Saturday, August 04, 2007

It is what it is - why ask why?

Its human nature to try to figure out why the market is doing what its doing, but in reality, does it really matter why? Answer: no. It only matters that it is. Knowing why it does what it does never made me any money. Only reacting, taking action. And you have to decide to react or not. And you have to decide what will be your strategy, what will be your signal?
Hopefully you have a method that has an edge on the market, or you’ll blow your account. After all, isn’t that the markets goal, to separate you from your money? Any investor or trader who survived the dot.com meltdown after 2000 knows ‘buy, hold, and forget’ doesn’t work - unless you’re Buffett - and have 43 billion you need to get invested. Nice problem.
My long position in ProShares UltraShort QQQ (Ticker: QID) has turned into a hedge - my other holdings go down, as it goes up. I guess that beats taking the full brunt of this markets torrid downturn. These late day swan dives make everything move, BIG! Score: IBKR down 4.24%, QID up 4.35%. And their both still flashing ‘buy’ signals… for now.
Like every other trader, I constantly scan the universe of tickers, looking to the sectors moving up. It was right in front of me, but I missed it - Bond ETFs (AGG, IEF, SHY, TIP and TLT). They’re still looking strong, only now they look a little extended. I missed it because I’ve never been into bonds. Why chance loosing money for 5% interest when cash pays that too, and there’s no downside to cash. Maybe I’m missing something. It is what it is – why ask why.

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