Trade like a calf roper (and taking profits on the Dell trade)
Good morning and welcome back to the rodeo, where you have to hang on for more than 8 seconds.
The markets are down a little bit to start the day. Let’s see what the mainstream media is blaming it on today:
Stocks Fall on Global Manufacturing Data
Ah, that ol “Global Manufacturing Data” daily catalyst. Let’s find another reason the mainstream media is blaming the fact that millions of people trading thousands of stocks for 0.41% less today than they were a few hours ago on:
Stocks Edge Lower as EU Concerns Weigh
Ah, doesn’t that explain the action in all those stocks out there today? EU Concerns.
No, it doesn’t. The point of all this is to remind you not to get bogged down in what the broader markets are doing on a daily basis and especially to ignore whatever the mainstream media reporters are using to explain away that daily action. I have hundreds of colleagues who are “business reporters”, and only a handful have ever actually traded a stock for themselves, much less professionally, much less worked at a brokerage in this past…and that matters when it comes to trying to explain why 500 stocks worth tens of trillions of dollars in total market cap doing tens of trillions of dollars in sales and which make up the S&P 500 index are being traded at a tiny fraction of one percent less than they were yesterday.
All that said, I’d mentioned last week that I didn’t like seeing the Nasdaq lagging the broader indexes in recent days because the Nasdaq had been the leader since the lows of 2008 and also since the lows of last autumn. It’s lagging again today. Just something to keep on our radar as the mainstream media has the rest of the world looking at “Global Manufacturing Data” and “EU Concerns”.
Now let’s hit on the Dell Earnings Trade we did yesterday. Dell did indeed disappoint the Street with their earnings report and the guidance therein last night. The stock’s down more than a dollar today and those puts we bought yesterday for 60 cents are now going or $1.05. I’m taking the profits and moving on. A mentor of mine used to always say, “A trade is a trade is a trade.” Another mentor of mine also used to say, “Never let a trade become an investment.” This was a trade on earnings from Dell and that trade has now played out. I’m locking in the 60% plus overnight gain and taking my rope home with me.
Trader’s thought of the day: How many times do you think this guy practiced simply roping a standing target over the his lifetime to get this good? How many calves has he roped in his life to get this good? You need to practice your trading and investing and keep learning these fundamentals with us here at TradingWithCody.com to become a pro with your money.
Stran Smith ties a calf during the defunct 2001 ProRodeo Tour Finale in Dallas, TX. Cody also tied his calf in 6.7 seconds before this run. At the time, they both tied the PRCA tie-down roping record for fastest calf roping time.
Stay focused out there today and don’t forget to meet me at this week’s chat at http://tradingwithcody.com/chat today at 2pm EST.
