Making sense of things
There is no doubt in my mind that we sold at a less than opportune time. I had wante dto sell as we got closer to earnings season and solid earnings reports calmed things down.
There is no doubt in my mind that there were better times to buy these PUTs. I've been pointing them out for 5 months now, I should have included them in the portfolio.
The Fed will likely juice the market a bit with more generosity and rate cuts, but even those are limited. The low rates are spurring on a weak dollar to new levels of weakness. That in turn is pushing gas to new highs (+10% in 2 weeks). Something has to give, and the US economy will slide.
The portfolio and model are changing dramatically in 2 ways:
1. After resisting it, I have added a lot of puts
2. Trading activity will increase
In a very disciplined manner, we will set SELL prices to try and yield 5% per month. That will pull us out of the hole by SUmmer's end and set us up for a great year finish.
All PUTs need limits to sell at a 10% gain. We can always jump back in, but lets play the volatility.
There is no doubt in my mind that there were better times to buy these PUTs. I've been pointing them out for 5 months now, I should have included them in the portfolio.
The Fed will likely juice the market a bit with more generosity and rate cuts, but even those are limited. The low rates are spurring on a weak dollar to new levels of weakness. That in turn is pushing gas to new highs (+10% in 2 weeks). Something has to give, and the US economy will slide.
The portfolio and model are changing dramatically in 2 ways:
1. After resisting it, I have added a lot of puts
2. Trading activity will increase
In a very disciplined manner, we will set SELL prices to try and yield 5% per month. That will pull us out of the hole by SUmmer's end and set us up for a great year finish.
All PUTs need limits to sell at a 10% gain. We can always jump back in, but lets play the volatility.
posted by Andrew at
6:30 AM
2 Comments:
I think you have to realize that expertise of the traders. I sold out of SKF on Monday with a nice gain and bought UYG lots and TAM (little) after the annoucement.
Yes this is day trading (I am at home recovering and this is my only activity), but still I think you cannot underestimate how cleaver the structured finance guys are. They now have a new tool of swapping "AAA" rated anything to Fed in exchange for Treasuries. This is a magic wand that will keep the financial guys up for at least another 15%.
The momentenum plays are hard to avoid at this time.
Good ideas.
I think that no matter how hard the Fed tries, they can't paper over the rising tide of slowing consumer spending and rising defaults (credit cards and housing).
The momentum has gone for now, but it will return shortly.
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