Develop Bearish Views

Building a bearish awareness has turned my portfolio around.

Playing the short side is now mentally as easy as the long side. Less waiting on perfect opportunities to go long, when short opportunities are plenty.

Am more aware of underlyings trading ranges before putting on a position. For example, seeing market highs in IWM, QQQ, and SPY leads me to look for short positions instead of going long.

VXX or UVXY

VXX and UVXY measures the volatility of the VIX.

They are both identical on intraday  charts. UVXY provides bigger intraday swings at a lower cost – better leverage on your daytrading dollars.

Zoom out to a 1 year chart, UVXY is a perennial loser due to drag. It gives up 4-5 handles compared to VXX even though they function exactly the same.

Maybe this is why UVXY cannot be shorted via shares while VXX can be shorted via shares.

If you are bearish and banking on a market crash,  then VXX is the better product for time horizons beyond a day with losing value due to drag.

Randomness

Assumptions can be right within minutes of a trade, or wrong within minutes, or takes a long time for it to be right, or forever wrong.

The game is to manage risk with the tools provided via options.

One of the few certainties in trading is that high volatility will contract, and low volatility will expand.

Took Loss on URBN

Took on a short URBN position that did not move with the declining markets.

Without a stop loss, the losses accumulated more than I expected. A setback nonetheless.

No more scalping of individual underlyings that are not ETFs or indexes because they don’t necessarily act right.

Scalped GPRO, and UVXY

Continued to scalp while overall portfolio value declines.

UVXY scalps have been batting over 1000%, and has been amazing how mechanical it is to get in and get out. Got in today after the AAPL presentation was over. While AAPL dragged the /nq lower, UVXY spiked a little.

I think the Apple Watch is very much Apple’s Google Glass. The biggest down side is that it needs be used with your iPhone. And who wants to charge a watch every night. Time will tell that this may fall flat.

Scalped GPRO. Took less profit after realizing that I had bad trade location instead of waiting longer. It was the right play.

ABBV, YY, AAPL, UVXY, CSIQ

Long UVXY at premarket 16.70 and dumped at 17.04 while it ran up to 18.50 – good results bad execution for a lack of stop loss.

Short AAPL when it was up 2% as the whole market was trending lower – decent results bad execution for a lack of a stop loss.

Short YY when it was up 8% while the market was down. Jumped the gun at closing out the order for .50 while missing out 2.5 handles because of paying attention to the noise rather than the charts. Good results bad execution for a lack of a stop loss.

Short CSIQ, tiny scratch for profit near close of day.

The recurring theme is the lack of a stop loss.

Long ABBV, one of my biggest losers for the past 2 days because I double dipped and went against the trend with a position that is too big. My scalping is holding up the portfolio value, but I don’t know if I can repeat the daily scalping results. This is typical of greed and fear.

The positive out of this is that it forces me to reevaluate my intraday plays more closely and cannot depend on holding plays overnight.

Product Indifference

It is important to be product indifferent so you don’t have to play the familiar underlyings when they offer no movement.

On a down day that is outside the previous day range, there are more opportunities for scalping.

Traded LL and VEEV for a nice profit. LL sells hardwood floors, and VEEV is cloud services for the medical community.

These two companies fell hard intraday, and was a decent gap fill play. Flat on both at end of day.

Sold some April UVXY puts as well.

Extremely Bullish on TWTR

Google will probably put in a bid on TWTR soon because Google Plus has not delivered on expectations. Google is in the process of separating out the photo feature of its social network.

Picked up TWTR shares in addition to selling puts.

UVXY and Market Internals

Been day trading UVXY using market internals such as ticks, /ES, advances to declines to indicate when to enter a long position and when to go flat.

So far the test phase has been successful, and it is one of few underlyings that actually act according to how the overall market internals are performing verses doing whatever it wants regardless of how everything else is doing.