Clear Trades

There is no doubt that Geithner’s lack of a plan, lack of details, and high expectations set prior to the speech killed the Financials on Tuesday. I have placed big bets on Financials, mostly in anticipation of good news from Geithner, as many folks had judging by the run up in Financials on Friday through Monday.

It’s not all bad news though. In my opinion, short of announcing Nationalization, the speech was about as bad as it could possibly get. That may have marked a bottom in the Financials, at least for the short term. I bought a little more that day, though I bought too early in the day and missed the subsequent lows reached after the speech.

Here are a couple of great articles on the Geithner Debacle from CNBC:

• Geithner’s Flop, Obama’s Fault, by Dennis Kneale
• Is Tim Geithner Ready for Prime Time?, by Larry Kudlow

Overall I’m still bullish on the Financials. I think the reaction Tuesday was deserved, but likely a bit over blown. I really don’t think the situation is as bad as it feels anymore and I expect to see that play out over the coming weeks and months. However, I will be trimming back my exposure to individual institutions and replacing those positions with ETFs in order to lower my risk a bit.

Commentary

Went long 150 shares of Barclays PLC (BCS) at 6.57.

I think BCS is one of the safer Financials to hold right now and I thought I was getting in at a good time on the price. Unfortunately, it continued to dip further after the Geithner debacle, but I still feel confident at least over the short term holding BCS.

BCS, Buy

Went long 200 shares of XLF (Financial Select Sector SPDR) at 9.50.

The XLF is a Financial Sector ETF. I already hold some shares of the UYG, which is another Financial Sector ETF, but I now plan to send more money to the XLF instead.

I bought today because the price dipped (though I could have waited a bit longer for the aftermath of the Geithner debacle). I plan to replace my individual bank holdings, such as BAC, over time to lower my exposure to individual banks, though I remain bullish on the Financials and I will seek to diversify by holding ETFs instead.

Buy, XLF

My Weekly Realized Returns Report is a way for me to check my progress and see how I’m doing in terms of real dollars. After all, those are the ones that count!

For the week of Feb 2 – 6, I realized a loss of -$185.33. These are my first realized returns, so my all time total (since January 28, 2009) is -$185.33.

For purposes of this report, realized means the actual net dollars of closed positions, after commissions have been subtracted.

Weekly Report

*Note – I made this trade before launching ClearTrades.com so the details are a little light. You can expect to see more information on trades made in the future.

Sold my 25 shares of SDS at 77.62.

The market was lower for the first couple of hours of the day, but I was too late in seeing the reversal. I could have sold this in the morning for a nice little gain. Instead, I finally ahd to give up hope on a further decline and take my losses so I could move on.

Realized a loss of -$70.27, for a return of -3.51%.

Losses, SDS, Sell

*Note – I made this trade before launching ClearTrades.com so the details are a little light. You can expect to see more information on trades made in the future.

Long 100 shares of SSO at 22.77. I’ve traded the SSO a lot this week, but as of this trade I wasn’t holding any.

Once again, I’m trying to time market momentum. The good news is that this was a good price to get in at. The bad news is that I could have held my original position and been better off, saving the loss on the SDS and saving all of the extra commissions.

Lesson learned- if I’m going to try to time the market I need to be a lot more deliberate with when I buy and sell. I’m probably better off being more patient and giving it some time. With any good news next week I think we are still heading up nicely so I plan to hold on to this one for a little while longer and I think I should come out ahead in the end.

Buy, SSO

*Note – I made this trade before launching ClearTrades.com so the details are a little light. You can expect to see more information on trades made in the future.

Sold my total long position in DIG, 50 shares at 29.00.

DIG was still looking pretty good, but I wanted to put the money elsewhere and I had a small gain so I took it.

Realized gain of $37.99, for a return of 2.70%.

DIG, Gains, Sell

*Note – I made this trade before launching ClearTrades.com so the details are a little light. You can expect to see more information on trades made in the future.

Long 200 shares of UYG (Ultra Financials ProShares) at 3.07. I would have bought more, but I only had enough cash in my account for 200 shares and I wasn’t ready to sell off anything else at the time.

UYG is a Financial Sector ETF. The financials were really taking a beating up to this point, but the news started looking better and better. It sounded like nationalization of banks was definitely off the table so I decided to add more Financial sector exposure (to go along with my large weighting in BAC).

We should finally get word from the Treasury on Monday (CNBC – Treasury Still Honing Wide-Ranging Financial Aid Plan) regarding the Financial bailout (or whatever they plan to do) and as long as nothing crazy pops up I think this will trade much higher over the coming week.

Buy, UYG

*Note – I made this trade before launching ClearTrades.com so the details are a little light. You can expect to see more information on trades made in the future.

Long 25 shares of SDS at 79.87. In case you don’t know, SDS is the Pro Shares Ultra Short S&P 500 ETF. You buy this because you think the market is headed lower.

I saw the market turning in the afternoon so I sold my long position (SSO) and bought the SDS to make money on the move down.

Buy, SDS

*Note – I made this trade before launching ClearTrades.com so the details are a little light. You can expect to see more information on trades made in the future.

Covered my short of WFC, 100 shares at 18.67.

I’m not sure why I covered this so quickly. I guess I got scared. I missed a few dollars of downside the following day. This one was a mistake and I should have seen it coming. Lesson learned- be more patient and allow for more of a loss before getting out. I think the pressure on my BAC shares at the time scared me a bit and I didn’t want to end up with another financial loser.

Realized gain of $4.18, for a return of 0.22%.

Buy to Cover, Gains, WFC