Monday, October 26, 2015

The Seven Five ... My Review

My Uncle from the Italian side of our family was NYPD, and my Cousin on the Irish side is an ex-convict. They were both complicated characters who did some good things and also did some bad things. I love them both, and as a kid I mostly saw their good sides. There were moments, however, when their bad sides came out. 

If I've learned nothing else at 46 years of age, it's that life is much more complicated and messy than we give it credit for. We all struggle with the duality of human nature, and we live in a society that haphazardly attempts to label certain people "good" and other's as "bad". This is a fool's errand ofcourse, as we all have done some wonderful things as well as some things we're not so proud of.

I thought some of the reviews I read on "The Seven Five", most notably from the New York Times, were unfair in their suggestion that the documentary lacked a moral compass and that Mr. Dowd was not remorseful. I disagree, he has suffered immensely for his actions and if you listen to him on the Joe Rogan podcast, I think you will find him a man who is trying to do good after a life that was riddled with bad. We can learn a lot from him given his time as a corrupt police officer, and his 12+ years spent in Federal prison.

While watching "The Seven Five", the quote that kept playing through my head was "the road to hell is paved with good intentions". All large crimes seem to start from some simple misdeed, and that certainly was the case here. Mr. Dowd, his partner Kenny Eurell, and other officers in the documentary did not set out to become criminals. The dire circumstances that existed in East New York at the time, the testosterone of 20 something year old cops running around with unchecked power, and low salaries all played a role in their demise. None of us can say we are not influenced by money, particularly those of us who don't have much of it.

For me the documentary evoked compassion, as it's hard to watch my fellow humans create a train wreck. The suffering was immense on all sides, primarily the innocent bystanders within the drug ravaged communities of New York, as the crack epidemic ripped through New York City during the 1980s. As Mr. Dowd suggests on the Joe Rogan Podcast, "crack turned normal people into criminals".

The pain of all involved in "The Seven Five" is palpable throughout, particularly when one of their own is shot and killed by a faction of a gang the officers had been protecting. I had the sense that this was the beginning of the end for all of them, as the death of a fellow officer by the hands of criminals they technically protected, was just too much to handle for any of them. They all are visibly upset by this officer's death in the documentary, something they will obviously be haunted by for the rest of their lives.

Perhaps the most intriguing aspect of the story was the complex and rock solid partnership between Michael Dowd and his partner Kenny Eurell. They were best friends, and trust was never an issue until the end. Mr Eurell was put into an impossible situation that I would not wish on my worst enemy. The two do not speak to this day.

"The Seven Five" is a highly relevant period piece (1980s NYC) that can help us better understand the complex role police officers play in crime riddled areas. It is naive to think that we will send young, impressionable men and women into drug and gun laden war zones after a few months at the academy and expect them to "clean the place up". The modern day American "ghetto" is a problem whose solution spans far beyond officers on the ground. It is my sincere hope that all involved in this tragic story have been able to find peace in their lives.

The documentary can be rented at Amazon here The Seven Five

Thursday, October 8, 2015

I Got to Thinking

This is my old blog, same as the new blog. This is what I do best, write about the grey area of trading, the space between your ears. I'm 46, and at some point in your life (I'm at that point), fun becomes more important than money in life. Please don't assume I'm thick with cash, because I'm not. I know what it's like to lose. 

I lost hundreds of thousands of dollars trading when I first started, I owned a furniture company that went bankrupt (That cost a cool $1,000,000), and my high paying Wall St. job was vaporized by the credit crisis of 2008. I've seen multi-millionaires lose everything, to the point where they were sleeping in bed with a wool knit hat because the house had no heat (I'm not kidding). But the most difficult thing for me always was watching people (sometimes family) do horrible things to each other over money. This is the weakest of human states, and its hard to watch. I know about loss.

Five of the 10 readers I have just stopped reading. "What the fuck dude, this guy's a loser?" Yes, unfortunately we are all losers. I remember one of the first trading books I ever read, "Trading For a Living" by Dr. Alexander Elder. He started each trading day by saying he was a loser. When I first read that, I thought the guy was a dumb ass. Now I understand.

I've written about the technical aspects of trading, but everyone knows about all that stuff. We all tweet trading's mantras and truisms into cyberspace everyday. Yes yes, I know, "X" stock is supported by its 50 day simple moving average. This happens because longer-term oriented large investors (Mutual Funds, Hedge Funds) pay attention to it...blah blah blah. 

