Buying SH to Effectively Short the Stock Market

We entered a market short position as a hedge on January 25.  Since then, VXX and HUV have both been over 16% higher.  As for the options, which we did not take positions in, the February VXX calls were a bust while the March calls popped as much as 80% higher. 

At the time we wrote: "We won't use a stop level as for us these are to hedge market risk per existing long positions (not diarized herein) in general equities."

This worked perfectly since our long positions have appreciated significantly while stock markets have gone much higher.  Meanwhile our levered short position in VXX, after offering good gains at one point, is now only slightly lower than our entry. 

We now wish to go from being well-hedged to net short the market.  We'll do so via SH, the ProShares Short S&P500 ETF.  It is non-levered.  Should markets continue higher without correction, we'll probably add a levered short, or sell off long positions, to become almost entirely short. 

 

Below is a chart of SH.  We hope that the lower trend line will prove supportive.  It's currently not tripping any bullish technical indications, however it would do so above the green line which is currently at roughly $32.

 

 

 

We will not consider a stop level for SH at this time.

 

We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the positions we do, or for mentioning any positions or companies in this blog. If we hold existing positions we divulge the fact. This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

Please presume that we, she, he, I, it, them, they, us and you are purely fictional characters and that everything written in this blog is satire intended for comedic amusement only and not to be taken seriously in any way. Just like "real" analyst proclamations. Thank you.


To be notified when this blog is updated : Please e-mail christianguinness@hotmail.com with "Subscribe to blog" in the subject line or click here to do so automatically if your computer is configured accordingly. We have never shared our mailing list with anyone, nor will we. Please note that we only send update notifications when a trade idea is diarized or updated, not if a blog entry only contains general commentary.