Saturday, February 28, 2009
Month End Trades
First see - Intraday Trades - February 27th, 2009.
As I mentioned in the link above, Friday I dumped all of my triple-short financials position in the pre-market. Here are all of my FAZ trades for the week:
Tuesday - bot 64.45, bot 57.87
Wednesday - sld 61.00, bot 60.00, bot 55.27, bot 50.00, sld 57.04
Thursday - bot 50.74, sld 55.75
Friday - sld the balance (3 buys) at 62.11.
Then I got restless and scalped it one more time in the afternoon. Bot 59.93 and sold at 62.00.
I also scalped SRS late in the day. In at 77.87 and out at 80.03.
Now let's talk about oil.
I dumped my entire position. I sold all of my DXO at 2.37; and all of my OIH at 74.72.
Both were losers.
My DXO buys began when oil was $62 per barrel at 4.95. I bought again at 4.92, 4.21, 4.18, 3.43, and 2.68 in varying quantities. My cost basis ended up being 3.81.
My oil service ETF - OIH - I've had since October. My cost basis there was 84.16.
I admit, I've capitulated on oil so it may very well be time for it to soar.
And, if it does so, I hope to get short. Yes, oil is a *store of value* in this world of flimsy fiat currencies, but its demand has also proven very sensitive, make that MUCH MORE sensitive to macroeconomic turmoil than I had predicted.
Right about now I would feel so much more comfortable with all my assets in an oil tank in my backyard than I would having them in bankrupt banks run by Morons. BUT, oil is difficult to store. So while the out-month oil futures hang high ($60?), near month spot crude keeps getting shellacked. How does this affect DXO? I don't really know. The ETF might be getting hammered rolling oil over every month - buying high and selling low. I've heard there is another oil ETF out there that keeps an equal weighting of spot and out-month futures' prices. It's hard enough gambling on the underlying; these issues with the *investment vehicle* are a real pain in the butt!
Also, all that research I did on ETF decay really put a damper on my DXO enthusiasm. If anything, to get *long oil* I should optimally be shorting DTO, the ultrashort oil ETF. [Yeah, I know DTO's hard to borrow and entails a couple other *risks*.]
I happen to think oil could be here, $30-$45, for a while and don't want to suffer short term ETF decay on a long term oil bet. Yes, oil could rally to $60 per barrel later in the year and DXO might very well still be 2.37. Again, it's all in the *path*. Read my previous posts:
ETF Daily Compounding
More On ETF Decay
Measuring ETF Decay
Leveraged ETF Risk.
My trading account is really getting pretty empty. I've had a good run in 2008 and am determined to not only *keep it*, I want to be fully loaded to take advantage of the next insane move in the markets.