IWM

[BigSully1]

It seems to me that if a person really wanted to hedge a microcap portfolio such as David's by shorting an index ETF, then IWC - Russell Microcap Index, with holdings having an average market cap of $390M would be a much better fit than IWM - Russell 2000 with average market cap of 1.3B. I don't believe any of his holdings are even in the Russell 2000.

Even so, I wouldn't be short on any of them at this point. Buy low, sell high.

Year-to-date returns

IWC              -9.00%
IWM              -1.75%

[BigSully1]

It seems to me that if a person really wanted to hedge a microcap portfolio such as David's by shorting an index ETF, then IWC - Russell Microcap Index, with holdings having an average market cap of $390M would be a much better fit than IWM - Russell 2000 with average market cap of 1.3B. I don't believe any of his holdings are even in the Russell 2000.

Even so, I wouldn't be short on any of them at this point. Buy low, sell high.

Year-to-date returns

IWC              -9.00%
IWM              -1.75%

Scratch those year to date figures, they are not correct. Outdated yahoo figures.

[David Randolph]

It seems to me that if a person really wanted to hedge a microcap portfolio such as David's by shorting an index ETF, then IWC - Russell Microcap Index, with holdings having an average market cap of $390M would be a much better fit than IWM - Russell 2000 with average market cap of 1.3B. I don't believe any of his holdings are even in the Russell 2000.

Even so, I wouldn't be short on any of them at this point. Buy low, sell high.

I agree with everything you say, I just don't know how you mix "buy low, sell high" with "the trend is your friend".

I'm going to cave in again, I feel this market is setting itself up for a big rally. I'm not sure if this is going to be the start of a new bull market (to me it would be the continuation of the old bull market after a very, very tough correction) or not, but I don't want to be short anything right now.

This position has been painful enough already and now bears have sentiment analysis and technical analysis in agreement and saying this market goes higher. The sentiment has been bearish but it appears it go to an historical extreme and even more important, as the market has been higher, bears didn't bail out, they're hanging on, hoping for the market to reverse.

It appears bears will pay a high price for their lack of flexibility. The following article, which isn't new but sentiment analysis isn't a short term thing, it may take several months for the chart to agree with contrarians, opened my eyes:

Was that the bottom?
Commentary: Contrarians growing more confident that bottom has been seen

And the charts clearly shows a double bottom pattern, both in the SPY and the IWM, as you can see below.

I'm not going to think more. I'll just open my mind to the bullish possibility again and I'll buy to cover IWM at today's open.

[soxguy]

David,like I said before,when everything is rosy and after the market makes a big upside move,that's when I would short. It's so contrary to human nature to expect bad news when all we see are blue skies,but betting against the crowd is the way to maximize gains. I added to my ASTI position under $9, and felt awful doing it. I'm smiling today.