Trader's Corner

[Slug]

XNPT drops below 8. Reading back, I should've sold some puts last week... Still don't see a bottom yet.

Thanks for the detail on your analysis. Med school background certainly aids your DD.

[Mr Nice Guy]

No prob... I think fundamental analysis does have a very important role in stock trading, but it is not the end-all, be-all of the trading game.

g

I have heard it stated, "Buy on fundamentals and technicals; sell on technicals"

[Slug]

Trying to sell some XNPT 8 puts for May. No takers. Will try again tomorrow. I think it's near the bottom.

[gambler2075]

Higher level bio knowledge certainly makes it alot easier to see when the analysts are BS'ing people, but I think even better than that was working in the field of receptors/signal transduction for 4 years after college... Little did I know that that knowledge of pharmacology, receptor/ligand binding, and experience reading and keeping up with the literature, would come in very handy when it came to understanding what these biopharma companies are doing.

XNPT I can't believe is down as low as it is... every day I sit back and shake my head.

g

[KTP]

Any idea what is up with Avanir today? up almost 10% on no news...

On the plus side, the 10,000 option Jan 2012 $2.50 contracts I bought for $1.20 when the stock was ~$3.75 are now selling for $1.70. It is the weirdest pricing of options I have ever seen...they are selling for near or below cost ($3.75 - $2.50 = $1.25). The only reason I didn't buy more than 10,000 is because this was just too strange.

Now to figure out what is going on with the stock so I know when to sell!

[Slug]

Seems a little overblown on Avanir. My risk tolerance is low on options so I'd be taking some profits here. However, the frenzy could continue.

.02

[Slug]

Hope you got out when I said KTP.

[gambler2075]

Seems a little overblown on Avanir. My risk tolerance is low on options so I'd be taking some profits here. However, the frenzy could continue.

.02

AVNR is totally controlled by the shorts... I have tried trading it before and it just doesn't trade like a normal stock. Had to take profits quick.

Should have shorted TZOO at 102 yesterday and SLV at 47, like I was saying... darn it!!! Of course a lot of people tried jumping into silver and got burned already... hehe...

Shoulda woulda coulda...

g

[Mr Nice Guy]

I want to ask you guys a question I have been thinking about....

How much, if any, do you pay attention to the market "noise," i.e. news, talk shows, etc.

One part of me thinks it prudent to stay informed on trends and news, but another part of me says to block it all out, and focus on companies on a more micro level.

If you do stay current on news, whats the benefit for you? And if not, what is your reasoning?

[gambler2075]

I want to ask you guys a question I have been thinking about....

How much, if any, do you pay attention to the market "noise," i.e. news, talk shows, etc.

One part of me thinks it prudent to stay informed on trends and news, but another part of me says to block it all out, and focus on companies on a more micro level.

If you do stay current on news, whats the benefit for you? And if not, what is your reasoning?

It depends by what you mean about market "noise". If you are talking about CNBC in general, or Cramer, or all of those mass media publications, I don't really care what they are talking about from day to day, unless it is specifically about about the company that I am invested in.

Of course, if they mention something specifically about the company that I am interested in, I will know basically immediately by seeing the reaction in the price, up, or down.

I will say that the only reason that I care about the overall market sentiment would be when the market is at extremely oversold or overbought conditions, and then I pay attention to what the masses are thinking, but only as a contrarian, to see when the bottom or top is in. Remember that I am not really trying to time sentiment changes in the overall market, because I am not exposed to it via mutual funds or whatever, I am just in individual stocks. If I had some broader mutual fund exposure, or through SPY or something like that, then I might care, but IMO, other than general sentiment, I think it is basically impossible for the vast majority of people (including myself) to time the overall markets precisely. I think there are some people that can do it, but they are very rare. I do feel, however, that I can time individual stocks, to some degree, and that, coupled with doing more DD that the vast majority of investors, gives me an advantage.

