After seeing the news of massive March puts were bought in HBC, I added my own puts yesterday. Today, market is down 3% and HBC 8%. Tomorrow is a key day:
- How will market react to JPM earning, Steve Jobs's medical leave?
- Other economic data?
- We know all these will be bad, but how market react to these is the key.
- My plan is following:
- If market drops hard, I may need to reduce my shorts; and when it rallies, add these shorts back on.
- If market rallies from the get go, don't need to do anything, it will reverse to down soon.
- And I think the Obama rally ended on Jan.2nd.
- From now on, every rally should be sold. You can only be wrong for getting too early in short ETFs, i.e., you'll get too high an entry price. But eventually, you'll get it back when market touches new lows.
- I think market will make a few new lows this year.
