Captain Packrat (captpackrat) wrote,
Captain Packrat

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Mr. Bernake's Wild Ride

Logged into my brokerage account this morning and saw that the market had opened up about 1/2%.  Knowing that more often than not, when the market opens big, it'll close lower, and knowing that the past several months the market has closed lower on Friday (and this is a Friday before a 3-day weekend), I decided to play against the market.  I bought 1000 shares of DXD, the ProShares UltraShort Dow 30, an ETF that uses short-selling to make money in a bear market.  The Dow Jones Industrial Average was at about 13,350 when I bought in.

Despite what I would have thought to be discouraging remarks from Fed chairman Bernake and President Bush (at least it seemed non-positive to me), the market started climbing, reaching a peak of 13,428, sagging a bit, then climbing back up to near it's peak with just 15 minutes left in the day.  At this point, I was down nearly $600 on DXD.  Of course, gains and losses don't count until you actually sell anything, and I was certain things were going to turn around.

And in the last 5 minutes, they did.  The market fell about 75 points from its high, ending the day slightly below where I'd bought in, giving me a gain of about $150 on DXD alone.

Whew.   Wild ride, indeed.

I'm planning on hanging on to DXD at least through Tuesday.  Ford and GM, two of the 30 DJIA components, will be releasing sales figures then and scuttlebutt has it they won't be that great, which should knock the Dow down a bit.  I'm also betting on some profit taking after the past couple bull sessions (which had unusually low volume) and the fact that historically September has been a bad month for the market.

The VIX is still pretty high (23.38), so the ride is likely to be rough for a while.
Tags: stocks

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