Shorting the US financial sector
So, I finally got around yesterday to do as I say (and have written about) and started shortening the US financial sector. My vehicle of choice is ProShares Ultrashort Financials (SKF), a 2X inverse ETF. I was pondering the Direxion 3X inverse (FAZ), and in retrospect it would have been better, because the banks started gliding yesterday and continued today (so I would have made approx. 50% more with FAZ). I wanted a ETF that I’m comfortable holding for the week thou, and a 3X is terrible if the markets whipsaw a bit (2X isn’t good either thou). I might switch if the trend is sustained during the week.
Results so far is 10.4% up on Monday and 8.0% Tuesday as of this writing (thou the day isn’t over yet).
Just found a blog from J.S Kim (very sound opinions in the past) that makes my move feel even better, although I did it some 30 hours before reading this. Lets hope we’re both right: http://seekingalpha.com/article/137132-u-s-bank-shares-pump-almost-over-get-ready-for-the-dump
I’ve also sold of all Swedish equities short of PA Resources convertibles and a small post in Malka Oil (quite the lottery). Still holding Avanza Zero (OMXS30) but if the trend continues another day it is gone (OMX closed down 1.79% today). I want to have cash when the serious blowback starts.
