Wednesday, October 31, 2007

700 Clubbed Pup Seals

Ah, don't worry about me. When it comes right down to it the market will do what the market will do, regardless of what spouts forth from this mouth.

Being a short specialist - that's it, a short specialist! means you're going to get run over now and again...and again. The key is to maximize profits when things are working and throw the women and children overboard when you're getting the worst of it. Fortunately, I was fairly light coming in today.

Now I am super-light, as far as current holdings, as my index shorts are all off the table. And though I didn't get stopped on the oil-service trade, I did reduce there; taking profits on SLB and holding the worser looking GRP. I continue to hold retail shorts COH and DBRN. Oh, I added short Cramer's newest feature-stock GLW, today at the open. That one gapped-up 3% on His Cramer's claim of being "cheap" and there is a simple benchmark in the 50-day moving average just overhead.

I hate "cheap" stocks and I love shorting Cramer's foaming-mouth once he's jacked a stock up a few percent or more. It's usually a very short term trade for me, 1-3 days and has been +EV for many a month now.

That's it, I'm basically retired at the moment.

Wrong. You should know by now I'm jumping right back in this market at the first sign of weakness. I'm licking my wounds at the moment, HA!, but I'm not done yet. I'm committed to this trade - I'll bite this market to death! . We're in-between rounds and that is all. I'm still convinced the best opp right now is picking the right spot to short. I know, yup, the market is so strong, what could I be thinking? Well, this is how the charts are working these days (on the indices at least). The moment we confirm something is for real (whether it is an upside trend or downside breakdown) is the moment the market has been inclined to shift the other direction. A pullback tomorrow, assuming the internals are clearly negative*, means that I am actively and aggressively - shorting! Okay, perhaps not 700-Club giant GOOG, but I'll be clubbing the NDX in that case, to be sure.

If I'm wrong, then not much happens as far as my results go. I stay on the sideline for a short bit and miss-out on whatever spectacular upside the market can mange; that is all.

But I'm not wrong. This market is setting up for more than a good trade and when it is finally! good and ready - I will be there. It's what I do.

*by clearly-negative internals I mean the number of declining stocks are at least double that of the number of advancing issues; both on the Nasdaq and the NYSE. Volume on the indices should be increasing (distribution); NL's should be expanding vs. NH's; Down-volume should swamp that of Up-volume; Maria Bartiromo's mouth should not-yet be in a panic; etc., etc., etc.

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