Wednesday, January 13, 2010
I have moved to 70% cash
It has been sometime since the market has had a healthy pullback. I have made some good gains and I think it is prudent to reduce exposure and be ready to buy the dips. I don't think the rally is over I just have that gut fill that it needs a rest. Over the past few weeks I have been shedding positions moving to a higher percentage of cash, currently at 70%. Could look to move to as much as 80-90% cash. I don't mind missing a move if I am wrong, but I don't want to be caught off-guard.
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I am now 90% cash going into INTC earnings. Only tech name I still have on is the 1 570/560 bull vertical put spread.
ReplyDeleteOther than that I have the short $85 put on XOM and the long $50 puts on RIMM.
Its a nice way to head into the long weekend. Very little risk. Probably won't play any OPEX plays this week but will check in on them to see how they do. Not sure I am comfortable enough to sell straddles just yet.
Oh forgot to tell you Jason, I closed out those PFE calls as my target was only $19.50.
ReplyDeleteI wasn't interested in the risk on the straddles but I did write down prices as of close yesterday on two of them so I could see how they ended up. I actually looked at my PFE calls today and realized, what is the exit point? I just bought 5 to follow along so I wasn't too worried about it.
ReplyDeleteSo on January 13th and 14th I had a gut feeling that it was time to move to cash and either sit on the sidelines and wait for the correction or wake up the bear. By January 14th I was sitting in 90% cash.
ReplyDeleteWhat did I do wrong. Well my last sentence of the original post was "I don't mind missing a move if I am wrong, but I don't want to be caught off-guard". Well being as active as I had been the past few months it was hard for me to sit on the sidelines and with in a week I was back to 75% invested to the long side.
This cost me a good amount of my hard earned gains from the previous 3 months. I was also making trades from cloud 9 as if I were invisible. But mother market did her job and humbled me in a minute.
I am going to try to spend some time this weekend trying to develop some guidelines as how to enter back into the market when moving a majority of holdings to cash. Or what to do when the complexion of the market changes. Do I try to play the short side, which mentally is very hard for me to do, or do I sit and wait for opportunity?