Someone on Tabulas (can't remember who, claim in comments) once wrote about the horrible habit of sports writers to incorporate puns into their headlines. One of the downsides of the Mavericks making it to the NBA Finals is I couldn't start a pool on lame puns on ESPN for a Sun/Heat match up:

  • Scorched in Miami [When Miami would lose at home]
  • Burnt in Phoenix [When Phoenix loses in at home]
  • Rising Sun burns Heat [For the inevitable game when Nash would break out for 40/6/12]

Well, you get the idea.

If you think sports headlines are bad, you should read financial headlines daily for a good laugh.

For example, yesterday's market summary headline was something like: "Stocks closed mixed on inflationary warnings." Mixed? I have a long list of stocks I check at night daily, and almost none of them ended up green. Mixed session seems to imply ... well.. you know... 50/50 green/red.

Here's another template headline (Mad-lib style): Stocks [plunge/rise] on [oil/gold] price [increase/decrease]

You can literally mix and match. For example, when Iran goes around proclaiming they're not going to back down on nuclear power (which they shouldn't, they have every right to pursue nuclear power), oil prices usually rise. When this happens, you'll see about a 50/50 chance that stocks will rise or fall. It's awesome!

What really sucks for Bernanke is everytime he opens his mouth, the stock market seems to tank. If the economy is growing, then we have inflationary pressures, so the stock market will tank. If the economy shows stagnation, then the stock market will tank. How can you win?!

Those market summaries should just provide ... facts. Like an actual statistical ratio of winners to losers, or some sort of technical measurement of whether the market is oversold or overbought (stochastics).

. . .

It feels good liquidating some of my more volatile holdings into cash. Market orders are wonderful. After three consecutive days of 10%+ gains, I knew CUP was due in for a retracement. Before work, I threw in a market order to liquidate my CUP holdings; I ended up with a nice 8% gain for holding two days. At around 3pm, I decided to check CUP; if CUP was holding well, I would get back in. (The reasoning here is that CUP has a tendency to retrace around 6-7% on a daily basis on previous sell-offs.). If CUP continued to sell-off heavy, I would wait on the sidelines before getting back in. The problem with these highly volatile stocks is that you can't really read a technical chart; an even moderate sell-off in the larger scheme of things can be really painful (this is the lesson learned from NXG - I went from +15% to -10% in a matter of days).

Look at the CUP chart:

The 20mda, 50mda and 200mda are useless as support levels. I guess what I'm trying to do is maintain a high level of liquidity (prevent myself from getting locked into a losing position) without taking too much of a risk.

In any case, I managed to dump my CUP shares at $5.73 (bought for $5.30). When I checked the buy/sell orders at around 340pm, I noticed that there was a slight decline (there was also a huge bid/ask differential). Given PCU's intention of making a JV or a straight-up buyout offer by tomorrow, this seemed a bit odd. As I was watching the bid/ask, I suddenly noticed a huge surge of buying. 1500 and 2000 blocks started flooding the buy side and the stock started jumping up in $0.05. I had Fidelity open, so I threw in a market order and managed to lock in a significant block at $5.80. Within a minute after that, the stock was sitting at $6.00.

AH trading has been nuts - it's now sitting at $6.87. Apparently news hit the wire that CUP was officially going to start a 30-day process for buyout offers on their Peruvian mine (with a mine life of 33 years)... given Garcia's recent victory in the presidential elections (the lesser of two evils), copper's recent surge in price ... this is probably the best time for CUP to sell itself out.

What a crazy run. I have no intentions of becoming a day-trader; I guess all my research into commodity companies (especially my past history with PCU and NXG) has finally paid off.

But being a momo trader (momentum trader) seems to be the smartest play. I've been doing some momo paper trading and doing well - maybe I'll start doing some more momo trading on my IRA.

Currently listening to: Ashton Allen - Counting the Cost
Posted by roy on June 6, 2006 at 02:54 PM in Finances | 6 Comments

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Comment posted on June 7th, 2006 at 01:07 PM
be careful about triggering SEC day trading rules.

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Comment posted on June 7th, 2006 at 03:34 PM
ooh thanks for the link! fortunately for me, the $20/trade makes "daytrading" impossible ;)
Comment posted on June 7th, 2006 at 03:51 PM
yes, but just so you know, a pattern day trader is someone who:

Pattern Day Trader

The term pattern day trader defines an account that:

• Executes four or more day trades within a five business day period, or
• Incurs two unmet day trade calls within a 90-day period

A non-pattern day trader account, or an account with only occasional day trading, becomes designated a pattern day trader if it meets either of the above criteria.

if you get hit with this designation, your account gets suspended unless you can meet the $25k requirement
Comment posted on June 8th, 2006 at 05:25 AM
interesting, i had no idea about this. i did some really basic skimming at fidelity, and it looks like they built in a check for this into their system, so i should be ok.

according to this, i've only day-traded once (on pcu's 1q earnings), and that was to prevent a heavy loss (wasn't planning on selling immediately).

i should be ok, but thanks for the link, i'll have to be careful!
Comment posted on June 7th, 2006 at 11:57 AM
han pun.
Comment posted on June 7th, 2006 at 02:37 AM
I wrote about how puns are generally annoying in text, and my friend Adam commented about how they take it to the next level in sports reporting. True story.