Bought some SPXL on the QE3 news. SPXL is now 5% of my assets at cost basis ($91.22). I had sold the remainder of my legacy URTY position last Thursday on the OMT news out of Draghi. I still have a couple of long calls in TNA (the 10/20 expirations at $75). And as I mentioned before, UCO is 6% of my assets at cost basis ($32.99).
I am still slightly net short due to my long positions in TZA, TVIX and UVXY.
As I had mentioned in previous posts, Tony Caldaro made a pretty compelling argument that every $20B in QE results in a 1% gain in $SPX. I did some research myself and found that QE2 showed that every $10B in QE results in a 1% gain in $WTIC. So now with an open-ended QE3 at $40B per month we should expect to see a 2% gain each month in $SPX and a 4% gain each month in $WTIC. Or a 6% gain each month in SPXL and an 8% gain each month in UCO. Assuming QE3 remains in effect for 12 months we should see $SPX over 1,800 and $WTIC over $150 a year from now. $150 $WTIC should put gasoline prices over $7 per gallon in the US. The Bearded Clam is truly a maniac.
