Jul
23
2009

  Shorting the Market Again

I just placed an order for more DOG, it's an ETF that returns the opposite of the DJIA. So if DIA goes down 2%, DOG will go up 2%. The market rose a couple percent today, and over the past several sessions the rate of increase has been steep. I think it's unsustainable. My charts tell me it's a good time to short.

The market has been moving so quickly, it's not reaching full countdowns. So I'm buying (selling short) based on the TD Setup alone. It's only 9 days instead of 9 + 13. But that means I'll have to be prepared to sell on a 9-day setup also. I'm getting in even with vacation coming up. I can trade on vacation, no problem. It doesn't take that long for an individual trade.

I'm reasonably confident the market uptick is unsustainable, but less confident I'll be able to execute my sell at exactly the right time. There is more risk involved when using the 9-day setup versus the 13-day countdown. Nevertheless, I'm going for it.

My order at $61.55 might not go through (it was optimistic), but I've still got 15 minutes to revise my trade. My strategy calls for buying at the close, so it doesn't matter that I didn't get $61.55, as long as I get in today I should be ok. The last trade was at. . .$61.55. I guess my order did fill! I placed it five minutes ago when trading was around $61.64. Hmm, I wonder if it will close even lower. I'm tempted to buy more. But I haven't worked out the math for the exact amount of risk I should have on this trade, what my sell triggers should be, etc., so I guess it's prudent to not jump in too far. I'll just go with my gut choice.

And hope the market rally ends soon, and ends hard!!