Well, the market's tendency on a daily basis to go up, then down, then up, then down, (et cetera) still seems firmly intact. The big kahuma issue, of course, is what the gargantuan economic behometh called Greece decides to do about its austerity measures. Because, God knows, if they pass austerity measures that are meant to be in place for years to come, they will follow them to the letter and nothing at all will change.
This looming – and ridiculous – issue continues to hang over our heads, and thus I remain fairly light. I came into the day with one large long – FXE – and I added to it early in the day. I exited at a nice profit, and although I may be missing that long in a day or two, I'd really rather not gamble on what the Euro is going to do next. I am, instead, in a large quantity of small short positions, none of which are ETFs, and none of which are more than about 1% of the entire portfolio. I also have over 40% in plain old cash.
Of course, ZH is rampant with speculation about all the what if's and what-might-comes once parliament votes, but I'd rather just wait until this whole thing blows over. I will note, however, that the IWM chart below either represents a fantastic shorting opportunity (one in which, for reasons herein cited, I will not be pursuing) or a nasty bear trap. I think the downside opportunity is larger than the upside risk, but I really think I'll just stand aside here.
I read with great interest that the average return amongst hedge funds thus far this year is something like 1%. It just goes to show how, even with a ton of intellectual firepower and resources, some of the best traders in the business are having trouble wrenching even nickels and dimes out of this psychotic market. There is so much abnormality going on – – what with Greece, the debt ceiling, the end of QE2, the prospects of QE3, and any other black swan you care to imagine – – that the simple act of focusing on companies and their earnings seems positively quaint.
