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I Beat The Market Today


All the major indices closed down, and my trading portfolio closed up 1.01%. In fact, my entire E-trade account was up. (Full disclosure: my IRA account has a lot of mutual funds that reflected yesterdays up market.)

Monday I  made three purchases, all of which contributed to my account's increase. I had a bad case of sellers remorse with PAS, noticed it had a zacks rank of 1, and bought it again. It closed up 5.39%, and was up 7.48% overall. I purchased two options contracts, a put on KBH (a housing stock) and my old favorite, a put on DIA. Both of these closed up, although they were down from when I purchased them.

I feel better about the KBH option than I do about the DIA option. I don't think the housing market has hit bottom yet. There was a lot of negative news about housing today. Home sales are down 8%, and median home prices are down as well. This pushed down a lot of housing stocks, and hopefully they will stay down. As far as the DIA put goes, I'm not sure. This market could go any damn where.  I had some serious doubts yesterday when DIA and KBH were up. Trading options is a lot more psychologically difficult than trading stocks. With stocks and options you face the risk of the security value going to zero, but that's a deceptive similarity. The probability of a stock going to zero is extremely low, but an option is guaranteed to go to zero when it expires!

I was pleasantly surprised to see that my  Nasdaq Stock Exchange  stock (NDAQ) was up. I thought it would be down in a down market. But then I realized NASDAQ makes money when any kind of trade is done, whether it's buying or selling.

UDN (the dollar bear ETF) has been a disappointment. It has gone up an itty bitty smidgen, but not enough to cover commission costs (which are low). Maybe the dollar is out of the woods.

My "liquid assets" strategy is looking less silly and gimmicky all the time. I had mentioned earlier that PAS was up 7.48% over two days, and both of my oil stocks (HOS and BHI) are up.  Pepsi Bottling Group (PBG) was down, but not by much and is up overall 22.91%. My 8% trailing stop loss over has not  yet kicked in.