Slope of Hope Blog Posts

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Between the Scylla and Charibdis

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Today was one of those days where 95% of profits or losses are established within the first hour of the day. Besides that, the market just noodled around.

I hung on to virtually all of my shorts, although I took profits on my OIH puts (about 35% gain) and a handful of other items. Most of all, I added new long positions. As things stand now, I've got about 100 longs, 100 shorts, and 50 options (all puts). So as you can, I'm very hedged, but somewhat tilted to the bearish side. Neither a big up or big down day is going to hurt me badly or make me a lot of money.

It's becoming clear to me that…..

  • The way to make a lot of money slowly over time is in a bull market;
  • The way to make a lot of money quickly is in a bear market

This fact is a bit depressing, since I think it'll be a half year or more before we can rock 'n' roll to true bear market behavior again. I'm going to miss it! Waiting is the hardest part.

In the meantime, I'm straddling both rowboats, bullish and bearish. My goal, as I've said, is to make money most days, but not nearly as much in percentage terms as if I had a pure bullish (on up days) or bearish (on down days) portfolio. To put it another way, today the S&P was down 3.48%, yet in spite of my bearish tilt, I was up only about 1% (this percentage got squished pretty badly by the big percentage dips my high-flying IRA picks took).

Most of us have been talking about the dip to the 770-780 area on the S&P, and today we got it. This is not the most gorgeous, rock-solid base I've ever seen in my life. It's actually pretty messy; a dip below 760 would really put any move upside at risk. But I'm thinking 750 or so is a pretty firm support zone for the market, so as stocks lose some of their air, I'm looking to buy more of them.