Thoughts after the Dow -360 Day

Only four stocks on the watchlist finished green for the day:
SKF, RIMM, ATLS, and PAAS.

SKF up 7% after that low volume pullback. Closed just under $100 today.

ATLS is a natural gas utility that reflects the casy mentality. I've traded it several times and it hasn't done much recently compared to its other four letter brethren, but showing up tonight on the list, has me thinking maybe.

PAAS seems to be the favored pick of the silver crowd although that down move in the SLV is a bit disconcerting. Maybe it's just me not following this stock as well as others in the sector.

Tonight's lesson in humility is when to take a loss. And the obvious answer is when the trade does not go as you predict. As we saw, I had a 50/50 shot at picking the right trade. Both trades moved 7% but the one I picked moved in the opposite direction. So what do we do? My notes were written before the trade was taken and it says, if the stock is not showing a profit by the close of the following business day, close out the position. I am used to the fact that the initial reaction after hours could be a fakeout or it could be a precursor for the following day; however, for the rules of this trade, I'm letting it play one business day, and prepared to jettison the position just before the close on Thursday.

Now some might argue, why not hold on to the position and wait it out? The problem with that is: it only takes one mistake in the markets to wipe out one's account or even several month's worth of gains. Once your account goes to zero, you're no longer in the game. One could get lucky, the stock turns around in the next month, and then you're thinking, see it came back. There are far more examples of where the stock doesn't come back. The reason nobody remembers them is because they are delisted. Sure the $800 to $1k loss hurts, but that's a fraction of what will happen to your confidence when you start seeing that loss morph into something that was preventable.

Despite the drop in the markets, we only gave up about 60% of yesterday's gains and judging by the reaction in FSLR afterhours, there's a good chance we're looking at a great day tomorrow in our SPWR position.