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What a bizarre day for my portfolio...

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June 12, 2009 – Comments (3) | RELATED TICKERS: SKF , FAZ

Aside from the freakish nature of the market of late, today showed me yet another squirrely side of Wall Street.  Today has been a relatively sideways day on the market trading in a relatively narrow band.  My portfolio on the other hand started in the red and only got more red as the day progressed.  Why is this bizarre to me?  We my portfolio includes to "short" positions in SKF and FAZ.  My understanding is that these are contrarian plays and that when their underlying sector (in this case financials) goes one way, these ETFs go the other.  So when everything is going red, I would expect them to be green.  Not so, today.  I don't mind a red day every now and again.  Allows me to add to positions should I desire or need to do so.  BUT today caused me to wonder what the ___?

Guess I am going to have to keep studying and learning in order to get a better understanding of these things. 

3 Comments – Post Your Own

#1) On June 12, 2009 at 6:00 PM, checklist34 (99.73) wrote:

skf and faz track the financial stocks only.

and they decay naturally over time so don't hold them very long.

to get a levered ETF that tracks the whole market just search for one.  It'll be something like Proshares ultrashort S&P 500 or some such thing.

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#2) On June 12, 2009 at 6:02 PM, alexxlea (42.92) wrote:

I trade FAZ/FAS exclusively. I was previously a swing-trader in companies with good valuations, but have jumped ship to chase rapid returns in this range-bound market. FAZ is levered 3x and attempts to track the movements of the RIFIN.X and its decay is much worse than SKF. Until we have a break to the downside that is sustained for several days you won't see them do much in a market like this, unfortunately, and your returns will get chipped away by decay. Also the RIFIN.X is weighted very oddly and you might want to look at the individual stocks it tracks.

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#3) On June 13, 2009 at 2:52 AM, ciahomia (< 20) wrote:

SKF and FAZ short financial.

today, there's a bit rally on the financial sector although it was not that much %, that's why its a down day for SKF and FAZ. to the "pro" correct me if this is wrong thought.

WFC, JPM, BAC up quite some%.

I was thinking to add position on FAZ earlier today, since I saw a lots of money flows in, but re-think again as I saw Bank of America showed some rally followed by most banks.

anyway, this is just my opinion, whoever has different opinion welcome to share.

 

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