When things were at there worst yesterday, besided feeling like throwing up, I felt the markets were extremely oversold and ready for a bounce. I entered seven short term positions which I sold into today’s strength (please note that I posted tickers of my entries yesterday). The only thing that links these positions is that they were momentum leaders that had become extremely oversold.
When I say extremely oversold, I’m talking oversold levels that hadn’t been seen in months or even years. Even in bear markets, when oversold levels reach these extremes, it’s a good bet to position for a bounce. While this bounce could last longer, I’m content in taking my profits and waiting for the market to show it’s hand.
I bought 250 shares of AAPL at $113.55 and exited at $121.80 for a $2075 gain (+7.3%).
I bought 150 shares of BIDU at $164.30 and exited at 178.84 for a $2181 gain (+8.7%).
I bought 300 shares of ZEUS at $22.26 and exited at $24.10 for a $552 gain (+8.2%).
I bought 300 shares of RIO at $34.83 and exited at $39.95 for a $1536 gain (+14.7%).
I bought 200 shares of LEH at $51.15 and exited at $58.41 for a $1452 gain (+14.1%).
I bought 200 shares of NOV at $102 and exited at $109.29 for a $1458 gain (+7.1%).
I bought 200 shres of CROX at $45.50 and exited at $50.60 for a $1020 gain (+11.2%).
Total gains (not including commissions): $10,274.
This is the best trading day I have ever experienced. I was feeling great about myself after I exited all of my positions, but upon further reflection, I probably should not have gone “all in.” When I say “all in”, I mean all in. I was trading on margin, so my $10,000 in gains could easily have been $10,000 in losses, had I been wrong. I usually am very good at position sizing and controlling my emotions. However, yesterday I felt like it was one of those days that only comes along once in a great while, and I wanted to take advantage of it. In my trading journal, I noted that today’s gains were a combination of “good market intuition and luck.” For the sake of my future trades, I hope there was more of the former.
Over the weekend I hope to provide charts and analysis of today’s trades.