As we sold our SPY call options off in parcels yesterday I was using a mental stop loss that i was moving up as the S&P 500 raced higher. By the end of the day I said I'd sell out around S&P 1085 to protect large gains generated by buying in the 1060s Friday morning. We're around 1088 so I am going to make the move now; the S&P has put on a tremendous move in 6 sessions... normally you'd expect some back filling and consolidation after such a hectic move, but nothing is normal anymore.
Might be giving some upside away but I am going to sell all those index longs; the last 1/4th of the SPY calls (up roughly 60% in this last batch), and our entire TNA position which had been a 5% allocation and has rallied 4-6% in a session and a half. I sold about a third of the TNA first thing this morning north of 6% gains and the rest will exit now around 3.75-4.0% gains. So a melded average of under 5% for the entire stake of TNA ETF. (by the way TNA is simply a Small Cap index ETF, levered 3x its normal movement)
I don't plan on doing anything in the S&P 1090s; I'll let others deal with that stress - the easy kill has been made. The next transactions with the indexes will either be on a new breakout over the double top (north of S&P 1100) or on a more substantial pullback. Since we are in an uptrend and above all key moving averages we'll simply use our core equity positions as long exposure and buttress any downfalls with a good stash of cash. Shorting remains unAmerican (source: Ben Bernanke)
Period 12 is only in its 2nd day but we could effectively drink fruity colored beverages by going to 100% cash for the next 3.5 weeks with the realized gains in the first 2 sessions. But what fun would that be?