More Short and Less Long

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 |  Includes: CEAI, DVMT, SDS, USO
by: Thomas Kelly

I used today’s Fed debacle to lighten up my long positions and increase my short positions further. Here’s a summary of my trades.

Sells

(EMC) $17.50 calls at a premium of $2.65

(CEUA.OB)–Sold another 20% at $5.62

Buys

(NYSEARCA:SDS)–bought a small position at $52.75

(NYSEARCA:USO)–doubled my short at $74.07

My decision to fade the rally was a pretty easy one, because the Fed just completely eroded the confidence of the markets with today’s pandering action. Jim Cramer said it best when he noted that the people that today’s injection was supposed to help–C, CFC, WM–were all down big pretty much from the start. All the Fed did was give the big guys a chance to get out at ridiculously inflated prices, and left the little guy holding the bag. Despicable. These guys don’t get it, and we’re going lower because of it.

I was not pleasantly surprised by the huge spike in oil today, and it remained strong throughout the day. Tomorrow will be telling, because if oil doesn’t reverse lower as it has on the past 3 rally attempts, I may have to cover this position and take my hat out of the ring. The medium term supply demand equation seems to point oil lower (especially as economic growth falters), but in the short term this one has been gyrating wildly.