Global stock indices at an important juncture

The global stock indices are currently at an important point. I am very bearish on stocks but long some individual names and also long some Asian markets. I have been bullish on Gold for some time and exited that position rather close to the recent high but I am not looking for another entrypoint into that instrument currently.

I have a short position in $SPY which I added to today and yesterday since I have a very good point for my stop loss. This is a longer term trade but when adding to the size of the position I can put stops for that addition just above the most recent highs.


The high around 18,000 for the Dow is important to me and I am going to lean against that level for now with my short.

Futures driven selloff

The S&P 500 Futures are indicating down more than 15 points on the back of the news regarding Ukraine. At the end of the week we have the US jobs report which is adding even more worry to the marketplace. If we continue to get a selloff into the middle of the week I will view it as good opportunities to add back into the names where I took profits into the last weeks rally.

So far there is nothing that would suggest falling corporate profits in the US or in Sweden because of Ukraine and that should be our stance going into the week.

Stay safe!

A zig zagging week!

The past week has really been exciting with a lot of cross currents. Several times during the week I Tweeted about my hedging strategies using the $SPY which is the S&P 500 Tracking Stock ETF. Since my world view is that the US economy is in recovery and the fact that I want to build out some of my stock positions I do not want to sell anything if I think that the shares are actually getting cheaper. Still, I do want to be able to profit from the back and forth action and protect my holdings on the way down and that is why I am trading short in the $SPY.

2014-02-01 15-45-41

The first column in the image above shows the symbol of the stocks which I am long or short and the background reflects if it is a short or long position. The $SPY shows that I am short a position which is now equal to 12 % of the portfolio, during the week I was short up to 20 % but covered almost half into the down opening during Friday. I also took some profits in $UA to raise some more cash.

To summarise the portfolio reached a new all time high this week even though the general market has been going down now for some time and I have only had long positions. This means that those long positions which I hold are actually performing better than the rest of the market and I have also managed to hedge effectively using the $SPY.

During the coming week there is important economic statistics being released on friday, the employment number, and I think that the market could be nervous in front of that event. Thus I will continue to hedge by fading the rallies and covering into the dips.

Happy trading!

A short update

Because of time constraints I will only post a short update today. As I posted on Twitter below this morning:

I went short the S&P Futures when I woke up because they looked as awake as I was posting a few point gains in the morning. For us to have a real bottom we need to see some more panic and this is was not it.

Once the market opened I switched to shorting the S&P 500 tracking stock with the symbol SPY in order to be able to balance my portfolio a bit better than I can do with futures because of the contract sizes. When I used to manage money I bought or sold up to 500 contracts of the S&P 500 mini futures at a clip representing a trade value of $45 million in each trade, this is not the case now though for my private portfolio and thus the SPY give me more flexibility.

The market continued to drop but I did not see any panic in the marketplace so instead of covering my short for a nice profit during the midday in the US I kept it but instead bought some shares of Google (GOOG) to build my position there, I also added to my Nike (NKE) position.

The market then bounced and before the close of the day I shorted some more SPY to protect me against the Apple report (AAPL) which was due after the close and I am long a little AAPL. Apple was disappointing and tumbled 6 % in the afterhours market and tomorrow it set to possibly be a very negative day and I might end up covering some of my short SPY.

Apple is not very exciting and there is no catalyst for the shares but it is cheap.

Remember, we need more pain in the market for it to bottom out but the US economy shows strong signs with good numbers from Caterpillar (CAT) this morning!