EDGE TRADER

Monday, August 01, 2005

A dead rich guy and a moth drawn to a flame

This was the synopsis of my day today. When I say rich guy, I'm not talking just any rich guy, I'm talking a rich guy with a lot of money and the last name of Fahd. My entry to my oil swing trade was most likely going to be today. "Was" being the key word. But thanks to the death of King Fahd, oil closed above $62, ruining any sane person's attempt at a short term swing trade in any oil related stock. Now explain this logic to me - a guy who's had a stroke that doesn't even have a hand in running the oil business kicks the bucket (no disrespect meant - I have the utmost respect for this man as a capitalist), and oil tests its resistance yet again. The commodity traders on the floor have some seriously itchy trigger fingers if an event with this little market relevance pushes crude to a new high. Triple top be damned, if this is all it takes, oil will be in the 70's faster than Cramer can say booyah. Cramer did his part tonight to prevent a cheap entry into a drilling stock tomorrow for a short term swing trade, although his show will most likely help my GLW at tomorrow's open. The real question is what to do with my XEC and CHK with earnings reporting soon and the inevitable boost at the open tomorrow? Too good to sell, but too much profit already not to take some off... hmm... that's why this business is fun, and calls like this seperate the men from the boys!

Moving right along. The moth would be me. The flame would be NGPS. A stock with a spread so wide you could drive a Hummer through it. Intraday, this stock's price gyrates more than a belly dancer on crack. So I had to have a little fun trying to scalp the market maker just to see if I could. I entered a limit order .01 above current bid just to see if I would get lucky and catch a market sell order. Fat chance - I held the bid for about 30 seconds, and my unseen adversary (market maker or trader) upped the ask by .01 in response. I upped my bid 3 times only to watch the bid-ask spread ladder upwards as someone stepped in front of me each time. No narrowing of the spread at all during this little game. If I was indeed fortunate enough to get execution, it would be a relatively certain moneymaker. If I want an exercise in futility around lunchtime tomorrow I may try again, but I have a feeling that it isn't worth the calories spent in typing in the keystrokes. There is no way a market maker in NGPS will let a little guy like me get execution of a market sell unless they are tipping a few at their lunchtime trading desk party. I would like to see the tape of the poor sap trading in NGPS buying at the ask using a trailing stop-loss. When that stop loss gets hit, you would really pay the piper. Ouch - sounds about as fun as ripping the crusty band-aid off my kid's day old scraped knee.

My day consisted of relieving myself of 50% of my stake in EFJI prior to earnings (discipline is what this is game is all about), my sadomasochistic fun with NGPS, reducing my position in LGF to provide capital for this week's activities, and buying a profit-taker's MFE shares on the cheap at the close for a short term gap trade.

Sleep well - if you want to really help me out (and thus part with some of your hard earned money) , make sure you enter a market buy on MFE at the open!

4 Comments:

At 10:43 PM, Anonymous emini future said...

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Regards,

Active Daytrader
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At 3:05 AM, Anonymous Rick J said...

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At 1:54 PM, Anonymous Rick J said...

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At 2:45 AM, Blogger Emini Day Trader said...

Nice blog. Keep up the good work.

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