This goes for tomorrow morning, too.
• All cash, as I have usually been for the past week or two. Flexibility and protection are key, key, key at this point.
• There is very, very little anyone, including Obama, Geitner, Bernanke, LeBron James, Oprah, the Euro Union, Octomom, can do in the next 12 hours to change the current negative sentiment in the market. The only saving grace in the past few days was, really, the extremely oversold level of stocks and overdue bounce. Now that most stocks are not as oversold, reality sets back in.
I didn't have enough optimism to ride the bounce on Friday and Tuesday. But I was paranoid enough to not be long anything that would hurt me significantly.
• Not getting a new position in FAZ and/or VXX in this climate (especially at today's close) is contrary to my playbook, though they are both new pages, to be sure. Not getting VXX late in the day, or even before the bell at 30.99, sucks. But chasing here in after hours would suck worse. VXX reached 31.90 on minor volume, perhaps manipulated to some extent. I've found before that VXX will run like crazy after hours, then pull back over night and give buyers a much better price before the opening bell. Unless it retraces a lot more (currently 31.60), I'll wait until morning.
• If VXX does retrace considerably and I enter a position, I may get a smaller position in AAPL — sort of role-reversal in my hedge pairing of yesterday with these two. That way, if by some minor miracle tomorrow's premarket is rosy and devoid of doomsday omens, I can ride some AAPL up as a hedge against my VXXen.
AAPL is Betty. VXX is Veronica. Apple is Mary Ann. VXX is Ginger. Sometimes it's best to be Mr. Howell and just be content to have cash (and Lovey) at your side.
Veronica and Betty
Mary Ann, Gilligan and Ginger
Lovey and Thurston Howell III
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