Of course it is a base requirement that you understand what a simple moving average is, and why earnings matter before you begin to trade. Just don't expect any of it to make you money consistently. All this dark science is somewhat true, barely accurate, and very often difficult in practice. Both fundamental and technical analysis imply that trading is a precise, antiseptic, and controllable endeavor. It's not for one reason. You. Most traders are a mess. I sat on trading desks, half of which were popping Klonopin during the day.

The only way to master trading and to make money in a reasonably predictive fashion is to master yourself. I think of Jeffrey Goines played by Brad Pitt in the movie "Twelve Monkeys". Jeffrey Goines was a stuttering maniac genius whose soliloquy's went something like..."the possibilities are endless, infinite, impossible to predict, but clear patterns are there". I always think Goines must have been a trader. Markets are impossibly complex, fat-tailed, and mostly unpredictable. Humans long for simplicity, spurn unpredictability, and not knowing is extremely uncomfortable for us. 

So I'm not gonna' be that guy who says, "but if you do x, y, and z and follow these breathing excercises you will eliminate discomfort". Forget it. But I will say that awareness and acceptance help me. Remember the Yoga up even if you don't want to, be present, pay attention, and accept the outcome. I've stopped watching the markets so much, I basically know more than half of the time in what direction market will head (this does not equate to making money!). Now I spend most of my time watching me.

I think I talked about frustration over the weekend with regards to Poker, I must have sensed it coming in me. Yesterday I got frustrated, and instead of fighting I stopped. That was a smart thing to do, I highly recommend it. You always think your pissed about the losses, but what pisses me off is when the markets get to me. I mean, I lost $350 yesterday, big deal who cares. I've had days where I've lost $10,000.

And then I went to Smash Burger to murder a large burger and fries, coke, and a milk shake. A mother and her 20 or so year old son were walking into the restaurant right before me. He had a neurological disorder of some sort, or possibly traumatic brain injury. His mom was so calm, well dressed and attentive to her son, but not overly so. I almost cried as I imagined what they had both been through. My emotion was followed up with the following thought: "I am a myopic asshole with an ego that allows me to believe my trading day was difficult, and somehow mattered".

I try to find lessons in life, yesterday was one of them. I have everything anyone could possibly need in 2 lifetimes. I have been EXTREMELY lucky, and my life could have been A LOT worse than what I believe were my worst times. Perspective and balance are everything, and it took trading to teach me that. I have no right to complain about anything, and to do so is an extraordinarily selfish act on my part. If I am nothing else in this life, I should be thankful. I love my son and my wife, and trading is my day job. Remember that Dunkin Donuts commercial, "time to make the donuts".

Back to the nuthouse for now.

Friday, May 8, 2015

Pre Market Thoughts on ICLD and GEVO

1. GEVO:  In 6.91 pre mkt small (shit price right now).  5MM Float traded 41MM shares yesterday. The news was interesting in that it was a partnership with Alaska Air for Bio Fuel I think.  You can see on daily chart that above 6 the stock has room to its 11/14 high of $8.  So my long premise is to just look for setups/pullbacks in the stock today as long as stock shows relative strength above 6.  Has traded 1.3MM shares so far this am but honestly feels heavy at the moment.  I will add more toward 6 after the open but if I don't get a good solid bounce higher fairly quickly i'm cutting it for now.

8:51 Update just punched out 6.55 for small loss, felt very heavy so far.  Will watch now.

2. ICLD:  14MM float, no big short interest here though.  Volume not as good in this one pre mkt. PR on their cloud solution being used by auto parts distributor I believe.  In 3.80 pre and looking for 4.10.  Small position so far.  Unless I see bigger volume and/or stock can't regain 4 this becomes shortable and could look for yesterday's close 3.35.  

