Selling VXX / HUV +23% In One Month, Update On Recent Short Selling Suggestions

Today's theme is "reduce short positions".

Regular readers of this blog should not be at all surprised by the action in gold and equities of the past two days.  Rather you should be cashing in. 

On May 22 we purchased VXX which at today's close is up 23% .  The calls suggested in that post are up over 120% at today's close.  Not bad!  We're closing those positions.

At the time we wrote:

"Here in the middle of May we've reduced long exposure considerably and wish to effectively go fully short the market"

A few hours later that morning was the year's high, at least so far, in equities and the DJIA has plunged 5% since then ... at least so far. 

Our remaining market shorts include VXX round 1 from January 25 (currently at break-even), and SH from March 07 (currently down 4%).  We explained at the time that those were hedges, as we still had long positions to ride the bull market higher, while at this stage we're fully short equities only less so per the sale of the 2nd VXX position.  These will remain open without stops, until further notice.


If you're long DAVE, we suggest raising that stop again, way up to $13 and consider booking most or all of the gains now.  It managed to rise over 3% today and is now up 25% from when we suggested it six weeks ago.  Another thorn in the side of those who say we're perma-bears. 


On May 23, we posted "SJB Update, Plus Bonus Shorts; Facebook (FB), Best Buy (BBY), First Solar (FSLR) And 9 Others".

SJB is up 4% and we're comfortable staying long (by which we are short junk bonds - see here for more on that idea).  FB (Facebook) dropped 8.5% over the following two weeks, around which time we suggested booking the gains.  BBY (Best Buy Inc.) is 4.5% higher, and we still like it short with the same stop level we'd suggested however we'd not go shorting anything now until markets bounce a day or two. 

FSLR (First Solar) is down almost 17%  We've not checked the others from the article we linked to.

On June 02 we suggested IBM was a reasonable short, and it's down over 5% already and at least some of those gains should be booked pending a general market bounce.  It is just above the uptrend we drew on the chart (see link) and we suggest the market warning in that posting is worth re-reading.


With respect to yesterday's post, we're much closer to a bounce in gold and silver.  We bought a few shares of NEM, GDX, DGP and AGQ during the session today, and a bunch of calls in each into the close which was at or near the day's lows.  Calls were for July and September expiry, slightly out-of-the-money.  We'd be more aggressive buyers tomorrow if precious metals drop further, while fully understanding:

1. A much bigger cascade could easily be underway in which gold or silver drop another 20-30% over the next day or two, and...

2.  Both will very likely go much lower in time, so we're making very high-risk speculations on a bounce and nothing more.  There is no "value play" whatsoever to be had for actual investors in metals or miners, especially not in these fast and chaotic conditions.

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 publicly traded 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.

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