I closed my shorts in early november at 919, and was resisting it (S&P is down 34+ % YTD) . It was a horrid Sep & Oct. However, S&P US market went down further, excaberated by the financial worsening. The auto big 3 companies in US was also facing bankruptcy. I expected them to be bailed out, but as always, the US congress needed some fighting before it got approved. S&P sank to 750+, just before I left for my trip. WHen I came back, it was going up almost every day (5-6 days continous) till 890+.
I shorted 10 at 870 on Monday evening. I was deliberating till the evening as I was busy with work to think through. But after going up for so many days, it was ripe for a fall. US unemployment figures was going to be released on Friday.
Monday dropped 8+% wipping of most gains the last week, Tuesday, it did not break and recover to 840+ and Wednesday 870+. I was thinking of covering, but heck wait till the unemployment data came out. Thursday it drop to 848 which I covered 5, and covered another 5 at 828 once the unemplyment figures came out. It was expected bad, and I quickly covered the rest. As expected, US market rallied on bad news to close at 870+.
I have to be very careful with shorting.
i) The market is now rallying on bad news with the short term low at 750.
ii) I expect the auto makers to be bailed out
iii) Obama wants to spend the greatest amount on infrastructure - Deficit is not important...big words
iv) 22 Jan is Obama ascendancy to his presidency... I expect a good rise till then
v) I find that those who have sold have already sold already, leaving inexperienced shorts.
vi) Things are likely to get worse with more bankruptcies on its way
vii) Just some personal feeling, experiencing the Christmas festival in the city, gives me a good/sombre feeling. Even if I have shares, I will not sell even if I was in a bad shape - next year willl probably be different
Portfolio down 6.8% this YTD. Celestial (my biggest holding) is now 36 cents, PE of 2.8. Longs 44%, shorts 5%. (A singapore share)
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