Something occurred to me last night: remember how I used to point out how the Fed's prostituting itself kept having a shorter and shorter bullish effect on the market?
At first, the bullish effect last a few months…….then a month…….then a couple of weeks…then the effect could be measured in days……
How long did yesterday's investment-bank-giveaway last? Half an hour. Thirty minutes. Which was the thirty minutes I needed to short about 90 new positions.
As the Fed continues setting explosive charges underneath our once-great Republic, the effect of these – pfft – "stimulus' efforts will continue to diminish to the vanishing point. In a few years, Ben Bernanke will be held up as an even more destructive force than Greenspan ever was.
I started the day with 284 positions, and I trimmed (probably unnecessarily) to 250. One of the best performers – which I'm still holding – is Synchronous Technologies (SNCR), shown below. It had a couple of characteristics I love to short: (1) a failed bullish breakout; (2) a trendline break. I suspect this has a couple of points left to fall.
As for my my one long – FXE – I imagine it'll do as well as the other "insurance" I got yesterday, which is to say, not at all. But better safe than sorry. Given what I'm seeing with the NQ and ES right now, Thursday is going to be another winning day for the bears.
Knowing when to cover is way, way harder than knowing when to enter. Here’s an example of a position I covered today at a 15% profit. The risk simply outweighs the potential reward at this level. On the whole, I am keeping most of my positions. I have 264 shorts remaining, although I am only through 4 letters of the alphabet at this point!
UPDATE: Position go boom! Purely short again. It was worth a shot.