Thursday, March 19, 2009

anatomy of a meltdown

well i've done it again...gone from a Hero to a Zero !!!

here's how the meltdown happened. last week the much anticipated, at least by me, rally finally came. we made handsome profits on our BNI longs. we left a bunch on the table, because frankly i just don't follow trends too well. i jump around too much. also, because a lot of this rally is gov. meddling driven, not just fundamentals, and as such i really think it's getting to be over blown. anyhoo...

so on the first day of the rally, i went short GS. bad move. should have sold it the next day. didn't. shorted some more. should have sold that. didn't. end of the day i have a massive position in GS. looking at the charts it's looking bad. financials are rallying. i had some few chances to sell. take the hit, my head said. i couldn't pull the plug. net equity went from 38K to 32K to 26K...last chance, day trader status going underwater...didn't do it. it was horrible. my net equity went down to 18, then to 12K. i was so depressed. the weekend was one big bloodbath of drinking.

on monday i came to my senses. GS was supposed to report earnings on Tuesday. i thought they would be good. if good, i would have no money left, these puts would go to near zero. i'm not taking any chances. better to have something, rather than nothing. luckily, GS started going down Monday and i saw that it would continue going down for the rest of the day. i sold all of them around 4. not a bad sell...i was worried about any last minute jump ups.

the aftermath, they didn't report earnings. don't know why. no news on that. they went down just a little bit more the next day in the morning and then a massive reversal. i sold on monday and since then they have broken 100 conclusively. my puts would have been worthless. thank you GOD>, u saved my worthless ass.

PHEW !!!

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