Bond and Crude Oil volatility

This Position was up over 2k this morning, then ZF grew stronger and ZB hit resistance. The small gain in ER2 turned into a loss. This position was put on 2 days ago. Interesting to note the Yield spread in correlation with the performance of stock index sectors.



ES selling off


Crude Oil selling off on T Boone Pickens comments?


Afternoon strength in the 2yr bonds (ZF)


10yr Swap futures bouncing off lows


Trading the TUT Spread: Capitalizing on Changes in Yield Curve

Yield Curve Steepening Means No Recession?

The Yield Curve as a Predictor of a US Recession

Feb 20 Crude over $101

The run up in Crude Oil came unexpected, as many momentum rallies do. Now that Crude Oil is hitting all time highs we are hearing as many reports (good and bad) that fuel the attention and momentum to this move.



ES makes a surprise move up intraday before the FOMC minutes are released.
The stock indices are consolidating into a bear wedge pattern.




It seems to me that the bond traders already knew of the potential quick rate increases the FED was thinking of in the future. The FED said they were planning on cutting rates, and the emergency cut on Jan 22nd wasn't done to save the stock market. I think that's BS.

Feb 19 Choppy Light Volume Trading

Scalping index futures is difficult on light volume choppy trading days like today.



Crude oil and the Oil related stock sector have been making big gains.



Gold seems to be stuck in a trading range.


Since DT and iBankcoin came out bashing Dennis Kneale, CNBC have been airing him more than ever. Perhaps even bad PR is good PR.

What if the market doesn't retest the lows?
Think of all the PUTS that were bought last month. It would be a shame for all those traders to see there PUTS expire worthless from seeing the market Chop around for the next month or two.

I was thinking about the terrible storm China experienced last month and the correlation that this natural disaster has on the stock market. One article I found looked at Hurricanes the US experienced with the corresponding price action in the stock market afterwards. Check out
How Is the Stock Market Affected by Natural Disasters? (by D.R.Barton Jr.)

Trading Strengths

A Good post from Dr. Steenbarger Trading Logic and Trading Edge: Accuracy, Execution, and Position Sizing

I would say my greatest strength is picking trades correctly in the short term and my biggest weakness is position sizing.

Since the Fed cut interest rates on Jan 22, the market has been going sideways and things have been choppy. Hopefully next week we can get some direction.

It's interesting to note the trend in bond futures. The spread on the 2 and 30 yr bond was widening quite a bit, but there was some narrowing of that spread today, with the 30 yr bond moving up a little.

ZB vs ZF (30yr vs 2yr)


30yr bond ZB


2yr note ZF


30yr Bond

Feb 15 OPEX Friday

OPEX Friday's can be real choppy as they were today.

Feb 14th

I expect a small gap lower and a retrace up to 713. tomorrow. Tomorrow is OPEX Friday. Normally a choppy trading day.



ES has hit support and is crawling up but ER2 pops lower taking out stops before following the trend on ES. in the after hours.

Dow up over 200pts

The market is not going any lower. I sold the low on January 22nd and we haven't looked back since. The bear market lasted for 2 months and we are now headed back to new highs!
14,000 on the DOW here we come!
Due to cutting of interest rates and a great economic stimulus plan, the economy will be stronger than ever in no time. This is also an election year, so you know the market has a bullish bias. Add in the Buffet backing of bond insurers and you could say goldilocks is looking great.
Also, all those people that invested in gold as a safe haven are going to make out like bandits in the next 2 months.

Visit Dinosaur Trader and Mr. White Folks. These two guys are awesome friends of mine and are well worth your time for all the great content they consistently provide.

Also visit TraderFeed and read all of the articles because it will surely make you a better trader from all the great trader psychology stuff.

I've got pneumonia and I suck at trading.
Have a great day!

Feelings on the video

Edit- I won't be putting the video back up. I've also declined Break.com's offer to pay me for the video.

I'm sure some people are mad to see the notorious trading blowup video gone.
I took it down a few weeks ago because it makes me feel depressed and makes me feel like a loser. At first it was kind of funny, but now it's painful to watch. It's like a mistake you wish never happened, but in the back of your mind it is there ready to jump up and remind you of who you are and what you've done. There's no going back and changing the past. What's done is done.

Someone suggested I make a video of me making money, which is something people would like to see. Kind of like a real life story of a guy who lost it all and came back fighting to become very successful through hard work.(ie Chris Gardner). Easier said than done. My plans right now are to get a better job while continuing to work on improving my trading.

Broadcasting my trading performance on this blog may have been detrimental to my trading performance as it has been somewhat serving to the ego.(ie never wanting to post a negative day on the blog to show the people how good of a trader I was, like the SocGen trader who wanted to be a star and ended up making a huge mistake). Perhaps this is something to think about if you are contemplating posting your performance publicly on a blog or you already are posting your performance and having negative results.

Stock Trader Tax

Here's some links that may help you if your doing taxes.

Capital loss carryover education

Capital Loss carry over

Schedule D instructions

Addicted to Trading

Death of a game addict

Read the article. Substitute the word EverQuest with Trading.

Addicted to Sex and Money

A professor of neuroscience and psychology from Stanford University, Brian Knutson, made a startling discovery: our brains lust after money with the same neurons they crave sex. Moreover, these are the same neurons with which one experiences the high from cocaine.

Knutson used a fMRI test, that can detect which areas in the brain are used when a certain task is being performed, on student volunteers while they were executing mock stock-and-bond trades. What happened in the brain? Blood was rushing to the brain's pleasure centre indicating a higher activity
in this region.

What is a realistic % yearly gain for a day trader?

The results are in and the highest number of votes went to day traders should make 100+% returns on there account every year, however, as Bill posted in the comments, the majority of voters, 66%, voted for less than 100%. More than half the votes, or 54%, voted for 25% or less. That assumes of course that beating the S&P 500 means a typical return of 25% or less.
Thanks Bill

Gold vs. XLF

I noticed an interesting correlation. A lot of people look to gold as a safe haven during an economic decline and are staying away from financial stocks from the huge losses they keep turning up each quarter due to the subprime mess. The question is, will this inverse pair correct back, and is the reversal starting right now? (ie. Sell gold, buy US financial stocks, & US dollar value increases)
Or is this just financial stock short covering, and a short term pullback in gold?

Bush unveils $3.1 trillion spending plan ( By MARTIN CRUTSINGER, AP Economics Writer)

"The president proposes more of the same failed policies he has embraced throughout his time in office — more deficit-financed war spending, more deficit-financed tax cuts tilted to benefit the wealthiest and more borrowing from foreign nations like China and Japan," said Senate Budget Committee Chairman Kent Conrad, D-N.D.

OPEX and the Suprise interest rates

Are we still in a bear market?
Are Financials a buy?
What happened to our favorite words: Recession, Subprime, Capitulation?

Lets analyze a couple things.
Last summer, the market was going nuts over SUBPRIME, and then on OPEX day, SURPRISE interest rate cut, and the market is saved and rallies to new highs.

January, the market is going nuts over Recession, SUPRISE interest rate cut the day after OPEX, and the market is saved and rallies 1000pts in 2 weeks.

I notice that Mr. Stock Market and Bernanke conveniently have these SURPRISE interest rate cuts within a day of OPEX.

Is this a Coincidence or is there a reason to all this madness?