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Caterpillar Inc. Message Board

  • user6244 user6244 Apr 1, 2009 6:58 PM Flag

    I almost want to scream

    Today I really screwed the pooch. (yes I am green when it comes to trading).
    A few days ago I bought 200 shares of CAT@27.70. I wake up this morning (430am) and start reading the news.. All the news points to a lower hoping screaming out that the futures had dived etc etc I check the premarket trades of CAT and sure enough it's down .53... reading more news nothing looks good g20, job losses, etc not even a single shred of news this mornig indicates that things will be neutral or possibly up..

    So what do I do as soon as the floor opens I dumped my 200 shares at 27.53 to make things even worse once I realize I have been duped I short them at 29.00... What a novice move and then what's worse is I am having difficulty separating emotion from the trade.. when diligently trying to cipher the news that only after the markets closed suggest that hmmm the news maybe wasn't so bad... I sure would like too through up there first morning report and shove it up there bum ...

    Anyway drove out too the mountainside and released a nice yell/scream... feel better now getting back just hope tomorrow that with my shorts are not found down at my ankles@29.00 and that the market doesn't open 5 dollars up in the morning...

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    • If you want to INVEST you need to choose stocks and have a longer time horizon than every day.

      Those premarket trades are usually based on a few trades of a few them no attention.

      Cat trades in big cycles, if you worry about every $1 move you will drive yourself nuts.

      Be ready for it to slide a few bucks...I do not worry about such moves because I am in it for the long haul...bach to $60 plus.

    • alphahunter Apr 1, 2009 7:20 PM Flag

      Welcome to the irrational world of short-term trading. When you've got a piece of news, has it been already widely disseminated? If not, is that relevant? If so, does it go against the technicals of the stock or does it confirm them?
      I shorted CAT after FY08, made some money, then flat, then the stock broke up and I lost marginally more than I won as I decided to close the position. I decided to let it ride up. My mistake was that the stock was clearly oversold on a weekly timeframe so once the FY08 was out and disgested, the stock had to go up.

      I believe that CAT is even more overvalued after shooting up by 20% (PE of 13 - 15x on optimistic 2010 estimates) even more so as the consensus for 09 & 10 EPS have been cut down very recently according to Yahoo). The weekly RSI does not look oversold anymore.

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