Back in March 2009 I did look at the sentiment and see how negative it was, when the DOW was around 6700... at that point, I was looking at the AAII bearishness/bullishness sentiment indicator and saw that the bearishness level was the highest it had been in a long time, 70%. At that point, I also was hearing about people talking about the end of society, and buying guns, and building survival shelters, and I knew that the bottom was close, i.e. there was such mass panic that sentiment could not get more negative.

As a tip, when you see the gun makers start to take off (I remember seeing the prices of gun-making stocks like SWHC and RGR absolutely take off in early march) then you know the bottom is almost there.

Here's an article from 2 days before THE BOTTOM (Mar 9, 2009)

Gun Stocks: Shooting Up - Seeking Alpha

At that point I knew the bottom was almost in, and called it on my stock messageboard, and bought FAS, but did not have the patience to hold it for more than a 30% profit in 3 days. Since then, I have learned alot from Livermore and realize that the big money is not made in the little fluctuations, it is made from sizing up the main trend, whether it is in an individual stock, or the market, and holding until that main movement comes to an end.

Anyway, back to your original question, and I would answer it that for the vast majority of the time, I don't really care what the overall market does, except at extremes (and at the bullishness extreme, you will start to see the speculative bios absolutely take off as euphoria sweeps the markets), but I do follow the overall market just out of interest. I have found through many years of trading that it is better that I come up with a biotech stock that I think the masses are overly beating down, for irrational reasons, or because they don't understand the issues facing a company, and just hold that until that knowledge deficiency of the masses is cured.

g

[gambler2075]

AVNR is totally controlled by the shorts... I have tried trading it before and it just doesn't trade like a normal stock. Had to take profits quick.

Should have shorted TZOO at 102 yesterday and SLV at 47, like I was saying... darn it!!! Of course a lot of people tried jumping into silver and got burned already... hehe...

Shoulda woulda coulda...

g

I don't know why I bother intra-day trading... yesterday I made 1200$ by buying 35,000 shares of VXX at 23.54 and selling at 23.58, but I should have held it to 24... Other days I typically lose 2,000$ to 5,000$ by trying my daytrades. I think in aggregate this month I am negative for all of my daytrades, yet I still have a little gambling addiction there. Yesterday's win was atypical.

g

[KTP]

I did play around with your AFFY again recently. I bought it at 5.85 a few days after the offering and sold it yesterday for 6.60 (only to see it go higher). I might dip in again if it ever drops back down to the 5.90 offering price.

I didn't sell the AVNR options yet, even though the stock dropped back a little from the 4.40s. They are still quite in the money and I would really like to see a triple on this one.

[gambler2075]

I did play around with your AFFY again recently. I bought it at 5.85 a few days after the offering and sold it yesterday for 6.60 (only to see it go higher). I might dip in again if it ever drops back down to the 5.90 offering price.

I didn't sell the AVNR options yet, even though the stock dropped back a little from the 4.40s. They are still quite in the money and I would really like to see a triple on this one.

Nice! I think a quick 10% is nothing to sneeze at. AFFY sure is very reliable at making these quick 50c to 1$ moves... then giving it all back. I'll be watching more closely next time.

AVNR did seem like a quick little move designed to entice the shorts into covering. But as I said before, AVNR is a stock that is controlled by the huge short interest, so any rallies seem to be snuffed out pretty quick. We'll see..

I think I missed my chance to short SLV... I doubt it gets back to 47 again, but if it does, I'll be ready this time.

g

[Slug]

I'm still sitting on AFFY. I'm trying to sell some May calls at 7 with a hope of getting called.

I really don't watch TV, though I am watching Bernanke now on CNN.com. So, I really don't care what the pundits say.

I've been moving further into cash in order to make some speculative buys in anticipation of ASCO movement. Any good oncology picks under $300M?

[KTP]

I'm still sitting on AFFY. I'm trying to sell some May calls at 7 with a hope of getting called.

I really don't watch TV, though I am watching Bernanke now on CNN.com. So, I really don't care what the pundits say.

I've been moving further into cash in order to make some speculative buys in anticipation of ASCO movement. Any good oncology picks under $300M?

As far as biotechs go, I wish gambler would have mentioned we could have doubled or quadrupled our money in GENE today.