Jan 07 2009
There’s just no play
I somewhat wanted go short yesterday afternoon but I couldn’t get myself to do it because I was travelling today. Flying for a whole day and not knowing how your position is doing is just too painful and I did not want to go through that. The second test of the 940 area on the S&P 500 failed yesterday and that’s where a good short entry would have been via SDS. Oh well, that’s life.
The market is pretty much in no man’s land right now. The unemployment report comes out on Friday and I am not going to front-run the news on either side. I am just going to sit out and watch. I don’t trade futures so I’d be locked in whatever position when the unemployment report comes out at 8:30 am EST before the market open. If I end up front running the announcement, it’ll probably be long one Jan 09 IWM put at the money, nothing big. I think I’d rather have my sleep rather than worry about a tiny position. Sure, any time you have some position on, it may be difficult to sleep, but the real question is if the loss of sleep is commensurate with the position size. One put is nothing, but I think it will get me too excited that I can’t sleep. It’s not worth it.
If the market rallies and blows past 940, then great, maybe I’ll get a better short entry down the road. If the market takes a dump, long bonds will be bought hard and I’ll probably look for another long bond short entry via TBT. Given the somewhat opposite directionality of stocks and bonds, I think I would rather short the long bond than to go long stocks if given the choice.