A swift market upturn saw profits of almost Euro3,500 practically vanish in a few short hours.

Determined not to get into such a position again, I resolved to balance my account with a mixture of longs and shorts, a practice that has resulted in me being able to sleep better at nights.

So why, I've been asking myself, do I find myself in an almost identical position today? It seems all I'm doing is shorting. As a result, I'm going to be seriously in the money if the market goes down. If the bulls prevail, however, I'm going to be up the creek.

That's why, despite enjoying a very profitable week, I'm nervy at the moment. Markets tumbled on Wednesday, enabling all of my positions to show modest profits. I wasn't able to enjoy it. All I could think was: get long a stock and reduce your exposure.

Unfortunately, I couldn't "nd any long set-ups I liked. Markets have been strong over the past week and most stocks look overbought.

Some stocks haven't participated in the recent gains, but I couldn't bring myself to buy into these guys either. After all, if they can't go up when the market is rising, what's the point?

With the trading day nearing its end, I reluctantly went long Yahoo!

Ordinarily, I wouldn't have gone near it. But as I say, I needed to buy something.

As for my shorts, I've got four of them at the moment. I shorted Ebay last week and it's provided me with some modest gains. Unless the overall market takes off, it's unlikely to trouble me. That said, I'm disappointed that the stock has managed to hold steady over the past week. I'd hoped for some quick gains.

Ebay reports earnings next week.

No way am I going to hold my full position going into that, so I'll take some profits if the opportunity presents itself. If it continues to hover around the $34 zone, I may just close the position anyway. As I say, I don't want to be short this pup going into earnings.

Talking of earnings, Research in Motion has been hammered in the after-hours session after reporting results. As I write, it's off almost $15.

I offloaded the remains of my position at $145 last week. It climbed another $4 before receiving the above-mentioned slap. Some people love stepping in front of stocks before earnings. Me, I do the opposite. I "nd it nigh on impossible to predict and a bad call results in major losses. No thanks.

Ebay has not been my only counter-trend short. Amazon has been strong of late but it's in need of a breather and I went short near $42 on Monday.

It's not easy to step in front of a strong stock and I don't recommend newbie traders try such countertrend trades. If you do, it's wise to look at a shorter holding time and take pro"fis when they come your way (I'm looking to take a partial around $40.50).

Still, there's decent resistance at this point and I'm confident of some quick gains here. I could be wrong, of course, so I'm placing my stop loss at $43.40.

I'm also short - surprise, surprise - Elan. Readers will know that I've shorted Elan countless times over the past six months. During that time, the 200-day moving average has comfortably contained the stock. Accordingly, when it touched this level ($14.50 on Monday), I went short.

The stock's 2007 high is at $15.10, so above that was the obvious place to put my stop loss. It was threatened on Tuesday, with the stock making it as high as $14.90 before the sellers stepped in. Things were choppy on Wednesday, with Elan dropping 3% in the first two hours of trading before enjoying a modest rebound thereafter.

I'm up a nominal amount, but the trade could go either way at the moment. For shorts like me, it's a positive that Elan was unable to close above its 200-day average on Tuesday but a negative that it managed to pierce this level at all (albeit only for a few hours). I'm going to be keeping a close eye on this one over the coming days.

Wednesday saw me go short the Dow when it dipped below 12,550 (the low of the previous two days).

After eight up days in a row - the first time that has happened in five years - the Dow really needs a rest.

My reasons for going short were as much fundamental as technical, however. Wednesday saw the release of the minutes of the last Federal Reserve meeting. The markets have been pricing in an imminent rate cut and were hoping that the minutes would confirm this possibility. I was pretty sure they wouldn't. As I wrote a fortnight ago, the latest Fed statement showed "no hint of an imminent cut" and chairman Ben Bernanke has explicitly warned that "policy remains oriented to inflation control".

The minutes con"rmed I was right (you should have listened to the monkey, Mr Market) and we finally got some decent selling. I've already taken some pro"ts (a bit hasty, perhaps, but I needed to reduce my short bias) and lowered my stop loss from its original 12,650 to just above 12,600.

I'm quietly con"dent but still looking to reduce my exposure to the short side. Taking profits on my Dow short allows me to relax on that one, but the other positions are very much in the balance. If pro"ts come my way, I'll reduce my positions, thus limiting my downside in the event of renewed market strength.

I can't count on Yahoo! to balance things - after buying, I discovered it reports earnings on Tuesday, so I'll have to offload it before then. This hedging business is a pain in the posterior.

Weekly gain/loss: + Euro1,150 Overall balance: Euro41,000