BAGAKOAA May 25, 2010 Stupid is as stupid does
May 25, 2010 Stupid is as stupid does
OK, I broke every rule in the book this morning and gave back about 20% of the gains I had made since the February rally which did end about May 7th. So I took profits and gave about 25% to the government (or will next April) because of the Flash Crash, and now in one day sucked another 20% out of the gains because of some really stupid decisions today. So today we will show you how to loose money, I am actually getting quite good at it this week.
If you read the blog from last night, I fortuitously called a very weak opening because of the saber rattling between Clinton and Kim Jong-il on top of the Euro sliding more, Spain’s banking casualties, and a plethora of stuff that I had a feeling would cause the market to open way lower. Now I had well placed stops on all of my stocks. BUT, I knew the market was going to blow though those stops so why wait and take the lower sales. At 5:30 am I was premarket selling everything. That’s right, I was selling everything and I had not stocks with much if any gains. Got ride of AAPL, GIS (OK had a little gain there), IBM, KO, INTC, everything except GLD, SLV and VXX. Now I knew the VXX was going to pop from 35 to 40-50. Come one we had that crazy person causing all kinds of problems in Korea and Jong-il was not helping matters either, so I jumped in with both feet on the VXX. Got a great entry point at 35.25. So I am banking on a 13% jump today at least in the VXX. Gold was going up a bit too so I got some more of that.
Then something crazy happened. We reached our lows of the day by 6:41 am and the market with all this turmoil kind started to inch back. So from that low of 9793, it came back kicking my VXX every step of the way back to 10,243 just 20 points short of yesterday. In looking at my trades, NONE of my stops would have triggered today, I would not have lost 6% on a sizable VXX trade (I did exit my VXX with that 6% loss which was the ONLY thing I did right today as the VXX came down 11% today.
In essence, I did as I did and not as I say. I got caught up in the emotional frenzy of the moment and did the unthinkable, got out of the game.
Speaking of the game, I need to not look at the market tonight. We just got home from the Angel’s Game 8-3 Angels, so I am going to read and hit the sack.