It’s amazing how much can change in a month. Last August, everyone was running for the exits, contemplating selling everything they had. I even had some friends calling me up asking if they should liquidate their 401k’s.
My response to them all was homogenous, “Why sell, buy more!” There was nothing wrong with the economy, just China growth fears (which is nothing new).
Luckily, we sold BEFORE the correction in August, then bought everything back during the flash-crash.
The reason we sold was because I was going on my vacation to Europe, and the market was beginning to look ominous. After all, the fears that the 5-year bull market we were in was, “getting long in the tooth,” was certainly palpable among traders.
But then, when the market began its precipitous decline, we were buying ferociously into the carnage. But, believe me, it took some courage. UPRO falling up to 15% a day, at the time, was normal. See my adventures in the market, and more, from the historical month of August 2015, below.
Thankfully, the ‘gamble’ paid off in UPRO, as shares are now up 40% from where we bought back in the jam-packed McDonalds, in Nice, France (Subscribe For Access To Todd Akin’s Portfolio). I’ll never forget that day.
Admittedly so, we were unable to fully capitalize on the move up, since we only really had about 50%-75% of our money invested throughout the entire come-back.
We also lost out some due to the extreme volatility (about $1,000-$2,000 total), as we were shaken out of some of our trades; and our short positions, which we initiated as an insurance policy against a fall, were negatively impacted from the market rally.
Overall, though, I am pleased with our performance ($11,000 in a little over a month ain’t bad). It is just that, even though we were leveraged to UPRO (the S&P 500 X3 ETF), definitely making some good gains in the snap-back rally, it always hurts when you don’t get all of the move up, with all of your cash.
Game Plan Going Forward
Now that we have hit out exit target in UPRO of $65.00, we are selling out of half the position, and waiting for the next dip in the market to come (since we believe the economy is still sound, judging by the latest batch of earnings, positive unemployment numbers, and strong housing data).
If we move higher from here, we have enough on the table to benefit ($30,000 in UPRO) but, we are mostly in a conservative stance now, in over 50% cash, waiting to reload on shares again.
Update On JPMorgan (JPM)
The trade we initiated yesterday in JPMorgan is working nicely. Shares were up nearly 2% at the open, surpassing resistance at the 200 day mavg.
Remember, we were betting that JPM would get the benefit of the doubt and break through resistance, because it is a best of breed financial. Let’s see if this level holds before we add more. Updates to follow.