Late Night Thoughts-"Big Money Blues"

I am so glad right now that I'm not "Big Money." Big money has got to stay in this market, in one form or another, no matter what. When someone gets paid to manage money, he or she can't report back to clients, "I'm 100% cash. This market sucks and I'm not touching it." In fact, I don't have to justify my trades to anyone, except to myself.

Big Money is still trying to unwind positions, and everyday they are losing more and more money. It is absolutely one of the most unsung advantages of the retail trader that he or she can usually liquidate an entire portfolio over the course of a day or two, often paying very little in commissions. Big Money takes weeks to get repositioned after a week like last week, while it may take me a day or three.

Anyway, for tomorrow, I will exercise my right to be quick and nimble-footed in the markets. While I suspected that we might get a bounce tomorrow, the meltdown overseas continues which should buy us yet another down day. If you are looking to get short, you might have 1-2 more days before the first spike up. The patient trader may just wait for the first spike up before initiating or adding to any positions.

While most traders out there are familiar with the QID, I haven't seen the DXD mentioned often. The DXD is the double-inverse ETF for the Dow. It has recently seen a surge of volume, and the added liquidity should make it more popular. The SDS is the same for the S&P 500.

Just remember that any shorts of the indexes initiated at these levels will probably go in the red on the first upspike. Never fear, that is when you add to the position. When the spike-selling takes over, you'll be glad you did.

I am also closely watching the FXY. See my post on the Yen Carry Trade at Fly's blog. It seems as if the Yen might have enough juice to provide some bullish movement to help balance out global market bearishness.

So, I can trade tomorrow, but I don't have too. And if the whole thing gets too much, I can go 100% cash and close up shop until things stabilize. But then that wouldn't be any fun.