Market was flat today and it's the calm before the storm, unfortunately, I don't know if it's going up or down.
- I positioned myself for a sharp drop (2-3%) this week.
- But this market made me afraid of trading and shorting. To say I'm scared of shorting the market is an understatement.
- I've been shorting since last December. I switched to PM, uranium from time to time to ride with the market, but in general, I'm on the short side for a good 7 months.
- Now I may catch the final leg up, but do I have the money to ride it down or just cut the shorts again to reduce loss.
- I promise, if I get the most of my money back this time, I will be really careful not to add too large a position on one or two ideas, like shorting the general market.
- And I learned my lessons on buying RIMM puts. From now on, I will never ever short or put momentum stocks like RIMM, CROX, TASR, AAPL, BIDU. Yes, you may catch the exact peak and make a fortune, or you'll lose 90% of your money quickly.
- Buy stocks using FA make sense, short stocks using FA will make you kill yourself several times over a short period of time.
- On the contrary, I may need to correct myself and go with momentum stocks. This is for the future planning, for this round, let's focus on existing positions and find them good exits.
3 comments:
I think we have a perfect storm for a sharp pullback. The down volume has been much greater than the up volume recently. That tells me the market is rolling over. Today the market lost its mojo going into the close. Another great sign for short term bears.
I'm currently invested in QID, NGAS, XTO, and SLW. I'm doing well with the long positions and I'm slightly in the green on the QID.
By Friday I hope we can look back and see that the major indices have lost at least 3% this week.
David
I'm short RIMM puts too, I bought the June 165 puts on Thursday at 2.65, they were upto 5 Friday morning, but I didnt think they were done, now I'm treading water... the new high today didn't help, I should have sold them when I had the chance... Now I don't have much of a choice, have to hold-on and hope the bottom falls out, 160 anyone ???
Looks like a beautiful bearish open for Tuesday morning. I'm adding a small position in SDD today. Thanks for pointing this proshare vehicle out.
David
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