I Flipped My Brain Went Long

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July 29, 2008

I took an index long this afternoon on a lighter amount of money. I want to be careful. After losing everything I made yesterday in the leveraged mutual funds, that is a little bit of a wake up call for me considering yesterday was a huge day for my account. Dennis Gartman likes to say, “you know you are in the wrong position when it starts losing money.”

The short term time frames like the 30 min suggest more up, the daily looks good for more up, and the weekly is attempting to move here.

I considered buying FNM and FRE today, but decided to wait that one out with the UYG being up 13% on the day it might be setup for a minor selloff tomorrow.

I’m pretty amazed at today’s price action, really shocked it didn’t go lower today. Maybe too many people were positioned that way – who knows, but I have to respect the price action today at all costs.

I took losses ranging from 3-4% on the etf’s and today loss 5.2% in the RUT (gulp) and 4.6% in the NDX ($hit)! That brings my monthly performance from being up 15% to down 8.5% ($hit again!). One wrong day makes a significant difference and why its important to be right as much as possible. Sounds obvious, but if you aren’t on your game for 1 day the swing can be great. My mistake yesterday was getting too attached to my “thinking.” I didn’t take any profit off the table yesterday in the funds “thinking” we would move lower. In all respects thats what the charts were saying. Today’s complete reversal is very dramatic. A mistake in an otherwise stellar first 6 months so far.


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  • kal

    buddy
    is there anyway you can create a portfolio of your positions and update them, that way we can see how many % of your money you put in each position
    you dont need real no.s, just %

  • kal

    buddy
    is there anyway you can create a portfolio of your positions and update them, that way we can see how many % of your money you put in each position
    you dont need real no.s, just %

  • http://www.stockrake.com Sensei

    Sounds like more work for me.

    An example of whenever I talk about stock picks or ETF’s that is roughly 12% of my total allocated money and I’m usually all in with it. However, a position like RTK might only be 16% of that 12%.

    When I make index trades and I say ‘heavy’ that means 100% of my cash is invested in an index directional trade. That would equal 88% of investable capital.

    Example trade from two days ago:
    http://www.stockrake.com/went-heavy-short-early-this-morning~2008~07.html

    Heavy short in etf’s which would be 12% of total capital. Unless I was holding GG/GG calls/ or RTK at that time, the leftover funds would be devoted to short etf’s.

    Then the other 88% would be 100% invested in inverse funds.

  • http://www.stockrake.com Sensei

    Sounds like more work for me.

    An example of whenever I talk about stock picks or ETF’s that is roughly 12% of my total allocated money and I’m usually all in with it. However, a position like RTK might only be 16% of that 12%.

    When I make index trades and I say ‘heavy’ that means 100% of my cash is invested in an index directional trade. That would equal 88% of investable capital.

    Example trade from two days ago:
    http://www.stockrake.com/went-heavy-short-early-this-morning~2008~07.html

    Heavy short in etf’s which would be 12% of total capital. Unless I was holding GG/GG calls/ or RTK at that time, the leftover funds would be devoted to short etf’s.

    Then the other 88% would be 100% invested in inverse funds.

  • kal

    Thanks sensei!
    appreciate the info

  • kal

    Thanks sensei!
    appreciate the info

  • kal

    do you watch MA?

  • kal

    do you watch MA?

  • http://www.stockrake.com Sensei

    As in Mastercard or Moving Average?

  • http://www.stockrake.com Sensei

    As in Mastercard or Moving Average?

  • http://www.stockrake.com Sensei

    If you are interested in buying Mastercard my opinion is a strong “avoid” right here. Actually its a flat out “short” right now. The short trade looks good there on a daily and weekly basis.

  • http://www.stockrake.com Sensei

    If you are interested in buying Mastercard my opinion is a strong “avoid” right here. Actually its a flat out “short” right now. The short trade looks good there on a daily and weekly basis.