Monday, March 23, 2009

Bear Platter

Like so many evenings in recent times, one side of the boat is singing and the other now swooning.

Bears were crushed today.

Holders of 2x's and 3x's (short) inverse-ETF's, many of whom I know were adding to losing positions throughout the session, were chewed beyond recognition. FAZ finished down, a mere 45%.

Don't say Quint didn't warn you.

But I don't like speeches - and I know what being bit in half feels like, so I'll shut-it and speak a bit on the big picture.

Volatility remains fantastic at this point. And trust me that will not be true forever. Get it while you can, traders. Because when the volatility subsides (which should occur well before any new, secular bull market), we're going to enter the dreaded apathy period. That is the period whereby the market is neither gaining nor losing significantly, over time, and the investing world is slowly lulled into a sense of boredom and despair. Neither bulls nor bears are earning any chum and it feels like that is the case forever. Good luck beating the super-computers during that ice age tough guy - they stand to make a few percent.

But for now this market can cut (in half!) both directions. As a mere human I'll take it.

And today? Oh, well, the market is rallying - some wicked, counter-punch retracement just powerful enough to deep-fry the bears, give rise to hope for the bulls and ultimately set-up shop for cleaning gills on both sides.

Why should we expect anything else?

My position is behaving well and I am going to hang on to the longs that continue to work; as long as that is the case. That said I may play around with quick hedges tomorrow, depending on the action.

Check-in with the Twitt-spit if you care to follow along.

Total Position: currently 5.13-to-1 net long, (74% invested)

Currently Long (according to size): RJI, GS, ARST, PMCS, WNR, MYGN, IOC, SNDA, STAR, MNRO, UGP

Currently Short (according to size): AXA, ELOS

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