“Follow-through? What follow-through?”
Intraday Investments Trading Summary for Tuesday, July 10, 2001
After yesterday’s attempted reversal in the Dow and Nasdaq, the markets gapped up this morning in anticipation of another day of follow-through to the upside. But, not only did the gap quickly get filled this morning, but we also went so low that we broke below the lows of both yesterday and last Friday on the Nasdaq. Every attempt at rallying today was met by sellers, which led us lower each time.
The challenging part about trading today was that we did not think it was wise to sell short until the markets broke below the lows of Friday. Otherwise, we could have easily gotten caught in the “trading range blues” and churned our accounts. Instead, we thought it made more sense to sit on the sidelines primarily in cash until the lows of Friday were taken out. However, once Friday’s lows were taken out, the selling was so sharp that we were not presented with any short entries that afforded us a positive risk/reward ratio. As such, we missed taking advantage of much of the selloff today, but in return we minimized our risk and protected our capital—something we rarely regret.
Here is a list of the round-trip trades we made today: JNPR short + 0.70, PVN long – 0.50, NVDA long – 0.85 (the devil got us!), AMCC long – 0.56, SLB long – 0.74, XLNX long – 0.89. Much like yesterday, the highlight of today was one of our option plays. We covered the rest of our IBM July 110 calls at 1.10, which yielded us a 6-point gain from where we shorted on June 22. Including the profit from our IBM calls, we netted about a 3-point gain in the Online Trading Center today. In addition, we initiated a new swing trade in the Oil Service (OSX) sector today by taking SLB long overnight. Also still holding the rest of our NVDA July 85 short calls overnight from a few weeks ago.
Trade Well,
Deron, Steve, and Ed
General Partners
intradayinvestments.com |
