Today is a great day for me, since most of my positions are puts and ultra short ETFs. The only thing bad is I sold my June puts one day early, otherwise it's a great profit instead of loss.
- The lesson I learned today is to stick to your gun at the end.
- When I'm fully in shorts and puts early April, and market went up, I should cut loss. I didn't.
- And in May, when I finally reduced shorts and added longs (ONXX,EMU,URZ,LVS), I really lost twice. Only EMU and a portion of ONXX were profitable. Others were losers.
- And the QID, DXD and TWM I sold in May are all coming back to life after three down days!
- This tells me what the bulls can do, they forced you to doubt yourself, to change, and then when it finally comes, I'm in the wrong footing again.
- I didn't 100% switch to long, actually, I did a decent job to continue to hold a big size of the ultra short ETFs and puts. I gave me credit for that.
- But because I tried to play two sides of the game, it confuses me and significantly reduce the chance of making money.
- I'm not out of the wood yet. The market may bounce back hard, maybe tomorrow, maybe next week. The buying of dips is still the game until it's totally broken. We're not there yet.
- So now is still a time to be careful and sell short ETFs and puts if the market down sharply again.
- And we may have a black Monday coming, depends on worldwide situation, the 5% yield may do more harm to dollar than good. Because all world economies are overheated and rising rate is here to stay for a while, and Feb may need to keep the rate unchanged to save housing market, so this will force US yield to go higher to compete with other countries, this will form a cycle to bring down the US market.
- Monday is usually the day people figure thing out. And June 11th maybe the black Monday of this decade. But again, I called a black Monday a while back in this blog, looks stupid. Just because the market was off doesn't mean the end of the world. Until the liquidity is out of this market, I don't see this to happen.
- Rising yield is one way to get liquidity out, but it's a slow process.
- Another one to crash the market for good, of course, another terrorist attack, which is still a possibility since the world we're living now is not safer than 5 years ago, thanks for our failed foreign policy.
- But this maybe just another Feb.27th, another buying opportunity for bulls, but I think this time it's real. I expect at least a 10% correction in S&P500. We're just 3% done.
- But what do I know, all the readers are gone and there is no comments recently, which is good. Now I'm alone.
- I will not sell short ETFs and puts until early next week, to give it chance to run, unless we have a sharp drop at the beginning tomorrow morning, like another triple digit loss on Dow.
- Now is still the time to buy short ETFs on rallies and sell them on big down days.
- And hopefully, this time I can get all my gold and PM stocks back at much lower price.
- Added DIA and QQQQ puts.
- Sold IWM puts at the end of the market close.
- Added TWM again.
- To be nimble to sell on strength and buy on weakness, I mean short ETFs and puts.
- To have guts to sit against one or two big rallies.
- Of course 1 and 2 contradict to each other, and I need to do both of them right to a certain degree to make money in the down market, if finally, we get one.
6 comments:
You're not alone. Tough to comment, though, since I'm in that told-you-so position--with myself. Remember I said the thing about being on the outside looking in with DXD? I just couldn't pull the trigger and get back in because I felt so burned. I had 4400 shares, by the way, so it's pretty hard to watch this action. Of course I should have cut my losses and then got back in; or I just should have been patient; unfortunately, I did neither. Still looking to get it back with gold shares (NEM, ABX). We'll see...
Michael,
It's no a shame to lose money in this market. So many people are clueless investors, they may do better than us this year, but they can never make big money. But we can, if we continue to improve ourselves day in and day out. As long as we learned something, it's not a waste of time and money.
For gold, I'll wait and will use small gold mining companies, ABX is better than NEM, IMHO. And risky small PM stocks can provide better returns, but have to wait for them to go further down.
i think market still has the ability and possibility to test high. but technical damage has been done in last three days. a confirmed double top will open the door to dow 11600, spx 1320.
I read an article saying that ETF's such as DXD, QID, TWM typically have .99% fee. Does it mean that everytime you sell ETF, you need to give away 1% for fee?
Can we buy ETF's with Roth IRA or 401K?
Thank you.
Yes, you can buy DXD TWM just like stock in IRA. The fee should be for each year, and you don't need to pay for it, it is already in the price, just like you buy mutual fund.
This looks like a short term correction to me. I sold all my puts and switched to long again. I did read you post every day and really appreciate your insite. Best of luck!
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