Daily Speculations
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Daily Speculations |
4-June-2006
A Daytrading Story: A Vacation, a Move and a Panic, by James Lackey and Craig Maccagno
The "vacation odyssey" was Craig's short birthday trip to Jamaica to visit his girlfriend Racquel's little home town in the countryside. He asked me if it wasn't too much trouble, could I enter a few internet orders for him while he was gone. I said ofcourse buddy, how hard could that be? Oh my goodness.......if I had only known.
I couldn't say no as Craig helped me move from West Palm Beach Fl to Ft Myers in 2002, when I was at my absolute low. That was about time when Vic bailed my out of the bucket shops. Craig is an old day trading buddy. Its alot to ask of a new friend to help load 14,000 pound of "stuff" onto two U-haul trucks. He never ever let me forget it.
From Craig Maccagno: Trade date May 12th: The day I turned thirty eleven was the day we left for Jamaica, May 11th the SP was down around 16 points and that happened to be the day when I covered my last short sale at 1321 and told LACK "now we can close 1311" (which as it turned out was a lucky guess, which I didn't realize til writing this it actually closed 1311)
Lack responded with "oh we're going to 1300 dude," and that's when I replied to LACK "you better hope we don't go 1300 cause if we do we're goin to 1250"
We both laughed and I proceeded to give him the necessary directions to scale me in light for the 12th if he got a chance. I talked to LACK that morning from the airport just before we flew out and the last thing he told me was "I'm not gonna mess around dude I'm gonna buy you a little at whatever the open price is" I say "cool then scale me into some more around 1300 if they happen to stuff if down there"
Another friend, Mr. Wolfe, is text messaging market prices to me while we're en route to Racquel's hometown in Jamaica. It's all bad.
We arrive at our destination and it's near the market closing time, a quick call to LACK, I ask "how we doin?" his response, a languid "it's a *%$#ing disaster bro"
Cut to Sunday night May 14th: We are at this little resort, which is still under construction, yet open for business. It's called The Rustic, its gorgeous, only 18 rooms, on the side of a cliff with panoramic ocean views.
The music is blaring throughout the open air bar area. It's almost time for globex open. I make a call to LACK, but no answer. I call the Wolfe. I reach him on his cell for a quote.
The Wolfe quickly replies but I can barely hear him over the music, he says "dude we opened globex 8900." My response: "It's noisy as hell here, did you say 9900?!" The Wolfe yells "EIGHTttty-NINE ", I say "oh s**t !"
I beg him to stay put until I can find a quiet place to call him right back. Earlier, we had been talking to the owner of The Rustic Resort and Racquel was currently visiting with him and some others in his office. I burst back into the office, give my quickest synopsis of what's going on to the owner and ask if he would mind if I make some calls, since it's so loud outside. He obliges and I reach the Wolfe and walk him through firing me some SNP orders.
Lucky for me the Wolfe has been in the business for a long while. I have him immediately buy 10% around 1289 and throw a sell up 5 points higher, then have him place a bunch of orders for me and tell him if anything is filled sell em 94's, I am trying to get a few four or five pointers to try to lower my AP (survival mode, in case the unthinkable happens before my arrival home)
All this on goes on in the Owners office and he looks at me after I hang up and says "what do you trade?" I reply "S&P futures" he quickly responds "Go get em Tiger." Apparently one may have been a bit overexcited while on the phone. "Oh my goodness... if I had only known "
The Wolfe now has the ball, many hours later another failed attempt to reach LACK. Time to wake the Wolfe and have him jockey a few more orders around, another miserable sleepless night with no internet access and visions of disaster running through my head.
Morning arrives, as do the text messages from the Wolfe we bought some, we sold some, and the current price, aaah what a relief!
Upon arrival to the Jamaican airport I get a hold of LACK, and from him comes, "I didn't sleep all night, I feel sick and it looks like we're gonna open around 89 or 90, LATE" He hung up on me in disgust.
About 1 pm we arrive back in West Palm Beach to log on the computer, right as the market is breaking back under 90 for a new low on the day. I buy some more scalpers, sell em back and make it out of the day alive, but still with a too a large position.
The rest of this panic story is best viewed via a chart from May 16th, it only got worse. "Oh my goodness....... if I had only known."
