Masteroftheuniverse’s Weblog

Today was golden.  Sugar went up, my spreads worked, and I had the nicest Sep S&P daytrade.  I was watching the S&P trade this morning at near the lows when I had a gut feeling to buy some contracts.  My indicator was the oil weakness, and something else,  and I bought the contracts near today’s low.  I sold the contracts when I had a full ten point profit.  Cha-Ching.

It’s days like today when I have 100% clarity, and a minimalist sense, that make me love trading so much.  My trading buddy who’s a backseat driver chided me for selling too soon.  Oh well, I took a nice profit in a few hours, and that’s what counts.  I’d like to see the S&P cross 1300, and see what kind of move we’ll get out of it from there. It will probably cross 1300, but could just as easily go to 1250 or lower.  I busted on my buddy’s balls because he always critiques my trades when he asks what I’m doing. I never fail to note to him that a big trade for him would be trading 5 contracts, and  the fact that I haven’t done a 5 contract trade in anything since 1982.  Oh well, I still love the guy and he is an OK trader……just afraid to put on size.

I’ve got a busy rest of the week, as far as trading goes.  I think the psychology of the herd is changing, as evidenced by the oil and equities.  So far, this commodities blow-off has made me a lot of money with my grain spreads, and options I have on.  I’m waiting to see whaen the grains decide to put in a bottom, as there will be a buying opportunity in the future.  There’s nothing better than being long the entire grain complex near the bottom and catching the big swing.  Of course, it might take me 10 tries to catch the bottom, but that’s part of the risk.

I’ve been helping a kid learn to trade, sort of an apprentice.  I’ve written about him before.  He’s a recent college graduate, and doesn’t have a clue, or any money.  I’ve set him up a small account, funded it, and am working a percentage deal.  He’s been trading right next to me, and is also useful as an assistant when I need coffee, tea, or sandwiches.  I was worrked that John might object to me working with this kid, but he’s cool with that.  I told him that he needs to not trade by himself while we’re on vacation, and if he does, to follow the rules I gave him….exactly.  This is a kind of character test, as I’m interested in seeing if he can follow direction. 

So far, so good.  He managed to piggyback my S&P trade with a mini contract trade and made money today.  He’s not interested in the grains, and abhors spreading(which is something I need to cure). He also want’s to gamble, and take profits too quickly. He seems to take direction well, doesn’t have too many delusions, and is pretty smart.  He’s not a rocket scientist, but has been doing all the homework I’ve given him.  I make him read books such as “Reminiscences,”  books by Victor Niederhoffer, Schwager’s ”Market Wizards,” ”Options as a strategic Investment,” and all my old JW Wiley reprints from the days gone by.   He’s finding out that there’s more to trading than sitting at a screen pushing hot buttons.  I look at him like I’m a sculptor and he’s a piece of wet clay.  Whether it will work out remains to be seen, but I’d give him a 50% chance of succeeding….which isn’t too bad when you think of it.

I tell him that he doesn’t know how lucky he is.

Tonight brings more work on my book, some classical music, some Martell Cognac, and some late night reading.

Jeff