Playing It Dangerous(er)

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I wrote in the post last night about how I was taking a conservative approach, having gone long five ETFs as a hedge (DBC, USO, XOP, SLV, TBT).

Well, these hedge positions did the two things that hedge positions usually do for me. Specifically:

(a) Jack; and

(b) Squat

I lost money on all five longs (and did so pretty much instantly at the open). Sometimes I wish, as a bear, I was a pure bear. This "long" business is for the birds.

But I judge myself at the end of each day more on whether I followed a plan or not as opposed to whether I made money or not (side note: I did make a profit today, thanks to my 59 shorts). There are some days that I make money and I'm angry at my failure to execute; there are other days when I've lost money but pat myself on the back for executing to plan.

So, as for today (Wednesday), I'm not upset with myself, because the hedges were in place for rational reasons, and they got stopped out at pre-established prices (as opposed to being rashly exited just because I was scared or angry). So I would have been better off without them, but I didn't fail myself, and that's what matters to me most.

The unfortunate thing about the market is that it has changed from a steadily trending market…..


……….back to a market that lurches up and down with the nauseating jerks of a roller coaster. As Goldman humourously put it:

"Stocks off just shy of 1%, which erases most of yesterday’s gains, which erased most of Monday’s losses. After tomorrow, will you be able to say that Thursday’s gains erased most of Wednesday’s losses, which erased most of Tuesday’s gains, which had erased most of Monday’s losses? With apathy running high and conviction low, that sounds just as reasonable as anything else."


Anyway, I'm back to Pure Bear Mode again and am currently 62% committed (the rest, in case I need to be clear about it, is in cash). I've got to say, I am struggling with whether or not to exit most of my positions by late Friday and plan to avoid the market until Wednesday afternoon, after the FOMC press conference. I really want to have every single month profitable for Q2, and although I've got a profit in June, it isn't so gigantic that I can be cavalier with it. So I'm leaning toward caution.

As for the new love of my life, SocialTrade, it's getting to the point that we're adding new features every few hours. The latest is the ability to send a page to all your Twitter followers (I've got nearly 7,000 now!) and Facebook friends. Help spread the word about this awesome new information site for traders by using these buttons!


For instance, if you click on the Facebook button, voila, the window below appears.

Oh, one last anecdote. My model rocket launches lately have been about as successful as the Eurozone bailouts. It's lucky that I haven't set a forest on fire. The most recent fiasco did, however, yield some good video images. Here's a particularly cool shot shortly after the launch (in which the rocket went lateral in a big hurry) where you can actually see my rocket and its plume cast as a shadow. Yow!


That's it from Nervous Tim. I'm going to go fold clothes or something to get my mind off things that could go wrong.