|Re: Long SDS at $19.70 (20% of account)|
Good weekend convo, glad to get your input. Sorry to hear about the computer mishap, I've done it before and it is the most frustrating thing!! Would have loved to read what you had to say, but I get the picture from what you did post. I think we are looking at the same things and seem to be on the same page overall. Over the past few weeks I have been looking more at long term trends and charts, 5-50yrs back. Looking at the SPX and DJI charts back to 1980 or 1990 is scary.
Because the market has been so top heavy and with the drastic volatility we've been seeing, it's hard for me to feel optimistic. That is why in Jan and Feb I was sticking mostly to day trading and a few short term swings. But over the last few weeks I have been playing short-term shorts like crazy, but after the run last week I'm pretty convinced the downward trend will start soon. Especially, because I feel like to run was only supported by oil and the ECB. My bet is big/smart money started shorting last week and will continue to do so as long as this run continues. Anything can happen and anyone's guess is as good as mine. But I feel like the set up is prime for a massive money making opportunity.
Like I said before, I placed 50% of my trading portfolio in different shorts on Friday with no stops in mind. Plan on adding another 20% Monday or Tuesday, still leaving myself 30% room to add between 2050 and 2100, at which point I will be all-in. I am spreading these shorts out, some in more risky plays such as UVXY, and some in safer plays such as CPB. Have been and will be looking at some options plays, but its hard to guess the top and premiums are pricey on the weeklies. Probably will look to the beginning of Apr on a few SPY P's and few other names. I have always had a hard time putting large amounts of money into options, its hard to trade around them if I'm wrong. Now I am not talking about betting the ranch, kids, and life on this, only my trading portfolio. Like I said, anything can happen.
Good luck to you and to all in the Pit
| Reply to PornStarTrader - Msg #2604389 - 03/13/2016 07:36|
Re: Long SDS at $19.70 (20% of account)
OMG, I wrote a long, well written explanation on why I think we can go down and I hit the wrong key (back button) and I lost what I wrote. I want to cry. Anyway, I am too disappointed to write it again but I will say this.
I can see anything happening because nothing is garunteed.
The market has only been up because of the historical FED intervention and nobody except Cramer would dare dispute that. Just take a look at the DJIA chart from 1900 until present. It took 85 years to reach 1200 in a long steady uptrend. Then in the last 30 years it went vertical from 1200 to 18,000. I have a chart framed in my office wall showing 1900 - 2000 and its scary looking at it and it doesn't even show what else we have gained because it ended at 11,000!
I believe P/E ratios can change because they are not scientific nor are they in The Bible..There is no reason that stocks MUST be given a set upfront value for their future earnings. That P/E must change due to the fact they are not what these companies could do "drug free". Nor would I expect a natural bodybuilder to be able to be as strong or big as one using steroids.
And I don't buy the rationale that stock prices will go up or hold their prices due to due to raising rates means the economy is strong therefore the companies should do well going forward. If the FED or any sitting President truly believed that they would have raised rates long ago but nobody wants stocks trending down during their term. That said, keeping rates near zero forever can be done but then there is no tool to use if another crisis hits.
So maybe stocks go up more but I am confident it wont even be enough to squeeze me or make me feel uncomfortable. Just looking down from our nose bleed levels and knowing the FED knows they probably need to build up some ammo in case a crisis hits again gives me confidence I am positioning right. Matter of fact, I just got the epiphany I should up my short position even more. To at least 50% of my account would be right. I believe I will start doing that this week.