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发表于 2009-3-28 14:37
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三月 21, 2009 - 08:36 上午Right and WrongHello from my snowy base of operations (well, not particularly, but it will be once the storm blows in tonight) at
During the long drive up here, I was talking with Mrs. Bear about how this blog has put me into a constant state of self-examination with respect to my trading. I think that's healthy, and here are some of the takeaways for me from the prior trading week:
Right Moves
- Being Hedged - I don't have a hedge fund (although I occasionally toy with the idea), but from what I understand, the vast majority of "hedge" funds aren't that at all - - in other words, instead of being long and short, most funds are simply long, which is why their performance stinks just as bad (or worse) than the market in general. I have a wide variety of carefully-chosen longs and shorts (although good longs are pretty sparse these days). The upswing earlier in the week wasn't nearly as bad as if I was entirely short.
- Not Quitting on a Symbol - in this case, our old friend FAZ. I had been hurt by FAZ earlier in the week, and late Wednesday night, I swore off it for a while. But after examining the financial stocks, and seeing how they were basically completely hosed, I figured FAZ was my best way to profit. A 40%+ gain in just two trading sessions proved it was right to be forgiving.
- Recognizing the Strength was Unsustainable - Wednesday evening was a very important period of examination for me, because I really wanted to see, on a bottom-to-top basis, what the market was doing. I was convinced that there was no real basis for all the strength we had been seeing besides the printing-money-from-thin-air lunacy that is eventually going to ruin this nation. I was able to be boldly bearish the rest of the week, which believe me, took some fortitude.
Wrong Moves
- Overweighting - My portfolio allocation model, if you can call it that, can be written on the back of a business card with a crayon. I typically buy $5,000 of an option, $10,000 of an individual equity, $100,000 of an ETF, and anywhere from 10 to 20 /ES contracts. I got way too enthusiastsic with some of my shorts, and that was a big mistake. General Electric, for instance, was something I felt was really going to tumble, so I shorted hundreds of thousands of dollars of it. When it (briefly) pushed higher, I got stopped out with really ugly losses (and, just to add salt to the wound, GE has indeed resumed its weakness). No matter how great a chart looks, there is no reason to go insane with the size of the position. I still think GE is heading to $4.xx before this bear market is completely finished, but an overly-large position (and an overly-tight stop to protect that position) was a deadly combination.
- Letting Fear Lead to Overly Tight Stops - This really only applies to the /ES, since I was pretty disciplined about my stops, but after the Wednesday nastiness, I was too antsy about my /ES trading, which left a pretty decent amount of profits on the table. In retrospect, shorting the market on either Thursday or Friday mornings was pretty much a technical no-brainer, but I only enjoyed a portion of the potential profits from such a trade.
My main conclusion about the market these days is this - - - the mere fact that I am able to find 10 great short setups for every 1 long setup tells me this market needs to soften up some more before it really rallies. I am having a devil of a time finding any good longs, and I think the reason is that we don't have a base. Those are five really important words, so I'll type them again: We. Don't. Have. A. Base. Look at what the S&P did in 2002. That, my friends, is a base. You have repeated attempts to crack lower, each failing, and you have an important higher low. There is truly a floor from which stocks were able to leap higher.
Now take a look at the recent activity on the S&P and tell me, with a straight face, we have a base.
All we've got is a steady plunge down from 800 and a steady fight right back to the same level. The most "comfortable" outcome for me is continued weakness to somewhere at or just above the 666 low and then a move higher. Hopefully once we're down in the devil's territory again, we can find some stocks worth buying. As it is now, I've got shorts up the yin-yang, and I think next week is going to be really good for the bears.
Posted: 08:36 上午 | Comments (View) | Permalink
三月 23, 2009 - 06:08 上午Triple-Top or Breakout Coming?The /ES has been strong ever since trading started Sunday evening. The principal question is whether or not we'll push past 801.50 or lose momentum from here. As I've been saying frequently recently, looking at individual stocks, I am finding ten great shorts for every decent long, so it's still very hard for me to conceive, on a bottom-to-top examination, where the strength could come from (although, ironically, I think one more bout of weakness could make a lot of financials very compelling buys, in addition to semiconductors, which are the best sector I've seen so far).
Posted: 06:08 上午 | Comments (View) | Permalink |
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