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> From: Harley Meyer <meyer@xxxxxxxxxxx>
> To: Metastock list <metastock-list@xxxxxxxxxxxxx>
> Subject: MU, KEA, NWAC & AMAT
> Date: Friday, October 16, 1998 3:53 PM
>
I had started a post last night but filed it away and went to the gym so
I could relax and think straight. After the Fed moved to lower rates,
you can imagine what happened to my account. Which is primarily short.
So last night I had to do some soul searching and think of a plan. The
easiest would of been to add more money and ride out the draw down. But
I decided against that. My plan this morning was to cover 100 shares of
NWAC at the open, but MU had the news that caused an opening delay. One
of the Datek Express servers was down, the one I use. So not a good 24
hours for me.
Over all I didn't want to cover anything because all of them have
pressure on them to move lower and most of the short sellers who were
going to cover have covered. Also after the big run up on Thursday the
hoopla was already in the stocks, so why cover. The damage was done and
these stocks are going to move lower on profit taking. Personally I
think this rally was a bit of a fake. Why? Those global problems are
still there and the easing of rates gets lenders back to some sense of
normality.
As far as the Fed's actions I don't see it stimulating demand for goods.
Just demand for money. If you looked at an individuals preferences, the
marginal increment in disposable income is not going to change an
individuals utility to a higher level. SO this move up is short lived.
Anyway I got caught by my shorts and had to pay the price.
MU - I covered at 34 and it was as low as 32 today. I lost a little over
$369. I will bet you dollars to donuts it will drift below 30 1/2 next
week. The only reason I covered was because of the news and my account
ratio was 46%. 40% is margin call.
AMAT - On Thursday they were running out the door until the interest
rates news came out. It was only up 1/2 at the close today. It will move
lower next week.
KEA - Sold off 1-1/16 for the day and I expect it to move lower as well
next week.
NWAC - closed up 5/8 but well off it's high. I expect NWAC to move lower
next week as well.
In closing, this was frustrating but also encouraging. I sat down and
added up what I booked this year so far. It was a little over $4,000. If
I am not mistaken, I started out with about $6,000 to $7,000 in my
account at the beginning of the year. So to only lose $360 out of this
will be fine by me. I am not happy nor am I out of the woods mind you,
but I am not overly bothered at this point. So for me this shows signs
of improvements in my trading psychology. Next week might be a different
story. Also after reviewing my expenses I will spend annually now about
$1,250 / year to be able to trade. This is due to my investing in life
time internet connection which is now paid for and will not see that
expense until DSL comes along in the future. So being able to have the
expectations of being able to continue to trade gives me piece of mind.
Have a good weekend.
Harley
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