I sold my 1000 shares of PCX (Patriot Coal) at $6.47 this morning. Net about $250. So my account is up a little bit.
PCX launched a secondary offer not long ago with offering price at $7.90. Its stock price started dropping before the offering from above $9 to $5.60 a couple days ago. I don’t know whether the secondary offering was a successful one. But I feel its stock price is stabilized. Seems to me it has a good chance to bounce back above $7 and I feel it is safe to get in around $6. It dropped to $6.08 this morning and I hope it will do that again tomorrow. I sold PCX because I am betting ADP Employment Change tomorrow won’t be good. Just a wild guess and I will see if I can get in pre-market if PCX really drop tomorrow morning.
I am bit forgetful. When I bought PCX I was planning to wait till tomorrow after the window dressing effect. I only recalled this when I read my previous post. I also notice PCX has a good volume today. Hopefully I will not miss out a good run up tomorrow.
Account Balance Changes: +$249.81
I read a few news that talked about window dressing at quarter end lately. I didn’t know what window dressing was about so I did some research on it and found the following definition on answer.com.
Window dressing is a strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. Performance reports and a list of the holdings in a mutual fund are usually sent to clients every quarter. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund’s holdings.
Another variation of window dressing is investing in stocks that don’t meet the style of the mutual fund. For example, a precious metals fund might invest in stocks that are in a hot sector at the time, disguising the fund’s holdings, so clients really have no idea what they are paying for.
Window dressing may make a fund appear more attractive, but you can’t hide poor performance for long.
http://www.answers.com/topic/window-dressing
So is that Bank of America’s up and Patriot Coal’s down today have something to do with window dressing? Probably. If that is case then BAC may come down a bit and PCX should go up a bit after tomorrow. We will see.
It is a very unproductive day for me. I watched the market all day but didn’t make a move because I wanted to take the long side. I wanted to buy something but didn’t find anything attractive. I wanted to buy PCX again at $6.15. The order is still hanging around I think. Let me know if you see something you think attractive so that I can at least have something else to look at =)
Bank of America was closed at $13.14. It went up to $13.25 after market. Too Bad I sold it already. I guess I really have a bearish mind. Citi Group’s downgrade easily caught my mind. Before the conversion I believed that BAC would be trading above its conversion price and that was why I was willing to buy 2000 share of BAC at $12.50. The downgrade destroyed my belief.
There are a number of analysts that are bearish about banks. News related to bank and real estate sector are not so good actually. Malls are going out of business. More regional banks failed, etc. However market sentiment seems still bullish on BAC. I am thinking if it worth to hold BAC until earning release. My mind right now is waiting to see BAC below $12.50 again so that I can get in. Not sure if that is going to happen.
PS
Not long after I posted I bought 1000 shares of PCX at $6.18 in after market. See the following screen short of PCX right after I bought PCX. It shows the after market price at $6.18. It proved yahoo’s real time quote is really real time. =) Not sure if it this buy is a good move. We will know tomorrow.
It is 2:40 AM on Sunday morning. I just modified the side bar of the blog a little bit to show the top commentators. It seems to work pretty well. It shows a list of the readers of this blog that make the most comments. It is a way to show appreciation for your participation. I found out this plugin not long ago. This is majorly a stock trading blog. I guess most of the readers of this blog is not from the blogging world and don’t understand what is a plugin.
Blogging nowadays are very popular. There are various blogging software out there and the one I am using is called WordPress. A Wordpress blog can be assemble using various component. And these component is called plugin. I am into blogging a lot lately. The major things in my life lately are basically work, trading stocks, writing blogs and play with my kid. I like to think about what my future is going to be like. Especially when I can’t sleep at late night. Well I just don’t see any exciting changes coming.
I am looking forward to the next trading day
Today I sold everything in my account. I mean the 2000 shares of Bank of America. I sold them at $12.59. I made some profit on that trade and my account balance went up a few hundred dollars from yesterday. But look at BAC it is closed at $12.75. From time to time I told myself not to take action too early and try to see how it close first. I just don’t believe that feeling. It is more than a few times in the pass few trading days that I regret taking buy or sell decision too early. I really just need to sit back and take it easy and not to watch the market frequently. I just need to take a peek at market close then decide whether to buy or sell. I am going to try to that next week.
I regret buying PCX and I regret selling it too early. I lost $1400 trading PCX. My account is still down $600 from its initial capital of $30,000. Hopefully I can get back to my feet next week. One thing I always feel good about is to hold only cash but nothing over the weekend.
Account Balance Changes: +$471.36
Yesterday I was bold enough to vouch Bank of America’s stock price would rise today because future was up all last night and the sentiment on Bank of America is very bullish. But Oops! Citi group downgraded it and lower it price target. Bank of America stays at the same price while the DOW is up more than 170 points today.
Another report strikes me with an Oops. Michael Jackson is reported death in Los Angles. Just a few weeks ago his long expected concert in England was over subscribed like the shares of BAC. Man, you have to admit stock price and life are equally unpredictable and they are equally fragile.
Having said that I felt it is such a pity that Jackson’s life ended up like this. I knew about him and I was fascinating about his music when I was a teenager living far away from this country and hardly speak any English. He could’ve been the most influential figure in the world and his fame and wealth could’ve easily surpassed any other super stars like Salin Dyon, Micheal Jordon or Tiger Wood if he were able to manage his life well. My impression about him was handsome, energetic, dynamic and full of potential but he ended up as a weird, sick person in my mind. I have no doubt the lack of a decent family, friendship and mentor causing him to go a skew life path.
