Monday, April 10, 2006

The day of ill omen

Day 7 - Monday
Total Account Value: $5652
Available Equity: $4386
Positions Opened: 1
Positions Closed: 2

The week kicked off to a very unnerving start. I'm not superstitious, nor do I believe that bad omens can affect trading or life in general, but today I was a little on edge. On Sunday I had placed my first ever football bet for my sister and I as a birthday gift (yeah I know, bad gift, but it was her request). It was a relatively safe multibet for three teams to win (home teams and favourites) but the odds were quite nice at $3.30. The first two teams had already won and all that remained was for the Crows to get up over the Eagles. Despite being healthy favourites, they fell in the last moments of the game to lose by two points. It reminded me why gambling is a bad idea!

This morning the paper delivery man delivered the wrong paper - the cheap tabloid! I love reading the Monday morning sport and it ruined my routine. After this I logged on the my PC and began to open my CFD trading software. Suddenly, my virus checker was reporting a serious virus that was crippling my entire system, preventing me from even opening the Control Panel. I don't remember downloading anything suspicious!

Later in the day, the most bizarre occurence of all...

A man called my house looking for Andrew (me). My sister handed me the phone and the man said, "Hi Andrew, you just sold me a wooden bookshelf on EBay." I thought WTF??! "Are you from EBay?" He replied, "no, you auctioned a bookshelf and I'm the winning bidder. I want to arrange postage." I stammered like a simpleton that I don't use EBay, so he then told me the auctioneer was of the name "Liz xxxxx" and had given my home phone number as a contact address with the instructions to "speak to Andrew". The dude wasn't too happy.

So while all this crazy stuff happened to me today, the market also dropped heavily on the back of negative movements in the Dow Jones and Nasdaq indexes. The frustrating thing was that while my entire watchlist was red (with the exception of the bullish CPU), my two short positions in MBL and TAH had barely fallen at all, despite overbought signals. Barely 30 minutes had passed before I lost my long position on the ultra-volatile Santos Oil (STO) in which sadly, my stop loss failed to trigger. I had to close it out myself but luckily the damage wasn't too bad.

As the day moved on, CML began to make a comeback and had added 24c at the close to remain above old highs. This was very encouraging considering how much it gapped down, and I am confident in holding this position for a little while longer. MBL continued to show indecisiveness, but by the end of the day a clear "tristar bearish" pattern had formed. In addition to this, volume spiked strongly on Friday despite the weakening uptrend. Today volume was considerably low in confirmation of a loss of confidence. If technical analysis means anything, the stock should fall tomorrow.

I considered going long on Computershare on the back of its gains on a bearish day, but it failed to overcome Friday's high. As it started to lose momentum in the last half hour, I put my trigger finger back in its holster. I'm making a conscious effort this week not to be gung-ho with my trades. I spent a lot of time applying 50 day SMA's to my charts, reading up on complex patterns and identifying potential entry signals for Tuesday.

I finished down again but am definitely not out.


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