Thursday, December 06, 2007

A Parent's Guide to Window Dressing

And the beat goes on.

The market is continuing higher (so far) today, following yesterday's follow-through confirmation. Volume by the end of the day was reasonably strong, which was important. Institutions are accumulating stock now, following the bottom put in last week; not surprising given the calendar (I said it again).

...Seasoned, salad-spinning window dressing for the year-end books. Again, can you imagine being a big institutional investor and having to explain why you didn't buy stocks like AAPL this year? What kind of idiot manager are you? And again, if you're an individual investor and have a big gain in a name like ISRG, do you want to sell this month and create an '07 tax event?

No and No.

Today's volume is pretty mild. We're all bracing for tomorrow's big employment report. Woot!

How big a deal is this report? Personally I'm more interested in what is for lunch tomorrow, however we will end the day tomorrow knowing what to expect from the Fed come Tuesday (even though what is for lunch Tuesday is still more interesting than that). I don't give a rat's kneecap about any of it. How the street digests all these lunches is perhaps meaningful.

I've got more stocks now than an old-school mutual fund manager, so I am going to get barbed pretty good if the market reacts negatively. My only recourse if that develops is to hedge as soon as possible with equivalent dollar amounts of Ultrashort index ETF's. I can't sell 15 names very well, very quickly, so when/if I get caught at a time like this I fire into the hedges and then start unloading my largest equity-name problems. If the portfolio isn't starting to improve, I cut more cancers as I see fit. I sell them all and end up short if I have to. I have no regard for stock humanity. I hate all stocks.

But I won't have to sell (much). I can't guarantee a gang buster rally from here, but I can surmise with confidence we are not about to rip limbs from torsos just now. This market made a reasonable bottom and we'll see whatever amount of strength we will see - going into the year end.

If there is a big move higher on the Fed action I could see banking some profits late Tuesday or early Wednesday. But then I will be looking to be fully loaded again sometime after the 17th (assuming a reasonable market, or else by about the 23rd if not a reasonable mkt). Ultimately, I will sell the lot of them in the latter part of the last trading day, December 31st. We can discuss how and why later. It has more to do with than me just hating all stocks.

The point now is to make as much as possible from the leaders. As far as fresh breakouts, there are a few more (ISRG, for example), but still not with sufficient 3-4 x's normal volume.

Since my longer post of yesterday, I doubled-up on HOLX at 62.00; I daytraded and sold all but a 25% position of MICC; I took profits on QID short (too soon); today I added back my tranche of YGE 29.55, I added another MR tranche, 38.69.

...Whatever, things are going fine. If I get nailed with all this stock, I'll still have had an amazing several months (wouldn't you like to know). I wish I had an app here to just show my current holdings, but I'm spending too much time trading lately and I'm about as good at building that stuff as I am at golf.

oohh, the Prez is talking now - Good trading!

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