Tuesday, March 20, 2007

MARKET UPDATE

The bulls are running wild today. The home construction news was a boost to the market though I hardly believe that the bottom in housing is in.

In retrospect I feel foolish selling a good chunk of my ultra bull ETFs - QLD etc while adding to the ultra shorts QID etc. Miraculously despite my fund being biased to the bearish side I am actually in the green today with gains in GLD - gold ETF while some of my long positions have been running wild such as SNDK and COGT. I figure if the FED continues to pump liquidity into the system, gold will benefit and thus GLD is a good hedge to my ultra short positions.

On days like these I am Jacks smirking revenge .....


2 comments:

65Trader said...

IM,

I like reading your blog because you present an unbiased view, instead of having a heavy bearish or bullish sentiment.

I'm curious why you would hold both a portion of long ultra fund and a short ultra fund. Do you write options against them? Why not fully liquidate one or the other?

Thanks

IM said...

I am bearish on this market short term due to the low volume rally. However I will not sell my ultra bull ETFs till I get confirmation of my bearish disposition through the action of the markets i.e heavy selling and red throughout. On the other hand, an up day of 1%+ on all indices accompanied with heavy volume would convince me to dump my ultra bear ETFs and go heavy into the ultra bull ones.
FYI on Wednesday of last week, I had no ultra bull ETFs and was all in the Ultra bear.I started selling the ultra bear in anticipation of a double bottom which did not occur. I started buying the ultra bulls once we were 40-50 points of the low and subsequently dumped my remaining Ultra bear once the Dow crossed 12,000 and added more ultra bull once we were green on the day.So I started the day with all ultra bear and no ultra bull and ended with all ultra bull and no ultra bears.

I prefer to scale in and scale out of positions in the ultras.