of \$83.91. I got stopped out right at 3pm when we have our usual last hour lift. However, my COF puts remain in case the weakness continues.

In hindsight, this trade was bad. The entry was good. But I screwed up on the exit. When RTH gapped higher (passing my stop) the day after I entered, I should have looked for an exit. The opportune time to ditch was on August 5th when RTH backed down to test \$82 briefly but held its ground to a higher close.

Once my stop is hit, my priority should be to look for an exit to minimize my loss.

Total loss for this trade is (\$3.30 - \$2.00) x 100 x 2 + \$15 = \$275!

[caption id="attachment_1683" align="aligncenter" width="500" caption="Retail HOLDRS ETF"][Retail HOLDRS ETF][][/caption]

[Retail HOLDRS ETF]: http://traderpau.files.wordpress.com/2009/08/2009-08-11-rth.png

Posted 11 August 2009 in stocks.

Bought +2 RTH 100 AUG 09 85 PUT @3.30 Mark 82.91

This is a belated post on a re-entry for Retail HOLDRS ETF (RTH). I entered into a RTH short again last Friday when we failed to stay above \$83 into the close. The doji on Thursday seemed like a good pause for the rise. Then the inside-day (trading within the range of the previous day) on Friday with a close looking to be below the resistance seemed good to go short at the time. Then Monday we made a slightly new high and closed near the top. Today is continued indecision in the market as we hung onto a high level. (See Figure 1)

However, we've never touched my mental stop of \$83.91 (Figure 2) yet. Thus, I continue to hold this position while the price swings around.

Entry: \$82.91

Stop: \$83.91

Target: \$79

Reward / Risk = 3.91 / 1 = 3.91 \< 5, which is less than my trading rule stated. I'm gonna tighten my stop to \$83.50 based on today's (Tuesday) action.

New stop = \$83.50

New Target = \$80

New Reward / Risk = 2.91 / 0.59 = 4.9 \< 5 ... still not good!

This isn't a good entry because I based this entry mostly on my previous analysis plus the charts of the day and didn't reassess the situation fully. I was away on holiday on Friday when I made this trade near the close so I didn't even have all of my analytical tools available.

[caption id="attachment_1651" align="aligncenter" width="500" caption="Retail HOLDRS ETF"][Retail HOLDRS ETF][][/caption]

[caption id="attachment_1652" align="aligncenter" width="500" caption="Retail HOLDRS ETF"][Retail HOLDRS ETF][][/caption]

[Retail HOLDRS ETF]: http://traderpau.files.wordpress.com/2009/08/2009-08-04-rth.png [Retail HOLDRS ETF]: http://traderpau.files.wordpress.com/2009/08/2009-08-04-rth_prop.png

Posted 04 August 2009 in stocks.

Sold -2 RTH 100 AUG 09 85 PUT @3.40 Mark 82.81

The market gapped higher today. RTH broke the 82 resistance clean at the open. It touched 83.75 at the high point but closed with a doji on low volume for the day. I was very tempted to hold my short overnight because of the heavy last hour selling. This certainly looks like the day to call it a top. However, I've been feeling like this for weeks, if not months, now and the market keeps going higher.

So I've managed to be disciplined and dumped my short RTH position seconds before the close. Seeing that although the last hour is encouraging for the bears, we still didn't close the gap.

Also, I'll be away tomorrow, so the risk is just too much as my stop has come and gone already. Even though this trade didn't turn out as planned. I'm glad that I've stuck to my strategy and didn't push my luck as I've done so many times before, only to regret my decisions.

It's better to be late to risk paper profit than be early and lose real money.

For this trade, my loss is \$120 + \$15 = \$135. Oh well, it could have been worse. The choice to hold out until the end of day to sell the losing position was a good one. I noticed in the morning that sentiment wasn't that strong as we inched upward. Particular on a big gap day, we need some serious momentum to push the market deeper. That didn't happen as I watched this morning so I decided to wait until the last hour.

[caption id="attachment_1647" align="aligncenter" width="500" caption="Retail HOLDRS ETF"][Retail HOLDRS ETF][][/caption]

[caption id="attachment_1648" align="aligncenter" width="500" caption="Retail HOLDRS ETF"][Retail HOLDRS ETF][][/caption]

[Retail HOLDRS ETF]: http://traderpau.files.wordpress.com/2009/07/2009-07-30-rth.png [Retail HOLDRS ETF]: http://traderpau.files.wordpress.com/2009/07/2009-07-30-rth_prop.png

Posted 30 July 2009 in stocks.

Bought +2 RTH 100 AUG 09 85 PUT @4.00 Mark 81.96

This is a small short position entered just seconds before the close today. Here's my case for further weakness.

  1. The market gap down from this morning remained open.
  2. We have intraday big block dumps (highest 1 min volume bar correspond with big drop)
  3. We are making lower highs and lower lows these past few days, although barely
  4. This market has been brutal on the bears. So a significant move could be imminent as most bearish retailers aren't positioned to benefit from it.

However, the recent strong closes are not to be missed. We've been having good up volume in the last minutes of the close these past few days.

My OIH short was a good play today. However, its reward/risk isn't as good now. So I'm entering into RTH purely for its limited risk. It's right up against the resistance now. Although it's very possible that it'll gap up to take out the obvious stops. That's why I'm using a small position in case it gaps up to close the long term gap (\$83.50).

Entry: \$81.96

Exit stop: \$82.40

Target: \$79.00

Reward / Risk = 2.96 / 0.44 = 6.7

[caption id="attachment_1642" align="aligncenter" width="500" caption="Retail HOLDRs ETF"][Retail HOLDRs ETF][][/caption]

[caption id="attachment_1643" align="aligncenter" width="500" caption="Retail HOLDRs ETF"][Retail HOLDRs ETF][][/caption]

[Retail HOLDRs ETF]: http://traderpau.files.wordpress.com/2009/07/2009-07-29-rth.png [Retail HOLDRs ETF]: http://traderpau.files.wordpress.com/2009/07/2009-07-29-rth_prop.png

Posted 29 July 2009 in stocks.