Thursday, April 16, 2009

Full Tilt

With the market showing irrational exuberance, it can drive the bears nuts, causing them to make moves they would normally not make like selling out of all positions, doubling up, or even buying out of the money puts the day before OPEX.

In poker, we call this Full Tilt. And tilt is exactly what is happening to this market. The media is playing along by spinning any bad news into good news. 610K new job losses is suddenly a good thing. Lower retail numbers is good. Bankrupt REITs are good. It's all good.

Well, based on having some free cash and based on a little tilt action myself, and based on some TA that says this market needs a solid correction near 870, I am throwing some cash into the short side once again via SDS. SDS does not appear to have the same decay as other ultra short ETFs and there is certainly more downside risk in the market than upside potential from here.

So, call it Full Tilt if you want, but this poker player is playing the odds and entering the first new short position (other than put options) in a month.

As a disclosure, I currently hold SRS, SDS, EEM, GLL and TBT. I also have some June and May puts on VMW, GOOG.

I know this market has the shorts scared, but now is the time to start jumping in as a bear. I think this cycle is about over and a new bear cycle begins very soon if not tomorrow.


  1. I have to agree with you, picked up SRS today, we will see in the next few days.

  2. Congrats on the Blog Beamer, I check it daily.

    Gotta love the poker analogy...

    I too am holding a nice amount of SRS. Added some TZA as well. Check out the rally in the Russel 2000 since 3/10...

    Should be an interesting Friday. OPEX, Citi, and GE.

  3. Beamer Dog,

    Can you please give me your opinion on FAZ versus SRS for the expected big pullback?


  4. Beamer Dog,

    Thanks for your detailed & thorough post on FAZ & FAS!