What a Ride……….

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Well, THAT was something, wasn’t it?

I’d like to recount the past 24 hours for me. Just a way for me to share some thoughts, for whatever they may be worth. Perhaps there are some insights buried in these words for others so that it’s not just a self-absorbed narrative.

As regular readers know, I had taken on the decidedly un-Tim-like stance of turning bullish. To be precise, last week I reduced my short positions from 90 to 30, increased my long positions from 0 to 4, and had reduced my overall exposure from 300%+ to 135%. In short, I was ending the week with much lower risk, much lower opportunity, and an eye toward a bounce.

I was eagerly awaiting the open on Sunday. I kept scanning the news, and there was nothing particularly market-moving going on, with the exception of the radical-right nut job winning the Brazilian Presidency, which was actually kind of bullish. Even ZH couldn’t seem to find anything really big to worry about.

The GLOBEX open, and the ES and NQ started creeping higher. Phew! They kept getting stronger – – – particularly the NQ – – and I was pleased to see my little plan might just start working. Over the course of the evening, however, they got progressively weaker, and eventually they were both red. By the time I went to bed, the ES was down 9, so I figured I kind of blew it by being relatively light as well as partially long.

Out of nervousness, I suppose, I woke up at 4 a.m. I was petrified of seeing a huge crash on the screen, so I was overjoyed to see that not only were the ES and NQ up, but they were both up much bigger than before. Not only that, bonds and golds were weak, and I had short positions on both of those. So it looked like a pretty good open.

Once the market opened, it looked like the bounce was fully roaring. My portfolio was showing about a 1% loss, but that was because of the 30 short positions, some of which got stopped out. I kept trimming back on the shorts. However, as I was very quickly surveying the charts, I was not particularly impressed with the follow-through on my longs. Not only that, I’ve got to tell you that for me it’s really, really hard to be both long and short at the same time. It’s kind of schitzo, and there’s only so much of that I can tolerate, so I decided to pull the plug and dump all the longs.

Dump them I did, and at a profit. They rose a little more, and I started to wonder if I had jumped the gun, but – – as you well know now – – the market started to weaken again.

At this point, I was exceptionally light, almost to the point of pointlessness. I had 0 longs and 14 shorts, using only about 60% of my buying power. I was still down about 1%, but in my heart I knew I had done the right thing by lightening up into the weekend.

My list of potential shorts was 100 symbols long, so I started going through that as quickly as possible. Most charts were still much too battered to short, but some of them had a pretty attractive risk/reward ratio. I was moving as fast as I could, and I rebuilt my little 14 position portfolio up to 34 positions. And then, a little later, to 53. The market kept sinking, faster and faster, and I was frantically getting positions in place while at the same time keeping my head level and making sure I wasn’t making any tactical errors.

In the final 15 minutes of the day, I intended to built up all the way to 72 positions, but, simply stated, I ran out of time. By day’s end:

  • I had 57 short positions (and no longs, obviously);
  • Was using about 160% of my buying power
  • Had a watchlist of 95 symbols left of potential shorts, about 15 of which I really wanted to short before the close but couldn’t – – including, by the way, Tesla.

So, in the end, it was a very good day for me. I had a healthy profit. I made money on all my longs. And I feel like that I behaved rationally and responsibly. I wish I had a few more minutes to enter those trades, but, as they say, tomorrow is another day.

This is going to be a big week, everyone. I hope other Slopers did well too.