Another week of noise.  Not terribly surprising going into next week's Fed announcement, but still pretty tedious.  The only thing of any note was NASDAQ outperforming the S&P 500 by about 1% this week, continuing its long trend.  I'm going to make one small portfolio adjustment going into next week:

• Close the long Google (GOOG) position at 613.7, for a gain of $48.29

Even though I'm closing this position, it has the effect of increasing my risk, as the Google position was partially offsetting my short NASDAQ position.  On the other hand, it leaves me more balanced on the overall dollar devaluation issue (I had previously had a slight tilt towards further devaluation).  With the puts on the S&P 500, if the market sells off, I'd be increasingly skewed to the downside, which is what I want.

Current positions:

 

* Puts are on the S&P 500, dated March 2011, struck at 950

Results to date:

Wow, how exciting.  Next week should be much, much more interesting.  Monday and Tuesday will likely be completely dead, followed by an absolute explosion of activity once the Fed announces its QE policy going forward.  The elections may have some consequences down the road for the markets (hopefully they will, if the GOP gets off its ass and does something about all the fraud), but the Fed announcement completely dwarfs them in terms of importance.

My greatest concern going into next week is the NASDAQ outperformance.  While my focus is long term, I still need to account for shorter term trends that move against my thesis.  If, after the announcement on Wednesday, that position is still moving against me, I'll likely close it for now, reexamine that particular trade concept, and reestablish the trade later if I still think the concept is valid.  In any event, portfolio adjustments and rebalancing seem to be a likely event towards the end of next week.

Posted by: Hermit Dave at 02:25 PM | No Comments | Add Comment
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