Thoughts on CSCO and AAPL, and an idea on TDW from Dave Landry (12 Aug 2006)
Keeping a close eye on CSCO these first days after the Big Gap. Looks like a nice little pullback so far. Watch for the break, grasshoppa, watch for the break. The NDX won’t be soaring with Cisco sinking like a lead weight (vs. a lead balloon), and it won’t fall too far if Cisco breaks out and is raging upwards.
As for Apple, let us bow our heads and pray that our friends who were long had a nice trailing stop (and we all do, don’t we?), and they got stopped out here, here, here, here OR here:
On a brighter note- Dave Landry, brilliant trader, selfless educator, fine gentleman, fellow Loosiana boy, and self-proclaimed “Trend-Following Moron” (from an idiotic email he once received), has highlighted Tidewater (TDW) as one of the few potential bright spots in the current market:
A trade of the break of the 8/1 high (49.76) with the 8/4 low (47.08) as an initial stop would give a risk of 2.68. I determine my position size solely based on the risk of a particular trade, so if I traded this, I wouldn’t be taking a very large position. 100 shares would give a risk of $268, for instance.
One of the great milestones in my trading history was my learning to think of each trade in terms of how much I was comfortable losing, versus how much I hoped to make.
If only I’d learned that back when I was trading options with a $2000 account, thinking the low price of the option justified my taking positions which, in hindsight, carried far too much risk.
But, as always, the market is there, waiting patiently to teach you these lessons, gently if you’re open to them, or like sticking your hand in a meat grinder if your ego thinks it knows better.