Nosebleed Trading Session Update: How I Fared During One Of The Most Volatile Trading Sessions In Market History
Yesterday was a rough, tumultuous ride. I went from supreme confidence to getting bloodied up. If you remember, the BoomBustBlog traders recommended a grab for profits or a gamma hedge. I decided to go all in to FIRE sector short risk, with just a wide trailing stop to protect me. I was quite comfortable up to the last 40 minutes of the session, wherein it seems as if Bernanke's floor traders swept in to teach smart asses such as my self a valuable lesson. Fortunately, CBs can only affect the markets, they can't control them. All short biased positions flourishing today as that French bank run that I promised looks to be coming to fruition and that 830% One Week Armageddon Trade moves right along... From my Twitter feed:
ReggieMiddleton:All wide trailing stops are still in place, allowing me (barring a violent gap up) a guaranteed 300% on the SPX, although it was 800%.
ReggieMiddleton: Nearly all of them are better traders than I, but instead of selling vol, I'm buying further up the ladder of risk at cheaper prices.
Update, my OTM cheaply bid puts are being hit. I'm getting deeper in the [short risk] game. I will offer mini-reports on the companies in question soon
I went against the grain of both the consens and even the BoomBustBlog traders and loaded up on shorts in lieu of selling off profit and/or hedging. It was a bloody ride, and I was [mentally/emotionally] wiped after the Fed's intervention during the last 40 minutes of trading. Many of my FIRE sector and French bank positions were actually stopped out by the bell, making it difficult to even maintain a position with a semblance of risk management. I actually felt bad... You know regret, even though I moved wtih both the fundamentals and my gut. The following morning, my bold contrarian move was vindicated and we march on.
Let's see hear... It didn't work during the last market crash. Actually, I don't think there was ever a time when it DID work. Nevertheless, let's try it anyway. You can't sell insolvent companies short! As anticipated last week in our post Didn't Anyone Notice The Seemingly Irreparable Damage To The Eurozone Last Week? Global Short Ban, Here We Come!...
A timely tidbit from one of contributing BoomBustBlog traders, Eurocalypse, basically an extension of what was expoused last week in Timely Trading Tips For 8/5/2011,which I excerpt: I deeply hope your readers and yourself have benefited from the options strategies, market has been so quick; I dont know if it could be published in time. ...I'd recommend to take partial profits....
As those who have been reading me for a while know, I have been crowing about sovereing debt default leading to a European bank collapse, causing global contagion for some time. For those who haven't, reference last years posts in the Pan-Europan Sovereign Debt Crisisseries, or The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run...
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