I sold all my DIA puts and IBB puts today. Yes, I may gain if market pull back, but I don't want to be killed if the market marches on.
- Today we have good economic data, and market failed to rally, as it usually does the last 4 weeks. It's up a little.
- We have job number tomorrow, plus the S&P 500 is approaching its all time high of 1527 set in 2000. I expect it will get there.
- By this rate, the Dow will cross 14000 before end of May. I don't believe this is a healthy market to be in now. But the question is when it will pull back.
- Back in 1999, we know the market was crazy, and then in Jan.2000, people who shorted the market got killed. it's not until March.2000, then market started to crash. And I truly believe this market will correct this time, just don't know when. Maybe a few days away, maybe a few months away.
- I reduced the puts so that have cash. And I was totally wrong to commit too large positions on the short side.
- I'll reset and start over; I'll be patient on entry, be quick on cutting loss and taking profit as well. Unless the market is finally turned, now is not a good time to be smart to pick an exact top.
- Keep an open mind, I said this before, why fix on one thought only, if I'm not feeling comfortable to join the crowd, I can be on the sideline.
- I will add to puts again, but only when I truly think it's another extreme case, otherwise, just wait, I have enough puts already.
2 comments:
The key thing going forward for a short, is to keep a very close watch on company specific earnings. Once they start to miss substantially, then its game time.
Another thing to watch is the volume on key indicators like SMH, XLK, QQQQ for the Nasdaq related stocks. Yes they are hitting higher highs but it's on lighter volume. Once the volume drops off (cut in half) it's time to consider shorting the market. I believe we are almost there. DOW 14,000 in May? I'd be shocked. But like you, I'm surprised we haven't had a pull back yet.
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