Lack of notes from James Lackey Monday the 15th "It's just like 1987"
When I read "just like 87" it's like reading a captured military correspondence. I am part of the militia and it is my job to raid the enemies supply lines and move in and out quickly. Monday in Globex I woke up at 3am and saw a horrific decline, a panic in the SPU and quickly reported back "its remarkable how I wake up at the GBEX highs and exact lows for no good reason."
Monday night: The flight to Nashville. My wife Jennifer had a plan, fly me to Nashville. My wife "sends me abroad" anytime real work needs to be done. She is a micro manager and it is much easier for her to move me "out of her business" As matter of fact that is the solution to any of our marital difficulties. Whenever I am "on the rag" she says "Jimmy why don't you visit your cousin in Chicago and ride motorcycles until you come back happy"
We had prepositioned a computer, an air mattress and a data feed to trade Tuesday. That consisted of a reservation at Kinko's, a few clicks from my new house. At Tuesday close I was to meet the cable guy and should be up and running by 7pm. Everything was going according to plan ,except for the lack of a plan for "a May Panic" If you planed a move to a new town, wouldn't Memorial day weekend be a smart time of the year? Oh my goodness.......if I had only known.
The market is never about "me" or "I" or "you" It is the fallacy of most vividness. You can quickly note that your worst trading performances when there are outside stresses on your life. A fight with the wife, no sex, no love, and you take the built up testosterone out on your bank balances, via the markets.
The move, the stress from the markets, a new routine after business hours really did affected my sleeping and eating patterns. There was no vigorous exercise, except for painting a room and moving a few boxes. I didn't eat right as the wife is chief of supply. An overdose on White Castles, cheap awful burgers, that we missed for 20 years since I evacuated Chicago.
I traded the week and anticipated for the arrival of my family and the moving truck over the Memorial day weekend. My wife decided to stay in Florida for an extra day, which turned out to be prescient. I didn't sleep but 4 hours a night all week long in the market "pull back to 1250." By Friday evening, I was passed out by 11pm and the movers were pounding on my door Saturday at 9am.
I rushed out the front door, with sleep in my eyes and the neighborhood was a buzz. People came out from all corners to greet me. It was very embarrassing, hadn't even brush my teeth, and had to rudely say "sorry, just woke up be back in 15 minutes"
By hour two of the move, I had a good line of communication with the crew leader. He was the laziest "B" Ive ever seen. After a 50 dollar a day kid dropped one of my boxes the crew leader said "well we will put that in the report" I said awe don't worry about it, Lets get this job done. "we must always listen to the customer" Oh yea? Well that's why my wife sends me away when we move. I tend to upset all the men that are working. My military training takes charge and everyone is offended. He said "Oh, by all means take charge"
That was it for me, I went off, "hold it hold it hold it gather around men. Okay lets take 10 minutes and plan an attack and save our selves two hours of double work. You move here, you work here, hey kid, you gotta start hustling or I am going to make fun of you all day"
The boss said "that was very nice of you to buy the kids lunch, but you see that's why I never feed them until they are done" Livid, I asked "did they eat breakfast?" he said "well Ugh I dunno" How in the world do you expect men to work a full day with out eating? Your paying that kid 50 bucks a day and how do you expect him to afford to eat?"
After a few days of vigorous labor I was ready for a good week of trading. Craig's sick market joke from May 11th, for the SNP to trade 1250, came true. I was well rested, my office was in good order and was very excited about trading the bump and grind of the markets. My goodness, the first day down Tuesday, (22.70) in the SNP 500, signaled this battle was far from over. We ended the day with another flesh wound and more sleepless nights to come.
The last day of the month was wrought with so much uncertainty, I was physically ill. I mumbled, "How in the world do you expect to work all week with out any food or sleep?" We rallied.
Tommy Ryan called and asked me what was going on. "Well I learned one thing through all of this. At least after a few weeks of heavy lifting, I am in good enough shape to be a crew leader for a moving company."
The markets do not allow traders third chances in life. The vacation, the move, and the panic refreshed my ephemerality . We are all one bad month away from being a night watchman. Worse the X-day trader that moves in the markets for a living, might literally have to move boxes for a living.
Best joke came from Andrew Moe, "just like 1987? More like SNP-1287" Oh my goodness.......if I had only known.