Macro Tsimmis

intelligently hedged investment

SELL ProShares UltraShort S&P500 (SDS), Short QQQ (PSQ), & Short Dow30 (DOG)

Posted by intelledgement on Fri, 21 May 10

We expect that there is a lot more “down” coming, but we are stepping aside here in anticipation of a continuation of the suckers’ rally that has been ongoing since March 2009. And we remain cautious in our use of the reverse gear by virtue of our error in staying short during the rally in November-December 2008, which cost us a 29% haircut.

So despite a USA “recovery” with no job growth, foreclosure-challenged house prices, ever-deepening government debt and failures to deal with structural issues (social security et al) and systemic risk (neutered financial regulatory reform)…despite  the evident spread of systemic-risk level problems to the Eurozone with their failure to address the underlying structural issues affecting the PIIGS…despite the risk of a significant slowdown in China where the government is trying to cool real estate speculation and inflation…we are cashing in our short chips here to ride out a potential bull-market storm.

This market is too volatile to ignore sentiment which can drive two-or-three year’s worth of “normal” movement into just a few weeks…even if such a move is in the “wrong” direction. These short positions bought us insurance against a major meltdown for the past couple of weeks, which risk appears to have lessened for the time being, and we exit them with a modest profit.

We’ll be back, sooner or later.

Previous DOG/PSQ/SH-related posts:


Leave a Reply

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: