With the exception of commissions-based brokers, it's hard to believe there's anyone out there who has really enjoyed the stock market over the past few months. I mean, just look at the ES below. I don't care what kind of implausible hockey-stick-shaped equity curves might be out there on the web (cough, cough); neither bull nor bear can consistently accumulate profits with whipsaw action like this.
It's no better on a longer-term scale. How has the Russell 2000 done for the entirety of 2010? Let's take a look:
It seems almost impossible for me to believe that just 18 (very long) months ago, I was racking up extraordinary triple-digit percentage returns for myself. These days, even the greatest hedge fund managers in the nation seem to be struggling to eek out returns that resemble nothing more than passbook-savings rates from the old days. People are satisfied with even just a few percentage points.
It's a huge amount of work for very little reward.
I guess you can sense my frustration. One day everything will line up. The next day it'll all get taken down again. The real stickler right now is that we're in kind of a no-man's land of prices. The index charts themselves are not clearly bullish or bearish. They're just in the middle of a huge morass.
Individual charts are a different story. It seems that these days, I'm getting one or two "blow-ups" a day among my short positions. Yesterday there was CMTL. Today there was NFLX. It looks like tomorrow it's going to be AMZN, which I'm also short.
Indeed, AMZN is down something like 15% after-hours as I'm typing this. That means that tomorrow, in the span of three months, Amazon will have lost one-third of its entire market capitalization! So it seems like the darlings of earlier this year (NetFlix, Amazon, etc.) are getting shellacked.
One thing I will say is that I have avoided, and will continue to avoid, any of the "ultra" ETFs. With this constant up-one-day, down-the-next, over and over again, people hanging on to such instruments are going to get destroyed. I'd rather hold fast to my current short positions, knowing that these are nominal price levels that will not get eroded by the machinations of day-to-day action.
I'm pretty tired of charts right now, so I'm going to call it a day. Someone let me know if we ever have a trending market again. It would be a nice change.