Treading Water

I can't seem to make consistent forward progress and I am trying to determine why. I was pleasantly surprised yesterday when I figured the gap up would cause me losses but my balance worked out well and I ended up even on the day. I shorted corn last night from 370 down to 364. I decided to not let it go over night because I skewed myself short at the end of the day since we didn't really finish significantly over 1000 and figured I didn't need more risk to the upside.

Same old story today, gains at the open then turn into losses. This market will not go down and maybe that is my issue. I have been looking for a pullback since 950 and it has not come, which to be honest is completely ridiculous. But that is how the market goes sometimes, remember the old saying. I am still skewed to the downside currently due to the vehicles I am using, but have a decent long exposure as well and will increase it once we get a pullback, if it ever comes...

DSX was a pain today and I don't like the relative weakness. If this is a true recovery it should pick up and it is a synthetic long position so I am less concerned but the Baltic Dry index continued its downward flag and has not been able to get above the 50 day moving average. ADM released earnings and apparently people either didn't like them or just decided to take profits because it sold off fairly heavily on high volume. It finished nearly right at it's break out level of support so I decided to take a long position to help counter my shorts.

My positions were holding up fairly well until the end of the day everything fell apart. This happened with the combination of volatility decay making me lose even more money.

Everything I posted in the last post was essentially proven wrong the past two days. Things basically came in line to support the rally but we still remain in historically high overbought territory that will need to be worked off. We are at a point that I feel like any single piece of fairly bad news could bring us down in a hurry but I really don't see what the catalyst would be. I thought housing might be it but that likely won't be till next month as it was better than expected data today with people buying during the last rush of the housing season. Financials are starting to take over the lead which points to further upside. It could be good to go long financials and short tech since financials have lagged so far and tech is extremely overbought.

I am more and more tempted to make a larger portion of my portfolio dedicated to forex and commodities. They have lower commission and seem less prone to some of the things that happen in equities. I have visions(delusions) of grandeur following in the footsteps of Jesse Livermore trading cotton and wheat futures. One thing he may say is that I would be stupid to be short because "afterall, this is a bull market."

We will see how tomorrow shapes up, hopefully better than today and my relative strength and weakness plays will perform. I took a position in SRS to try and catch a snapback rally but catchign a falling knife is generally not a good idea but if you manage risk properly it can pay off when it works.

Total Return for 2009: 144%