Reality – My open shorts are being royally raped today.
Reality – My long hedges have prevented me from going ape-shit drunk in depression.
Reality – Markets are overextended but they remained so for a month between March and April of this year.
Reality – Retail Traders like me still seem in denial, which gives further room to fuel this upside.
Fantasy – On the other hand with the popcorn investor sentiment riding so high (AAII and Investor sentiment surveys), no major pullback is in sight. Really?
Fantasy – I can beat Scott Bleier.
New Trades
We had a solid rally today so far and the breadth is looking incredible. I see that the markets are over extended. However I cannot overlook the fact that this rally is showing some depth today. I am not planning to be left alone. Instead of participating in what I consider as overextended longs, I hand picked a couple of longs – JASO and ING and added them to my current longs DLTR, WYNN and LVS. As always trades were posted in Twitter.
Strategy With Old Shorts
I sold some of my shorts with losses to raise cash for the new long trades mentioned above. I am keeping couple shorts open though for two reasons – First, I need at least one or two good shorts, should the markets go down unannounced, which is their style by the way and which I believe they will. Secondly, another of my short (QQQQ) is so deep under water, it is not even funny. I will keep it open to remind myself of some lessons as they smirk at me every time I look at my portfolio.
StocksRider
LoL Great post..
Thanks WallstreetKid.
You may be proved right, I admire your pragmatism, but your capitulation, like 95% of other bears could be a sign of the top.
For my sake, I cannot wish you luck with your longs, but I do admire the move.
Not to worry you, but JPM bought 13m IWM shares at the August low, and someone sold 13m IWM shares in the closing hour today. You’ll see the vol spike on the chart.
Google it. Ah, I did it for you….
http://finance.yahoo.com/echarts?s=IWM+Interactive#chart2:symbol=iwm;range=1d;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined
I see just under 13 mil vol on the prior day aswell (Thurs). Its prolly just that, a 3-4 point pop.