Friday, January 18, 2008

Waxing Philosophical

Obv., today's open offered a more graceful exit for mash-minded, long-only whales like myself. Salt in my eyes and salt in my shorts (as in skivvy's) - salt and salted has been the theme for me this January.

Anyway, I'm taking a day off, following the cool drubbing of my leadership stocks. I'm steam-cruising to the (very)deep south as I write, having signed onto a 3-day underwater basket bob and weave seminar.

As far as the market, I'm not dialed-in at present. I have enough confidence to realize that I will know it when I see it, but we're at an important juncture at the moment and so far we have done nothing but failed when it has mattered (breaking almost all levels of support, etc.). I can no longer pretend to expect how it will turn out.

If rates were higher (instead of being low and going lower) this would be Dow Jonestown. It may be the beginning of a major bear anyway, low rates, election year and all, but at this point I still suspect it's merely selective depression.

To get aggressively long again, I really need to see the flush+reversal day on major volume. I'm hopeful we'll see that on Tuesday, but hope has not been a winning trade. The VIX is starting to wake-up at least and Tuesday is the first day following today's option-expiration - those post-expiry days can be quite nasty in a terrible market. Nasty + nasty + reversal would put me back into leadership longs.

To get short I need to see more of the erosion-action this market has been tracing (and then sell strength), but at the moment we are a little oversold to enter short-side plays. Also, the relative strength in the NDX remains (bullish) and the waking-up of the Semi-equipment stocks (KLAC, LRCX, AMAT, NVLS) which began the day Intel blew-up this week is still clear on the tape (also bullish).

In retrospect, I should have flushed-out my position on Tuesday, but that is just something I have to learn from, heal and move on. I had a huge month of December - blew it up in January. Fighting a shark and losing is not new to me, I'll pay tuition from time to time. But unlike some trading periods in my past, I try now to get out of the water when the beast is bigger than me. I can still yell expletives from the shore, whilst sewing-up my limbs and ankles. Club a pup seal or something when I can't take down the big stuff.

I'm no Ahab now. That sort of behavior is for folks younger (or older) than I. I'm just a long/short aggressive growth, frisky-with-the-risky trader with a temporarily sore lower back.

Hence the hiatus.

I dropped-out of APOL today. I'm left with a nursing home position (SUNH) and a closed-end Shanghai fund, CAF.

I'm sending inquiries to several Shanghai nursing homes now in case this long weekend doesn't put me on better tracks.

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