Well, the second half of my my strategy was covered at a loss; the B2C I dealt with diverged from its pig peer and kept running. The lesson to relearn here was to not even fight the short term trend.
I recovered from that little situation and stepped in front of the overall weakness in financials right at the close on Friday. After speaking with a Merrill analyst after Friday's close, I was able to determine that the Wachovia issue, while holding significance for the sector in general, was not appropriate for other issues with higher quality reserve-to-loan ratios. WB was at the low end of that spectrum at 1.17, I believe, and the increased reserves only brought them to the industry median, while other higher quality issues like the one I was looking at was equally divergent from the median, but on the higher quality side.
I used the extremely oversold condition as a mean-reversion play on a high quality issue to basically recoup my position back up to par for the month.
I guess I could say I'm on the 'baby-step' program to try and get my rhythm back in trading, and closing today's trade has helped me get that feeling back, or at least more so than before. I noticed that my discipline had softened somewhat and my feel for the trade had become a bit calloused with distance. Apparently discipline is like a muscle, and it too can atrophy without sustained use.
Rainier |