Going back to stock it is easily for us to go a skew path in trading too if there is no decent family, friendship and mentor that we can consult with and that may be a reason I run this Blog that I don’t even realized before. Feel free to drop a line if you have an opinion.
Yesterday I bet Bank of America would rise above $14 today. It is definitely not going to happen. Because Citi group’s Keith Horowitz just downgraded Bank of America and lower its price target. If it is not for the downgrade $14 today is not out of reach as the prefer to common share conversion of Bank of America is over subscribed and Bank of America has surpassed the government’s capital raising requirements as I expected.
Well I guess, Keith Horowitz the analysts at Citi Group who downgraded Bank of America must have work with some investment banks which took a short position on Bank of America yesterday. =) It is just a wild guess. I think for whatever reason the downgrade is stupid. It hurt the sector including Citi itself. If I were him I would at least postpone the downgrade tomorrow. That will make more sense evaluation wise. Because without it Bank of America will be above $13 today for sure and downgrading it tomorrow will absolutely shake the market and show the power his opinion.
Bank of America closed at the same price as yesterday. I am still holding it so there is no change on my account balance. I am kind of in waiting mode right now. I am waiting for BAC to bounce back so that I can recoup my loss and start trading again. I feel BAC may not be a good candidate to trade since it is kind of unpredictable to me. I feel USB is more predictable.
I am holding 2000 shares of Bank of America. Of course I am trying to rally the share holders of BAC and I post the following message on the BAC board on Yahoo.
If the conversion goes well and reach BAC’s capital raising target I believe BAC will run to $14 if data released tomorrow is not out of line. I bet on the data side a bit short of expectation will not affect BAC’s running up because the conversion price is at $12.75 as I remember. If capital raising target is met it will mean prefer share holders are bullish on BAC and it will trigger a big run up tomorrow.
If BAC announce that prefer share holders are not so enthusiastic about the conversion then longs like me will be in trouble. But I believe the investment banks will recommend prefer share holders tendering their prefer shares for conversion and I believe the chance of a successful conversion is high.
I am looking forward to seeing BAC above $14.00
http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_B/threadview?m=tm&bn=1903&tid=1046900&mid=1046900&tof=1&frt=2
I found I held positions over night frequently in the past couple of weeks. For a period of time I just hate to hold position over night especially for short positions and I usually took profit or loss at the end of a trading day. Usually when I took loss it was not considered big. I did extremely well for that period 
of time though. I guess holding position over night means something to me. It probably means I didn’t get a sense of the market. I have no confidence about closing a losing position and recovering the loss subsequently. So I am asking myself the question “am I a stock trader or stock holder”.
I am still holding Bank of America. The longer I hold a position the more I doubt about it. It is the third day I am holding my 2000 shares of Bank of America at average $12.50. I saw the chance of closing out the position with a profit this morning but I didn’t do it because I was hopping for more. However I couldn’t resist my doubt on holding 2000 shares of Patriot Coal. I sold it early in the morning at $6.25 only to see it raised above $6.45. At the time I sold it I was hopping to get it back at a lower price. Like I said I didn’t get a feel of the market and again probably I act too early in a trading day.
Anyhow I decreased my long position buy selling PCX and I am not using any margin now. My account was up about one thousand at today’s close but it is still down more than one thousand dollars from my initial capital.
Account Balance Changes: +$1069.63
As you know I am taking the long side right now. I am holding Patriot Coal and Bank of America and I am losing big. When I say big I mean it is over $1,000. I remember there were a few trades that I lost big by taking the short side. The first one was on Wells Fargo (WFC). I was shorting 3000 shares of WFC at an average price of about $24.50. The second one was on BAIDU (BIDU). I was shorting 200 shares of Baidu at an average price of about $275. The third one was on Bank of America (BAC). I was shorting 2000 shares of BAC at an average price of $12.50. I lost on all three trades when I covered those shares. The total lost of the three trades was bout $15,000.
Looking back I felt I entered all three short position at a price that was not so bad. I was just not strong enough to hold them for a long period of time. For the trade on WFC I could’ve made profit if I had held it for three trading days. I clearly remember someone told me on yahoo board that I would be fine if I held them for a few days but I was too scared. See the following link to yahoo board
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_W/threadview?m=tm&bn=19829&tid=118335&mid=118431&tof=-1&rt=2&frt=2&off=1
It was the same for Baidu. For BAC if I had held it for five days I could’ve make profit. For any of those trades if I can hold till now I can make over $1,000 on each of them. Of course I can’t own all these three positions at the same time. I am just assuming. If I hold the short position on WFC till now I can make $4,500 instead of losing almost $10,000. In fact my trading started to fall apart after the big lose on shorting Wells Fargo.
Before the big lost on WFC I strongly believe in a trade methodology that you can start a position with small money then keep adding to the position when it goes against you and eventually you will see the turns and you can get out of it with break even or profit. I was able to make $10,000 in just a few weeks. But the problem with this is that your position will get very big when your holding keep going against you and it can max out your account before you see the turns if the entry point you choose is not a good one or you start too big. Eventually your position will get so big that you are too scared and give up. That was what happened on my trade on WFC. Thinking back this methodology may still work I just need a strong mind and a better decision to choose an entry point with the right amount.
I forgot to mentioned I had another big short trade. I ever shorted 10,000 share of LINTA at $5.16 average back in April before I started this blog. Same thing if I had waited for three trading days I could’ve made profit. I didn’t make any trades today. My account was up a few hundred because both of my holding went up a bit. I will update with you again tomorrow.
