Wednesday, December 17, 2014

Locking up some HOLIDAY GAINZ

Santa Claus rally my balls. But don't worry, it's okay. My balls are happy and glistening just like Rudolf's nose right now, since I went short late November. As you can see, I have been selling the rips all through the past week and it has been serving me pretty well. No guts, no glory, eh?

The little orange triangles are my short entries over the past 3 weeks. Er by the way, this isn't my "virtual trading" account like the 17 year-old kid from NYC. These be real tradez yo.

Anyway, I don't need to justify what I'm doing to anybody. You can believe me, or not. I'm not giving out any advice or offering any services, so I don't really care. I just say what I have done. This is my journal. It irks me that "investors" play blind mice and follow "trades" that they see on blogs and then blame these bloggers if their "trades" aren't spectacular. Honestly, if I had that much power and influence, I MIGHT SAY THE OPPOSITE AND FADE EVERYBODY. I just kid. That would be unethical and totally wrong, right? Oh wait, this is the Internet. Why are you believing everything that you read?

Sorry I got all riled up. Well, back to me then.

So, with the FOMC up later, I decided to book some profits. FOMC days are usually really volatile and it seems like we can go either way really fast. Technically speaking, I guess we can be considered short-term oversold and expect a bounce. The correlation of Oil and the US indices are crazy. Oil at $55 handle. Who would've thought eh? As massively oversold the Oil complex is, and the risk of a strong bounce being very possible, it still is within probability for Oil to sink even lower. Compare this drop to previous times in history. It has been worse before. If the US indices continue to follow Oil, I wouldn't be surprised if we go lower.

Anyway, my trading strategy from here is still the same. I'm going to short the rips, and cover some of my position during dips. I'll let the other half continue running until I see a higher high and a higher low. And then I'll step aside and let this stupid market rally again, and I'll go short. Why short it down instead of buy it up? Valuations are leading me to believe that down is the path of least resistance from where we stand. This bull market is old, and I would very much gladly like to see it die, even at the expense of the global fallout to my other investments elsewhere. Malinvestment requires busts to clean out the system so capital can be redeployed properly.

For those people freaking out, remember, we're only 5% off all time highs. During the GFC, stocks dropped 60%. If you don't feel comfortable with your equity allocation over the past 1-2 weeks, you are holding way, way, way too much equity for your own good. There's no harm "sitting on the sidelines in cash" if you feel comfortable. We aren't fund managers. We don't have monthly, quarterly and yearly KPI to hit, benchmarks to beat and mandated allocation to deploy capital. That, my friends, is our edge as retail investors.

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