Wednesday, May 12, 2010

No insurance needed (today)

So much for the hedge in VXX. A lesson, indeed. When there is no fear in the market, stay out or trade without restraint. Then get the hell out before the roof caves in from froth, arrogance and irrational exuberance.

Got out of VXX at a loss (-1.29/share), but it's not the loss itself that this trade was about. There was no ying-yang, give-and-take with AAPL because the market has no volatility whatsover. It's been green since premarket, and that's when I should've played the percentages right and lightened up on the hedge position.

Sold VXX at 24.54. It hit bottom at 24.26, so my inclination was right, like escaping 1% of a swarm of bees and saying, "At least they didn't all get me."

AAPL holding well above 262. As it crested earlier to 259-plus, I was ready with a soft limit buy at 260.21, knowing how traders love their round numbers and breakouts. But as soon as it hit 260, it went at warp speed to 260.60 or so and wouldn't let up. I never added more shares and AAPL is at 262.47 now. I had a Fib retrace price on a limit buy order in, but no chance, not today. AAPL is a tiger on the move.

Took a quickie position in BIDU at 76.05, another pure momentum play. It's already up 6%, a high-risk move. Currently 76.32, which is a pre-split 763. Even with last week's crash, and especially because of it, this is pure insanity. Not out of BIDU just yet.

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