So since I wanted to post a message on another blog, I was forced to sign up for an account since they no longer allowed anonymous posters, and with every account comes its own blogger. So I figured I'd try to add a little bit of my thoughts for the day (or week, or month, depending...) and hopefully I get a hit per week (or month most likely) with a response to my thoughts. So here goes my first post. The topics will be housing and the stock market.
First, I'll talk about housing since the Feb existing home sales numbers came out this morning. They were higher than the estimate (3.9% increase YOY). That number definitely gave me whiplash as I spun my head towards the tv (on CNBC) in a violent fashion. I was thinking, "No F-in way!" I was shocked b/c I was still holding 200 shares of QID (2x inverse ETF of the QQQQ) , but more on this later. Then they continued with the other details: decrease in median home price, increase in inventory, Feb sales are from Dec and Jan signings and those saw a jump because of unseasonably warm weather in the northeast. In case you haven't guessed it yet, my interest in the housing market is due to my current search for my (and my fiancee's) first home (our first home I should say!) So my thoughts on the numbers today were, "I wonder if they include short sales, bank auctions, and foreclosures as part of that number." Your thoughts?
So back to my 200 shares of QID. I'm a hobby stock trader/investor (ie I have some money that I have been placing on the table in the world's shadiest casino, the stock market.) Now I won't be quitting my day job anytime soon to pursue this hobby, but I've only been doing it for about 2 years now and I'm in the green for both years, so I'm not complaining. Anyway, I've been betting against the market since it's huge run up in the presence of some negative economic news (in my opinion.) To do this, I've been in and out of the Proshares Ultra Inverse QQQQ Exchange Traded Fund (Ticker: QID). Essentially, for every x% the QQQQ moves, the QID should move 2x% in the opposite direction. My first trade in the QID was unsuccessful, but luckily, I got out with a minor loss. Then for the next 2 months, I was in and out of QID for 3 round trips and went green each time. I went green on that first trade with the help of the market meltdown on Feb 27th, in which I was actually down about $600 the day before. The next 2 trades were short term trades (1 day trade and another swing trade) which both ended up green as well. Then I got greedy, had a lack of discipline, and rather than walking away with a minor loss, I'm now down almost 7% b/c of Wed March 21's blast off of the markets. So, I'm looking at trying to wait it out to try to get back a bit and cut my losses (which will keep me green for the year at least), with a max pain of a 7% loss. However, my thoughts about the markets now are, "It is just ridiculous that the markets keep going up in light of inflation (food, gas, EVERYTHING!), devaluation of the USD vs the Euro (down 25% since 2002!), negative savings (ie people essentially living month to month and then some,) the housing situation (subprime fall out, increasing inventory, decreasing values, foreclosures, etc.,) and of course, the geopolitical events." I've recently read about this fairly unknown government agency called the, "Plunge Protection Team aka PPT," whose role is to provide liquidity to the markets via flipping on the money printers and letting them run overtime; by providing liquidity, I mean buying and buying stocks as the markets start to decline. Oh, I also read that although the PPT has been around for awhile, GWjr. has the PPT on active duty b/c he doesn't want the markets to decline "on his watch." Your thoughts?
