Satuki @ Home

First and foremost, there is nothing bad about shorting stocks. Shorts are just as patriotic as longs. The valuation of stocks in the dot.com era was 100 times more disgusting than what we have today. No one thinks that those guys who pumped technology stocks left and right, day and night were as “despicable” as shorts. Shorts can balance the market by busting bubbles and holding up the market by short covering. Of course naked shorting is totally prohibited. OK,let’s get over this morale obstacle about being a shorty. Onto stocks……

X( United States Steel Corporation) dropped fantastically today by about -13% ,outperforming both POT, Potash Corp (-11.82%) and NOV, National-Oilwell Varco(-4.99%). If you have been reading my blog, You know where I shorted it and totally messed it up. My system generated an exit signal today for X @ 32.93. Of course, I do not have anything in X to exit. Look at the daily chart of X. it is such a beautiful text-book set-up. It has evolved into such a standard double top formation in which the right top is slightly lower than the left one.

POT and NOV dropped with the big market. My first attempt to short POT @83.49 failed. I lost about $269 in it. When I saw it gap down this morning with such a big volume, I knew there was money in it on the short side. I did not hesitate. I did not even spend a minute thinking that my first entry @ 83.49 was much better than my second @ 80.37.

Let’s go back a bit to my last trade. For my last short trade in POT on 1/07/2009, not only did I end up losing money , but also I let go around 400 profits since it dropped 4% right after the market was opened on 1/8/09. It takes some willpower here to reopen a short position. But I made it. This was a winner as you can see from My Portfolio , I made around 800 dollars in POT which was much bigger than the loser.

As for NOV, It was a textbook set-up. There was nothing special about it. I reminded my readers a few days ago that it was time to short crude oil. Crude oil stocks went up too fast and nothing about the recession changed at all.

From now on. I will change my strategy slightly. I will reduce the size of my positions to 5000 per position and increase the number of my positions up to 10 per day. I need to cast a bigger fishing net. Let’s see how it works out.