Savvy Trades and Investments

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I'm not the one to ask on the markets as I've been way too defensive for many months now. Holding a large cash position when I should have been margined to the hilt. Luckily I haven't been shorting much since I got burned earlier this summer. But I think it's time to start. So many garbage stocks are flying 100%+ in a day for no reason. Total insanity. Meanwhile it's tough to find anything cheap on the long side. People shorting these high flyers have been annihilated. So it would only be small positions. Made a few bucks shorting AEY & LPTH recently. Should have gone in heavier on those, but too dangerous in this euphoria. Still prefer a strong cash position as defense.

Markets have gone into what appears to be a blowoff top phase since early November. The Russell in particular has made a ridiculous parabolic move. That's why I like TZA as a hedge. Market melt up probably continues next week. But I think things get tougher in January. All those people sitting on huge gains, waiting til January to harvest them and delay taxes by a year. The markets are priced for perfection...so any kind of delay on the economic recovery could be potential speed bump. There's a small chance Dems win both Georgia senate seats in a couple weeks...that would spark a sharp market selloff imo. But I think it's more likely we get a healthy & overdue pullback of 5-10% next month. Because if we just keep going up like this...we're going to get a much more severe correction at some point. Maybe even a crash.

I've still got plenty of longs but way smaller positions than normal. And keeping a mountain of cash. I always like to be a little cautious heading into a new year anyway. Taking advantage of tax loss selling opportunities for a January effect bounce always a good play. But you never want to start the year in a big hole (speaking from experience here ha). Especially with what I'm guessing are some outrageous capital gains taxes due in April for many of us.