Tuesday, November 13, 2007

Bought A Little NASDAQ

As my faithful blog reader(s) know, I have been gone for a couple of days. Meanwhile the stock market has been getting hammered. (Click the chart to enlarge).

I did catch about half of the move down in the NASDAQ (6% out of the 11% drop) but unfortunately covered my short NASDAQ-100 futures position, my BIDU puts, my AMZN short, and my Goldman Sachs puts two days too early.

After 12 years of poor market timing, hindsight is a stick I no longer beat myself up with.

So, moving on, I came home last night and decided to get a little long. While most people were watching armor-clad cavemen jostle over a ball on Monday Night Football, I bought some December NASDAQ-100 futures at 1990. I figured I could make a quick 30-50 points.

Now as I type this, they are up 18 pts to 2008.

The dilemma of such a rapid profitable development is that now I am thinking about holding the position for longer (more points) than I originally anticipated. In this world, it's so easy to convince yourself that you're a genius.

And there's when the trouble starts...

UPDATE - I just sold my position at 2015.25. I just don't have any patience.

Many other traders would insist that, in this scenario, one must only sell say half of your position - and let the other half ride. Sometimes I take this approach but overall but it's not really my style. I am trying to juggle a portfolio of positions. My biggest bet is a short position on the long bond. I figure if the market rallies, the bond will dump as the "flight to quality" trade will unravel. I feel like I am "long" the market aplenty.

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