Wednesday, October 1, 2008

Perfect Play

Senate vote for the Bailout

So far, I'm looking like a genius.  As I wrote in my last blog, I wanted to get out of my short position and into my long.  I actually did not get the full 4% gain I had when I wrote the last blog, but I did end up with a little bit over a 2% gain.   I put in a stop limit order at the 2% mark, and it actually executed in the 30 minutes it took me to get to work.

But then I reversed the position.  In fact, I put more money in on the other side.  I went long on the market and purchased QLD.  I did this in anticpation that the Senate would pass a modified bill.  It looked more and more likely that it would happen.  So right before the close of the market, I pulled the trigger and went long, despite my bearish long-term outlook.

I'm probably not done here either.  The Senate did indeed pass a Bailout bill.  I'm not happy about it, but rather than cry about it, I'm trying to think how I can profit from it.   There are short term gains to be had here and I plan to partake if I can.  The name that will move the most is going to be the financials.  They are the ones most helped by this move by the Senate.  I plan to go long the financials.  I will do it by buying the Ultra-long financial ETF, UYG.  I'm sure that it will pop at the open, but it will run even more before the end of the day.  I might not stay in very long, I might trade out of it before the end of the day.  But I also may stay in since I think it is VERY likely that the house will now feel pressure to pass the bill.

It's going to be a wild wild ride.  I'm either going to make a lot of money, or lose it. Hang on tight.

1 comment:

  1. [...] seriously think this guy is either evil or completely inept.  Just a little over a month ago, the bailout package was announced.  Not even two weeks after he was able to trick everyone into giving him almost unlimited control [...]