Thursday, September 04, 2008
I'm focused much more on shorting this week, unlike the previous week's long-side ventures, but I am keeping to the theme of very short-term trades.
Quick and dirty with the meek and mealy.
The market may be in a ho-hum stage, given the lack of any major volume on this decline, but the action we're seeing is far from inspiring and given the calendar month I would not bet against things getting dramatically worse before getting better.
I'll be updating my (hit) lists soon, but those on the short-side (from previous post) are still quite live. On the long-side, I would eliminate anything at all related to commodities. In fact, at the moment I would not consider trading long anything except specific medical or biomedical types which are exhibiting clear resilience of late. Many of these are still viable.
Particularly concerning in recent action, virtually all leadership groups are getting maimed while road-kill types show signs of life. In other words, money is rotating out of leadership and into already beaten-down names; and cash and bonds, naturally.
The market's half-full glass, whereby the broad market and leadership groups were holding up while financials, airline and housing realms were obliterated, just became half empty; since now we've seen a huge bounce in things like airlines and housing, but coincident with first, distribution in the leadership names, and now a genuine drubbing in those concerns.
Did that make sense? Simply put, the cream at the top is now sinking; a potentially deadly trend if it lasts. I find that more important than any assurance from the fact that the market's shit is stinking any less.