Home > Stock Market Buys, Stock Market Sells, Stock Market Speculation Station > Playing With Fire – UltraShort S&P 500 (SDS, SH, SKF, QID, INTC, JPM)

Playing With Fire – UltraShort S&P 500 (SDS, SH, SKF, QID, INTC, JPM)

“When the facts change, I change my mind. What do you do sir?” – John Maynard Keynes

I bought SDS before the close yesterday (10/13) after looking at one of my more reliable long term technical indicators which predicted a fairly serious iminent fall in the market. Combined with the fact that Intel (INTC) and J.P. Morgan Chase (JPM) were reporting after the close and in the morning made me want to get some protection.

Their earnings not only had high expectations, but they are also bellwether of their industry and of the overall market. Had anything not gone off perfectly in their reports, the results would most likely have been bad with a run down to at least 1030 on the S&P. I also felt that Dow 10,000 could pose strong psychological resistance in the market

That being said, I heeded the wisdom of Mr. Keynes and covered the position early in the morning after anticipating a half gap fill. In the end I only lost 1.7% (including trading fees) on a trade that could have returned at least 5% easily. I also put on additional long positions which I will get into later.

-MJB

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