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.

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