12 March 2009

Portfolio Changes

Sold off my position in TNA, the 3X-Bull Russell 2000 ETF at $14.18, from a cost basis of $12.90, for a gain of 9.9%

The R2K chart below shows the tremendous moves over two of the last three trading days. Now that the index is short-term overbought, as shown by the over-90 RSI(2) indicator, I thought it prudent to take some profits. I may jumped off of this bear-market-rally a bit too soon, but I can always put cash back in on a pullback.

Speaking of taking profits, over the past week or so, I built up a substantial position in FAS, the 3X-Bull Financial ETF. Today, my position in FAS is still significant, but constitutes a much smaller portion of my portfolio.

I sold off a block of shares in the early afternoon for $4.50, from a cost basis of $3.44, for a gain of 30.8%.

As the trading day approached its end, I unleashed another block of shares at $5.15, for a gain of 49.7%

Why? The mark-to-market hearings didn't produce any bombshells, but the subcommittee expects the FASB and SEC to report back within three weeks on adjusting the accounting rules. Three weeks is plenty of time to trade around a FAS position.

Also, if you look at the chart below, the financials are now significantly overbought according to RSI(2) and butting up against the trendline established at the start of '09. The XLF ran up over 10% today; I started to feel a bit piggish if I didn't cash out some of the gains.

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