Fiscal Cliff Suspense

The Fiscal Cliff issue continues and the markets are starting to get nervous. With just a few days to go, I'm not sure how they are going to pull this off. Last month a Fiscal Cliff deal seemed possible and probable, now days it is looking possible but improbable. But there isn't much we can do at this point but to wait. The key 1411 and 1413 levels were broken today by a wave I have labeled a "C", but the market quickly recovered these levels towards the end of the day. Ultimately the count or the trend in these few days won't really matter as the outcome will be decided by politicians and no one can possibly predict what is going to happen with any degree of accuracy.

I decided to "take my foot off the pedal" a little and sold 10% of my long term holdings to lock in profit and raise come cash. I could sell another 10-15% but I am going to see how HSI and China trades as we approach Jan 1st. Also, if the FC does happen then there will be bargains once the sell off is done and specially if the country goes into a recession. So in that sense, people who pay attention will profit from this either way.

Main S&P 500 Trends

Short Term Trend = Bearish

Medium Term Trend = Neutral

Long Term Trend = Bullish

Long Term Portfolio

• 90% Long in Red Chips traded in HSI (Mainland China stocks traded in Hong Kong) since September 2012. Only position trading 30-40% of portfolio for cost improvement. - Sold 10% on 12/27/12

Short Term Margin Trading Strategy 

• Bought 30 AAPL @ $509.50 as of 12/14/2012 on margin - Closed @514.50 on 12/17/2012. = +5.00
• Bought 1000 XIV @18.62 as of 12/13/2012 on margin - Closed @18.70 on 12/14/2012. = +0.08
• Bought 1000 XIV @18.80 as of 12/05/2012 on margin - Closed @18.88 on 12/07/2012. = +0.08
• Bought 1000 XIV @18.41 as of 12/04/2012 on margin - Closed @18.63 on 12/05/2012. = +0.22
• Bought 500 VXX @29.23 on 12/03/2012 - Closed @30.12 on 12/03/2012. = +0.89
• Bought 500 VXX @30.77 on 11/23/2012 - Closed @29..68 on 11/27/2012. = -1.09
• Bought 500 VXX @31.54 on 11/20/2012 - Stopped out @31.11 on 11/21/2012. = -0.43
• Closed position 500 @ 18.26 on 11/20/2012. Sold 500 @ 17.79, raised stop to break even on the other 500 as of 11/19/2012. Bought 1000 XIV @15.98 as of 11/15/2012 on margin - position trade cost improvement 4 cents, so net cost $15.94 as of 11/16/2012 - Profit = $2.05 
• Bought 1000 XIV @16.88 as of 11/14/2012 on margin - Stopped out @ 16.66 on 11/14/2012. = -0.22
• Bought 1000 XIV @15.67 as of 11/08/2012 on margin - sold 1000 XIV @ 16.25 on 11/12/2012 = +0.58
• Margin positions in Gold initiated 11/06/2012.

Net Profit since 11/08/2012 on open and closed short term positions = $2,625*

* Margin position is usually $15-20k

* Margin position in gold is $4k

Retirement Goal 

As of 12/18/2012 - 10.8%*
* Percentage gain for total liquid portfolio dated September 2012, Goal is to double portfolio for retirement by September 2015