Satuki @ Home

I did it anyway. Why was it dangerous to short in a strong market? It is simply because doing so is like picking the path of most resistance, aka bucking the trend. Do you still remember what the “boy plunger”(Jesse Livermore) once said? That is a rhetorical question. We already know the answer.

I should have gone long right after the market open. Instead of doing so, I hesitated for some reasons I do not even remember. Trust me. It happens. There are always a lot of voices in my head pulling me in different directions. So the big rally in the morning slipped through my fingers. This is totally fine and it happens more often than you think. I do not chase stocks. Day trading requires entries with laser point precision due to our tight stop losses. If I miss out on an opportunity, then let it be. So I was quite all the morning. I wanted to go long since it was natural to do so in a market like this. I looked all over the place. Nothing fit my requirements. One of the reasons was that I did not see much upward room for most stocks after such a big rally.

But I have a habit, which is to prepare for both directions regardless the current market conditions. So I went short on GS and RIMM, 2 of my pets. You have to love these guys’ amazing liquidity. GS dropped because Meredith Whitney was bashing Financials on CNBC. Thank her very much for this one. Here is the chart.

Click on the image to have a better view

GS ( Goldman Sachs Group, Inc)

As for RIMM, this guy was weak all day long. I use both level 1 and 2. Tape reading is essential here. I watched both RIMM and GS the whole morning. You could see big buy orders coming in one after another and yet the stock just could not move up. It was totally suppressed by the sell side. So RIMM was extremely weak. It happened to GS too but not as bad as RIMM. Ironically I made more money in RIMM on the long side than the short side.  See how I flip flopped RIMM below.

RIMM (Research In Motion Limited)

You can see the trades here. I hope you are doing well.