Wednesday, October 1, 2008
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.