Profunds index and sector trading

[Namiar]

Thanks for the link Kanuti. If I get some time I will give it a try later today.

It seems that fears of widespread damage from Hurricane Rita are slamming the markets down today.

When tending to my own personal portfolio, I try to follow my models as closely as possible. But I have always held out that I may go into an override mode should some (non-financial) cataclysmic event wreak havoc with the financial markets.

I am trying to determine if this is one of those times. This specific event (a hurricane) is known in advance, unlike an earthquake or terrorist bombing. Therefore, DaBoyz are already hard at work trying to outjuke one another as to when to pull the string on their trade.

In the old days back when there were mobs of inexperienced investors to fleece, I might tend to avoid the markets until Friday and then pile in at market close. This given that Rita is expected to make landfall on Saturday morning. Then expect a drop-n-pop on Monday morning. Basically "short the rumor, buy the news".

But it is difficult to say at what point the hurricane will be priced in.

RAIM results will come out to max margin, to be sure.

But regarding my personal portfolio, I am leaning toward using the executive override, and playing a safer hand until Friday evening. I will reduce from my current 170% down to 100%, basically so that I will not be hurt worse that the market. Given that markets are getting extreme OB now, there is the possibility of an immediate rebound and I would not wish to miss out.