A Couple of Portfolio Moves This Morning

The markets are showing some pre-election nerves

Started the morning with 6% cash after liquidating almost all of my ProShares Short S&P 500 (SH) short hedge position yesterday (At least a day early! SMH). Purchased a 1% position in Twitter (TWTR) on post-earnings weakness. As Doug Kass refers to it; Twitter is a trading sardine. I take this to mean he looks to buy it “on sale” and then unload the shares later (hopefully for a nice profit), as opposed to “investing in the business” for the long term.

The company reported strong earnings per share yesterday, but user growth was disappointing. I started my small position at about $44.84. Currently the shares appear to be building a short-term bottom at about $42.00. I may pick up a few more shares on further weakness and tuck them away for a run back to the low fifties. Whether it takes a couple of months or a couple of years it should turn into a nice trade at some point.

The other thing I did today was purchase a small position in the QQQ November 13 276 calls on the morning weakness. Unless we see a nice bounce this afternoon or Monday morning I plan to hold these through the election. If we see an uncontested election (either way) I expect that we will see a nice market rally before these expire.

On any market bounce today or Monday, I will be rebuilding my short hedge position using (SH) or ProShares Short QQQ (PSQ). I use these hedges tactically to offset my long-term buy and hold equities. Typically my short hedges do not exceed 5% of the portfolio in total, but along with other holdings they help to dampen overall volatility.

This article is for information purposes only. There are risks involved with investing including loss of principal. The author makes no explicit or implicit guarantee with respect to performance or the outcome of any investment or projections made. There is no guarantee that the goals of the strategies discussed by the author will be met.