I have been getting played lately. I was down 3% on tuesday, up .7% yesterday, and down .3% today. Rats! I don’t like not being on the right side of the trade. I just find it difficult to be long in a downtrending market. Heck, sometimes I even find it hard to be long in an uptrending market.
But the fact remains, overall we are still in a Macro downtrend. My 401K is 80% invested long in stocks since the middle of last week, and my trading acct is 32% invested in short biased calendar positions.
Here Cramer talks about the Short-busting that is going on. The quote is excerpted from Real Money, which has been pretty good to read during this turmoil.
Ag, the biggest battleground between the shorts and the longs after the banks, is responding to the upgrades and ramping furiously.
And the Federal Reserve and Treasury are putting on a great show as A-rated bonds and Alt-A paper continue to trade up.
These are all disasters for the shorts, and that could get very ugly.
I am surprised by this move because we are overbought, and we are headed into a number tomorrow that I think will be recessionary.
I would still be a seller into this rally. But there’s so much short-busting going on right now that it feels more like the bottom in 1990 — or even 1982 — more than the continuation of what we have seen since last August when things really started to get out of hand.
Trades of the day:
Stops and adjustments:
HON – exited 1 unit of 52.5p for 1.25. I didn’t want this speculative short to go with my calendar.
OIH – stopped on 4 170p calendar spreads. I put these on light, but the OIH has too much upward mojo to be biased short. And the OIH underlying moved outside of my Breakevens.
FAST – Adjustment Short Apr 45p/exited 40p for half of my initial position. I only put this on one of my accts. I missed the second acct. The adjustment has expanded my Breakevens very nicely.
FRIDAY Update:
I was supposed to go to work today, but my daughter ate too much cheese lately. You guessed it. Dad has to stay home as my wife is out of town for another 6 days.
Crappy jobs number. But the market is flat. Grim if one actually think people loosing jobs, and growth just about flat is a significant problem for our economy. But not if you are buying this market. Frickin’ incredible. Technically we should bounce at least to 1390. But fundamentally this is a conundrum. What I find funny is that technical bears are in disbelief because of the fundies.
Sometimes I am just a goofball. I had a few trade I made a grand in two days, yet I am stressing on IWM where I am down $90. I think my Ego of being right is getting the way of good trading. The part that is pissing me off is that I am not getting filled when I put up a mid-mark price. The market makers are squeezing every last penny from the short. I know what capitulation in reverse feels like. Damn
That said I am making a few nice trades:
Adjustment
JPM – Sold Apr 45 for Apr 42.5p for half of my positions for credits between .75- .78. It widens my breakevens to 39.5 and 48.5.
POZN – Bought 2 units of May/June 10p for .15 as the price moved up to nearly 12 on the day. Breakevens at current Volatility levels are 5.50 and 25.5 for this 40 day trade. There is certainly something crazy going on, probably a expectation of a drug announcement.
IWM – covered my 70/72c short @ 1.26. Damn. Stupid little trade. lost .45 on that leg.
COF – bought 2 more units of May/June 50c for .95. The 50c is selling for 5.25 with $4 of extrinsic value.
When all was said and done I was up .2% on the day. Down 2.4% down on the week. That was the second week I have been down in the past 17 months. I don’t like it.
I close the week with 248 positive Theta points and -770 deltas going into the weekend.
I have 31% invested, and 69% cash.