DUG OUT, TWM UP BIG.

I got stopped out of DUG just under 34 on the oil inventory news. Fortunately the position wasn't too big. I am rethinking my plan on it and will not re-enter until I look morel closely at what happened here.

The US still consumes almost a quarter of the total world's oil supply so I have to believe that a slowdown in the US economy in earnest will have to effect demand/suppl and prices at some point.
http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption

Also any stabilization attempt of the dollar will shoot oil prices down and DUG up short-term. Still... when will this all happen? I didn't set my stops tightly enough on DUG and now it is near its all time low and I need to re-examine what happened here before re-entry. I made a lot on the bounce from 38 to 42 earlier on twice the share count. Did I get lucky then or unlucky this time? I am now about break even (slight loss) on my DUG investments. Well it's really more about: were my convictions strong enough and did they change? I do like the DUG and I know why I got into it but I admit to being wrong and I base my stops on how much I am willing to lose before rethinking my position. I may come up with the same answer but when my stops are hit it means that I was wrong enough short term to cut my losses. The range of the stop depends on my conviction. I don't like to have to get lucky so no re-entry until I examine what happened here and what I missed. Especially when there is much less risk shorting the overall market in the intermediate term. Why play with timing in the DUG when it is in full bear (oil stocks in full bull) mode until either the worm turns with volume or better oil goes to 115-120 or above and xom is at 95+... I need to do some more work here...

On the other front TWM has had a very very good day. I have to remember to stick by my own rules and play the high percentages. The DUG is much more unpredictable in the intermediate term than the clear chars on the short overall market ETFs.

Good long swing traders would have sold their longs early today in many stocks...

I am glad I have no long positions at the moment. If I did have any it would be Agriculture or Medicine or maybe a small position in a pharma stock. None right now though...
I have a whole post being worked on regarding rules for this market. When I follow them they usually work... for another post...

Current position:
TWM only.

BTW this is one reason I like TWM over other shorts...
http://online.wsj.com/mdc/public/page/2_3021-peyield.html?mod=topnav_2_3000

Trailing P/E over 50 in a slowing economy that hits small name stocks hard...
Best,
Jon

This blog is for informational purposes only. It does not give investment advice.