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What to Do When You Miss Out on a Trade

By Jeff Clark
Tuesday, June 3, 2008

I just can't write about stocks today. I want to, but I can't. My mind is on baseball.
 
You see, I manage my 8-year-old son's Little League team. And they had their first playoff game last Thursday.
 
Our team, the Indians, was the underdog against the Rockies. In the bottom of the final inning, we were tied 13-13. We had two outs and a runner on third base. One of my youngest and smallest players, Will, was due up at bat. Will is also one of the fastest kids on the team. So I told him, "Any ball you hit on the ground to shortstop or third base is going to score a run if you can beat the throw to first. Are you ready to do that?"
 
Will said, "Coach, I'm ready to hit a home run."
 
"All we need, Will," I replied, "is a single. A single wins the game."
 
"I know, Coach," Will said. "But I haven't hit a home run all year, and I know I can do it."
 
What could I do? "Then swing away, Will. Go get your home run."
Sure enough, on the very first pitch, Will hit the ball harder than he had all year. It sailed out of the infield and was headed over the left fielder's head. Any other time, and against any other team, that ball would have dropped and run all the way to the other field, and Will would have gotten his home run.
 
But on this day, the left fielder jumped, stretched way above his head, and somehow, miraculously, caught the ball in the webbing of the glove.
 
Will was out, and the game ended in a 13-13 tie.
 
No one seemed to care much. The parents enjoyed the game. Will hit the ball harder than he had all year. And both teams moved on to the next round.
 
But I was in a funk all weekend because we missed an opportunity for a win. "If only I insisted he hit the ball on the ground," I told my wife when she asked why I was so quiet after the game.
 
She looked at me with those eyes that every husband has seen when he's said something stupid and said, "So what do you do when you miss an opportunity for a good trade? Do you sulk? Or do you find a way to come up with another winning trade?"
 
And that's where this becomes a lesson about trading. You see, I missed a trade yesterday. After looking at hundreds of charts, I was bearish on the market. So I told S&A Short Report subscribers to buy puts on the Nasdaq 100 Index.
 
But just like the Indians missed a chance to beat the Rockies, we missed the trade.
 
The stock market gapped lower on Monday morning. And the trade I had my eye on ran away from us. We couldn't get into it at a favorable price. My first thought was, "If only I'd made the recommendation on Friday instead." But I almost never trade on Fridays. Too many unknowns can happen over a weekend. So, the opportunity slipped away from us.
  
No big deal, really. Traders miss out on thousands of opportunities during a career. So now, the real question is, what looks good to trade today?
 
We missed the opportunity to buy Nasdaq puts on Monday, but I'm still bearish on the market. I'm looking for a chance to short the Nasdaq at a good price.
 
Good investing,
 
Jeff




Market Notes
Infrastructure builder McDermott hits all-time high... up 55% in the past 12 months.
 
You can take my house... but you can't take my beer! Anheuser-Busch hits all-time high.
 
Boat companies buckle under high oil prices, tight credit... MarineMax and Brunswick hit multi-year lows.
 
Earnings today: Toll Brothers, New Frontier Media.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1221.53 +1.3% +10.1%
Oil 38.31 +1.4% -0.6%
Gold 138.07 +2.1% +16.3%
Silver 28.60 +2.4% +53.6%
US-Dollar 80.67 -0.8% +8.1%
Euro 1.32 +0.6% -12.1%
Volatility 18.01 -7.1% -19.8%
Gold Stocks 581.56 +3.0% +17.0%
10-Year Yield 3.02 +0.7% -10.7%

World ETFs
Symbol Price
Change
52-Wk
USA 122.89 +0.3% +11.3%
Canada 30.50 +0.2% +16.2%
Russia 21.94 +1.4% +18.1%
India 37.85 +0.3% +22.3%
Israel 16.69 +1.3% +10.8%
Japan 10.64 +0.6% +6.5%
Singapore 13.73 -1.1% +18.8%
Taiwan 14.78 +0.4% +19.2%
S. Korea 57.31 +1.3% +23.4%
S. Africa 71.87 +1.4% +28.2%
China 44.42 -1.4% -0.6%
Lat.America 53.17 +0.7% +8.4%

Sector ETFs
Symbol Price
Change
52-Wk
Oil Service 137.59 +1.0% +18.9%
Big Pharma 64.14 +0.0% -3.2%
Internet 72.07 -0.1% +23.4%
Semis 16.22 +1.2% +29.4%
Utilities 31.28 +0.2% +1.5%
Defense 18.52 +0.1% +10.6%
Nanotech 10.03 +0.4% +1.6%
Alt. Energy 10.08 +1.3% -3.3%
Water 18.49 +1.0% +14.5%
Insurance 16.14 +0.4% +21.1%
Biotech 20.54 -0.2% +28.1%
Retail 19.70 +0.3% +30.2%
Software 24.79 +0.8% +25.9%
Big Tech 53.87 +0.3% +22.7%
Construction 13.10 +0.9% +15.7%
Media 13.64 +0.5% +26.0%
Consumer Svcs 67.39 +0.2% +24.5%
Financials 55.04 +0.3% +7.4%
Health Care 64.30 +0.1% +2.0%
Industrials 63.54 +0.5% +21.0%
Basic Mat 74.35 +1.1% +25.3%
Real Estate 55.32 +0.1% +25.0%
Transportation 91.77 +0.7% +26.9%
Telecom 22.59 +0.5% +17.8%

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