As you know from prior posts, I was expecting the markets to continue with their upward momentum. But I was also a believer of an eventual pause soon. So over the course of last few days, I placed more longs without getting rid of my shorts. That strategy worked out perfectly well as it provided a balance to the losses in my shorts position.
Just after the FOMC announcement, in the rising tide of the market’s initial and historically famous “false” movement, I scaled out of my SPY and SSO long calls at 109% and 22% profits respectively. Also scaled out of my longer term DBA call position for 73% profit as I felt it had reached overbought situation. I tweeted my trades in real time as s0on as they were placed and had pre-announced my intentions in the c0mments section of my prior post the day before.
Where am I standing now?
I have my shorts in QQQQ and CRM still open. Couple of longs such as WYNN and DLTR are still open. I still believe the market is due for a breather and the time seems ripe now. I am going to study today and tomorrow to find out if the drop is huge or if it is just a pause before continued upward momentum that some of the IBC bloggers are claiming it to be. If it is the latter, I will scale out of my shorts at a smaller gain than I had hoped for in the next couple of days. Either ways, I find it hard to believe for the markets to continue full steam ahead without a break. I am going to let the markets do the talking while I do the listening.
Good luck.
StocksRider
Great work like always. Love reading your blog.
Thanks LDSH, fucking impressive nick!
Great job and congrats on your profits.
Thanks Bro!
Nice. Sir we were paid yesterday and today, to be sure. I am also of the belief there is more upside left as no one wants to be heavily long here. Several indexes have yet to break their ranges and although some will likely not do so on this run, some more probably will, I think, as, again, going short right at the top would be too easy. I was looking for buying opps if price pulled back to about half of yesterday’s candle, which was the case in $SPY & $RIFIN but added nothing to the pieces of longs I have left, as I can’t help but be a little scared up here too… Maybe I need to grow a pair and buy some semi’s and finnies or something. Just daytraded $DRN some today successfully: http://twitter.com/bushmantrades
In the bigger picture, I liken ’09 and ’10 to ’75. (based on price action) The recovery in ’75 stalled near the declining 1000 day MA, pulling back to a similar depth as this ’10 pullback before chopping a bunch but finally blasting thru the 1000 day in ’76 on its way to test pre-recession highs. Could that scenario be unfolding again? Maybe, who expects $INDU 11,700 or 13k anytime soon? I’m open to the possibility. Make no mistake, 9k is in the future but we might not get there for another year or two. I remain open minded and will continue to make very short term trades until I can’t help myself anymore.(11,700 or 9k I will look for a substantial reversal)
Bushman, interesting observation on 75 and 76. I am gonna look more into it. At first glance it did dip into the summer and rallied into October. But also noticed a few differences. It started the year with upside momentum while 2010 did not. It was not a mid term election year while 2010 is.
Having said that, your bullish theory still might have some teeth from a historical perspective – studies show that for the 12 midterm election years since 1962, SPX has on average risen 2.4% in the two months prior to the election and gained 7.5% in the three months following. The only post-election downer was 2002, when we had republicans in white house, senate and house.
Well done SR!
Thanks RC
Doubled down on my WYNN long with another casino – LVS long – posted earlier on Twitter. Also bought SPY shorts posted earlier. I went from 50% cash to 30% cash. Still have some powder dry. Did not scale out of any of the shorts yet and waiting for some more time.
i may disagree with your methods and abhor your style, but i must say you’ve been on fucking fire and you deserve everyone’s praise. congratulations
Thanks Turd. You are not gonna do some gay shit on me now, are you?
I don’t know if readers been following me on twitter (www.twitter.com/stocksrider), I made several transactions in the last few days. Suffered major losses on some open short positions. Closed some of them and used the cash to buy longs. In spite of a really strong day today with incredible breadth, the markets do look overextended. However I am not planning to be left out. Instead of buying the overextended names I have handpicked a couple of stocks I have went long in – ING and JASO. Let’s see what happens.