Shorting Financials

Wednesday, October 21, 2009 | 4 comments »

I'm shorting financials over night. I'm long FAZ at 19.85. I had thought about shorting as soon as they filled the gap about two days ago but it didn't seem safe enough then. Financial stocks look like toast here. We've got a bear trap. A really ugly bear trap. A break of support and a shooting star here as it looks like everybody hit the panic sell button or either program trades triggered. When it cracked that support around 15.00s there was a pretty big move and no flag. That's why I feel pretty good holding overnight. I'm not trying to get much more out of it. I should be selling tomorrow if there is anymore weakness. The maximum potential downside for XLF is 14ish though. I like this set-up.

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full disclosure:long FAZ

4 comments

  1. Mark Perkins // October 22, 2009 2:08 PM

    cut loss on FAZ

  2. optionsnut // October 23, 2009 7:41 PM

    Hey Mark,

    I noticed a comment on my blog (today) which i rarely read or post to that mentions a book on early Buffett. Thanks i will check it out.

    you commented "that's what I'd be doing if i wanted an easy 10-30% a year.

    By that response, and by reading your blog, i'd guess your doing something different? Is it yeilding better results (take past 5 years average?)

    Derek

  3. Mark Perkins // October 24, 2009 7:21 AM

    Yeah, special situations as a strategy are really low risk. I've only been trading since about August of 2008. I've had some serious draw-downs but I've rebounded off them. Compared to my bagholding type investing I did before I learned technicals my trading strategies now have more upside simply because I can control my risk and losses.

  4. optionsnut // October 24, 2009 12:30 PM

    sounds like you follow what stockscores.com tries to do. If you don't you should check out his weekly strategies, which he emails out for free.

    He's all about technicals, managing risk and high risk/reward potentials.

    Due to not wanting to be constantly checking the market i have not used the above much, but its good to know what other strategies are out there.

    D

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