Closed All Short Positions

I've decided to quit fighting the market, which makes no sense whatsoever with regards to market sentiment. I've closed out my positions in SDS, QID, and DXD. I guess this is a lesson learned the hard way. I've tried to legitimize in my mind why the market should be headed downwards, but I guess if the government wants to throw hundreds of millions of dollars at the problem, then that is enough to sway the market and other investors.

I believe we are headed down a very slippery slope and am really struggling with having a positive outlook on the U.S. market. Lack of jobs, continued uncertainty, inept legislators, and a poor housing market....what's not to be positive about? I envision that many people are going to get hurt again, so I'm going to keep my investments small and precise.

Tomorrow's Trades

I will be trading from home tomorrow and definitley very anxious to see how my play in Adobe (ADBE) and my 2X short positions in SDS, DXD, and QID play out. I'm also keeping an eye out for YRC Worldwide (YRCW) and Dryships (DRYS).

I just read a basic online trading book this weekend from Christopher Farrell "Day Trade Online" 2nd Edition. I enjoy reading trading books and delving into ways other traders view and trade the market. The book is pretty basic but reminds us how important the bid/ask really is and how influential the market makers and NYSE specialists really are, so try to be with them rather than against them when entering/exiting trades.

Anyhow good luck to all and if anyone is reading this blog and wants to comment on stocks they are watching tomorrow or books they would like to hype then please comment.

Negative on S&P 500

I'm betting against the S&P 500 again via the UltraShort S&P 500 Proshares (SDS) at $76.60. I'm playing the psychological factor of over exuberance currently being displayed within the market over the past week.

Oversold

I picked up an additional 100 shares of CEMEX (CX) at $4.63 and decided to lock in my profits by selling my Ultra Short S&P 500 (SDS). I think the S&P 500 has some additional downward movement, but I don't want to get too greedy since I've already locked in a 49% profit.

Sold SDS

I closed out my SDS position at $111.93 for a 31.4% gain. My goal was to sell in the $120 range, however there was a 13.8% trading range with a $99.94 low/$113.73 high and I wanted to take advantage of that huge upward move. I wasn't jumping for joy to lock in those profits, but I would have kicked myself for missing that big move.

Short Trade Influences

The SDS has been treating me well and as long as the ambiguity remains within the market the better for this trade. Today in pre-market it is trading in the $106 range, which puts my gain at approximately 24% for this particular trade. After some research, I have tentatively decided to sell in the $120 range, which would translate into an approximately 40% gain. There are a few things which will directly influence my trade strategy and they are:

*Big 3 automakers status

*Ben Bernanke and Henry Paulson testimony

*Barack Obama nominations

Steel Plays

Even though this sector had a big sell-off in the past few days, I like some of the stocks within that industry. I picked up some shares of United States Steel X at $27.79 when the market was down big yesterday.

I'm at a bit of a crossroads on shorting the S&P 500 with SDS. I really wanted to sell yesterday when it was well over $100, but I stayed put with my shares. I really think the market will be lower, but don't want to get too greedy with profits during these tumultuous times. The G20 meeting is today, so we could see more extreme volatility especially heading into the weekend.

Don't forget options expiration is next week as well. Have a great weekend.

Election Day Coffee

Today looks like a big open on the three majors Dow, NASDAQ, and S&P, however I am staying put with my shorting of the S&P 500. Good luck to all today....and don't forget to vote. Then go to Starbucks and get your free cup of coffee.

UltraShort S&P500 ProShares

Got in pre-market on the UltraShort S&P 500 (SDS) at $85.16. This is a pure play on the election volatility. I feel that the market will be weaker during this election week.

Gonvernment SNAFU

Hold on.. just about to get perched up on my soapbox. Does anyone else wonder how some of our elected representatives survive in the "real" world? I could not believe some of those questions they were asking. It seems like they don't have a clue as to what is going on in the marketplace. I'm just as upset as the next investor and there is a ton of blame to go around, but now is the time to fix the issue and then do a little "head hunting." Leave it to the government to fumble and make the process harder than it needs to be. Do they not realize that time is of the essence? Okay I'm done.

Now onto some trade activity....I tried to get into the UltraShort S&P 500 Proshares (SDS) today at a discounted price, but set my price too low and missed out. I think the market will feel the pressure of the continued dragging of feet in Washington. Earlier this week I picked up some Jan 2010 $2.50 calls on WAMU (WM) and went long on the U.S. Oil Fund ETF (USO). HAGO Justin

Update: Looks like the WAMU is done according to recent reporting, so chalk that up as a learning experience. Got a bit greedy and should have sold a few days ago to "lock-up" some minor profits.