The Volume Made Us Do It!

January 15, 2009 7:00 am

Through the end of December and into January, there was something very wrong about the “rally” and we were growing very concerned. Simply, there was a lack of commitment from buyers and as each day passed, it looked as though there was more evidence building that when/if the turn took place, we could see a nasty ride back down.

As the selling started, volume lifted and that was a clear signal for us to raise our short positions for both a hedge and a trade.

But before we invested, we marked the potential turning point for short entry as the Obama speech that would surely be anticlimactic as most of the information he could share about his magical plan was already circulating through news via a massive PR push.

Just as he began speaking, we opened trades in Proshares Ultra Short S&P (SDS) and Proshares UltraShort (SKF). Then we increased positions in MasterCard (MA), Almost Family (AFAM), Paccar (PCAR) and Short S&P 500 (SH). (to name a few)

Notes – Bought and Sold SKF as follows:

  • 1/8 Bought – $112.23
  • 1/9  Sold (1/2) – $114.75
  • 1/13 Sold – $133.05
  • 1/13 Bought  – $126.50
  • 1/14 Sold – $137.60

Those trades has helped to bring the TDIMG portfolios up 1.5% for 2009, while the S&P 500 is down 6.71%. (See virtual tour for more information and important disclosures)

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We also track the 5-minute and 10-minute and daily advance/decline line as we are concerned about the overall “feel” for the markets. This has been a great tool through the market turmoil as it has provided additional insight into the trend.

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