Stock Traders Blog

For the past few weeks I almost always playing on short position of the bank stocks because I believed the recent banks run up was too much and being on the short side had more chance to make money. I was right most of the time except the Well Fargo bet which caused me to lost more than nine thousand dollars. Now the Federal Reserve has presented to the market some reality and the world market retreated. I feel that maybe a buying opportunity and here is what I think.

There are still many market participants that are not convinced by the Fed and they are more buying into the view that the banks problem is behind us. They may also see it as a buying opportunity. It is the second down day after the Fed released it minutes. People hope the market will go up tomorrow.

The average offering price of Bank of America’s new shares was $10.77. From the past two days’ trading I saw the market hope to trade it at a price close to $12. Even today when the DOW dropped 1.5% its price only went down a little bit at close and it was traded higher in after market. In fact it was traded above yesterday’s closing price most of the time today.

I don’t plan to hold Bank of America for a long time. If a big sell off is coming I don’t think it will come tomorrow. There are no data released tomorrow. It doesn’t seem that the world market will be over reacting fallowing US market’s drop. I feel it is kind of save to hold BAC till tomorrow or maybe a bit longer.

I took a big long position in banks and I didn’t feel I am gambling. I am 80% sure I will make some profit of the position I have today. I shorted 2000 shares of BAC in the morning at about $11.85 but I covered it too early at about $11.75. Close to the end of the day I bought 2000 shares of BAC at about $11.45 and 1000 Share of USB at about $17.99. My account balance is up almost $200 when calculated using the closing price

Account Balance Change: +$195.35

Related posts:

1. Too Much Selling Pressure on Bank of America
2. Which Direction is Bank of America Going?
3. Bank Of America is Still Bullish But I Bought Western Refining Inc Instead
4. Trader’s Mind is Full of Dilemma – My Thought Gone Wild With Bank of America
5. No one Understand Bank of America’s Book and I Hold Shorted Position For The second Day