Down Day

I positioned myself too early by going short on SDS on Monday morning. An aggressive bet that is setting up to be a small gain. Yet I have not closed out the position so until then its still not a real gain. I may keep my shorts over the weekend, but considering how this market is affected by government interventions I may play it safe and close out my position.

On another note today the market panned out in favor of the shorts. This is probably the best day I have seen for shorts in two years. There simply was no bid on the tape and it want down just like a water slide. Nothing steep so no wash out but yet it was continuing down. This is dread awful due in part by reality of how the global economy growth is slowing.

Its amazing to so how many inverse short etfs have gained so much today.

SKF 46.25 +1.93‎ (4.35%‎) 
TZA 20.82 +1.39 (7.15%)
TYP 11.19 +0.83 (8.01%)

BGZ 23.15 +1.48 (6.83%)
MWN 25.37 +1.75 (7.43%)

It is very tempting to want to get into trades inverse ETFs and vise-versa with all this tremendous daily gains, but in truth these are terrible vehicles to invest in. Why? The funds are based on daily changes and in general the daily market does not move +/2% such as today:

S&P 500

1,325.51

-30.18

(-2.23%)

The gains I can achieve in one day by correctly timing the daily changes are like buying lottery tickets. The odds are not in my favor either. That is why I now do my best to avoid trading in these funds unless I trade in and out of them within the same day.

Good luck tomorrow.