It was an ugly day for longs but if you have more shorts than longs today was a good day! It is all perception my friends and today was definitely a day for the bears. This is why we still have 35 shorts and never got over 13 longs during the previous “rally attempt.” This is also why longs NEVER made up 5% of my main portfolio (I did not even go long in my IRA or in my side accounts) and the most important thing is that the shorts are still the main part. Sadly, the main part is still only around 5% of my total portfolios but it is OK because that 5% of my portfolio is doing very well. I did not get properly short the downtrend due to two reasons: 1) It happened way too fast 2) not a single PERFECT short setup worked!. There were three perfect setups and they all failed. The good news is that the “near-perfect” setups all worked. But the biggest mistake I made was not thinking how bad it could get. For some weird reason I did not think it would stay this ugly for this long without ANY stocks rallying. I have never been in a bear market where not a single stock looked good and the few that do then setup, breakout, then breakdown. This is by far the worst bear market since the 30s. So it is very important that if you do attempt any of my longs to keep them small until you have me tell you it is time to get long. For now being short is the right side and by now EVERYONE should know what I am short as I have only posted the returns on the .net site a ton of times. Stay short, wait for proper short setups with volume, and remember rather you like it or not the smart traders are in cash or are short. If you don’t feel comfortable being short, then stay in cash. Why would you want to go long and force a trade when everything keeps failing like it is? I know I wouldn’t and I know that I am not. The short side is my friend and that is why we have had five shorts compared to three longs the past five sessions. All three of those longs are not working and we have already sold one completely. Compare that action to the five shorts. Four of those five are still shorts. The only one that failed was of course the one that I have been watching for a perfect short for a couple of months. You can either give up or fight. I always fight. I am down 2% for 2009 but in all my accounts combined finished up for 2008. So the way I see it I am WAY AHEAD of the “geniuses” that come on CNBC or host CNBC shows. That’s all I want right now: to outperform the best mutual funds right now. When the next bull market comes then the goal is to either triple or quadruple the best mutual funds return. So keep that cash heavy and don’t be shy to get short if we get any new shorts soon. Be careful out there longs. It is still not time and will not be until we have a big up day on BIG volume on the indexes.
new short positions: none
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