Been wrong

Never been so wrong these past few days directionally. Account has been cut down to size due to swinging for the fences and missed.

Short 5/6 TSLA calls on earnings play.

Short 5/6 BABA calls on earnings play.

TWTR Missed

When you thought you know something, TWTR throws you a surprise with a 2 standard deviation move hurting all the PUT premium sellers.

500 million users visit their homepage and do nothing. That’s unacceptable, and the underlying was punished heavily.

Take a page out of Reddit. Don’t force users to click on a theme or topic.

 

TWTR, 6E, YM

Building a position on TWTR before they report earnings on 04/24. It is going to be a very good earnings report. The Twitter ads are very effective as it is well integrated into the app. Not going to lie, but I have viewed video ads of Mad Max, ads of mobile apps that swipes from right to left, ads of the TPS reports guy, took a sponsored survey about brand recognition, and kept up with world news everyday via Twitter.

I have continued to use Twitter more and more while not signing into Facebook more than once this month.

6E euros continue to trend higher as the dollar loses strength. The play is to buy the dips.

The indexes fell hard today, and YM manage to get a semi bounce off its lows. The declines are overdone as a reaction to China’s government finally allowing short selling. China markets only account for 2-3% of world markets. This should have been a non-event.

 

China Facing Slower Growth

China’s facing a slow down in its economy, along with export slumps. Yet, the China markets continue on an uptrend tear.

Will the China markets realize that bad news is bad news no matter how you spin it?

The Markets Should Have Traded Lower

GE decided to do a buyback. This appears to be one last attempt to prop up its stock price while insiders get an opportunity to unload as much stock in the open markets as possible.

Buybacks typically indicate a lack of product innovation, and business expansion because the business managers have absolutely no idea what to do with the money that can be applied to expand its business operations and business pipelines. It is a short sighted move, and devalues a company in the long run.

GE will be pegged at no growth for the foreseeable future, leading investors to look elsewhere.

Know the Range

Job numbers came out earlier, and I was preparing to take advantage of the spikes to the upside or downside.

The move at 8:29 gave me a head fake to the upside due to the TOS announcement that the trading markets were closed. Had to reverse and go short (taking a small loss in the process).

The proper setup was to set stop limit orders a few points outside the 2059 range of /es. It would have filled me on sell stops as it moved lower. Or vice versa and buy on the way up.

Develop Bearish Views

Building a bearish awareness has turned my portfolio around.

Playing the short side is now mentally as easy as the long side. Less waiting on perfect opportunities to go long, when short opportunities are plenty.

Am more aware of underlyings trading ranges before putting on a position. For example, seeing market highs in IWM, QQQ, and SPY leads me to look for short positions instead of going long.

VXX or UVXY

VXX and UVXY measures the volatility of the VIX.

They are both identical on intraday  charts. UVXY provides bigger intraday swings at a lower cost – better leverage on your daytrading dollars.

Zoom out to a 1 year chart, UVXY is a perennial loser due to drag. It gives up 4-5 handles compared to VXX even though they function exactly the same.

Maybe this is why UVXY cannot be shorted via shares while VXX can be shorted via shares.

If you are bearish and banking on a market crash,  then VXX is the better product for time horizons beyond a day with losing value due to drag.

Randomness

Assumptions can be right within minutes of a trade, or wrong within minutes, or takes a long time for it to be right, or forever wrong.

The game is to manage risk with the tools provided via options.

One of the few certainties in trading is that high volatility will contract, and low volatility will expand.

Took Loss on URBN

Took on a short URBN position that did not move with the declining markets.

Without a stop loss, the losses accumulated more than I expected. A setback nonetheless.

No more scalping of individual underlyings that are not ETFs or indexes because they don’t necessarily act right.