Thursday, May 7, 2015

Setups for May 8, 2015

1. AER:  Over 48.50

2. WUBA:  Over 79.50 or red/green

3. YOKU: Over 19.80 or red/green

4. ATVI: Long on pullback to 24.01-24.11 with .25 cents of risk

5. AIG:  Buy early p/b to 58.60-50.80 area w/ about .40 cents of risk

6. BLUE:  Buy early p/b to 148 w/ 2 points of risk

7. HUBS:  Buy 46.01 to 46.26 area with 1 point of risk

8. SUNE: Buy 27.40-27.60 area with about .50 cents of risk.  Red to green as well.

9. MCIG: Tons of volume today after best qtr. in history yesterday.  Buy .085 to .095 early or red/green.

10. FEYE:  Still weak will look for green/red and or weakness below 41 area.  Above 41 leave it alone.

On Obsession and Boogie Men

My son is 6, he doesn't want to leave our side lately.  Don't get me wrong, he's a fun kid who cares about 1 thing...entertaining himself.  But, at school they are teaching them what to do in the case of an emergency (i.e. school intruders/shooting).  That did it for him, he finally realized the world is dangerous.  

I grew up with my head under a desk with the specter of a Soviet Nuclear Missile landing in my living room.  He now fears armed men in black outfits breaking into his school.  My villain was far off, across oceans, on foreign soil.  His lurks around the corner, just outside the schoolyard.  

The cold war ended, the Soviets were a paper tiger of sorts.  We all got tired of MAD and our Super Power cock fight that went on for 45 years.  Gun ownership by household continues to decline in America.  My son's generation will accelerate that phenomena.  Heck, they are the ones being targeted and adults are having trouble doing much about it.  All generations tire of threats, real or perceived, and eventually take action.

Obsession is never a good thing, but it's what we do.  In the United States we obsess about love, sex, drugs, politics, accomplishment, and stocks.  Steve Martin once observed being obsessed with someone in a relationship, and how it was, in a way, very unhealthy to think about 1 person 24/7. But we all do it.  Like love, if you are obsessed with trading you will probably lose everything.

I walked past a rock this morning, and just kept walking.  But then I stopped, walked backwards, and picked up the rock.  I remembered my son's rock collection, and this one looked particularly interesting.  So here it is next to my oranges, on my wooden kitchen table.  The wood is real too, my wife designed the table and had it hand made in Indonesia.

I walked another half mile to my house, juggling the rock in my right hand.  I observed it, felt it, and wondered about it.  I thought, my God this feels better than a new Iphone.  It was like touching a naked woman after being alone on a deserted island for a year.  Life can be ascetic here in the land of milk and honey.  The Smart Phones are perfect, the lawns are perfect, and the houses are perfect.

That rock was nothing.  Imperfect, stranded, left alone on a busy road.  Yet it will outlast the lawns, the houses, and the Iphones.  Guarantee it.

Tuesday, May 5, 2015

The Presumption of Things

I'm about to buy GPRO at an average price of 48.73.  Factually speaking the daily 8 SMA is at 48.60 and S2 today is 48.82.  And now the guessing.  I am presuming that there are smart buyers in the world that pay attention to these things and dumb sellers in the world who don't.  That's life, right? C'est La Vie, may the best man win.  

But wait, how do I know I'm not the dummy?  After all I am taking these man made technical creations and applying them to my craft all the while assuming they work.  GPRO is in a confirmed downtrend in all time frames but the daily which is bullish (above 50 day, earnings gap).  So yes, there is a chance that I am the dummy.  However, if I get a little creative with things maybe I can be the dumb guy less than half the time.

So what else is up my sleeve?  Nothing fancy.  Earnings were good and confirmed by price action and volume that day.  Additionally, selling volume is diminishing on the daily chart in the last 4 days. Against my favor is a weakening market right now. That's it.  If I'm wrong I lose 2R, if I'm right I make 4R+.  We shall see.

Monday, May 4, 2015

Pre Market Thoughts and Playing Defense

Wow, Isn't AAPL tired?  I'm tired, and SPY must be tired after running up a hill for 2 days from just under 208 after its late Thursday afternoon death defying plunge.  Narrow range day?  I think so.  I'll call 210.50 important today, my line in the sand.  Below 210.50 is round #210 and then 60M 10/20 SMAs just underneath there.

On Friday AAPL retraced half of last week's 3 day plunge.  You know what that means?  $135 is likely, just not today.  I'll look for shorts up near 131 and longs from just under 129, as a narrow range day is likely for AAPL as well.

Walking yesterday I was thinking this game is all about defense, and playing defense is hard.   Defense is pro-active and takes more energy.  This is partly why we avoid it. The reality is that good defense is probably required 3 out of the 5 days in a trading week.  On the days when your winning, its easy because there is not much to do but sit there like a catcher and catch all your profits.  But hey, only having to work 3 days a week isn't such a bad thing.

All the best today.