Friday, February 20, 2009

Let Them Live (for now)

Alright, it was a good thing I was waiting for the last 90 minutes to go completely medieval with index shorts.

Prior to doomsday on the clock, the market goosed higher with merely a whisper from the Treasury (and perhaps a back-room PPT plunge). Nothing entirely substantive really, but as I'm standing in front of no freight trains in this market I shifted my allocation...all the way to slightly net-long.

Even the really great plans change sometimes, what can I say? I put my false-fangs back in the medicine cabinet and harpoons are leaning-up again in the corner. I'll write more about the market over the weekend. I can't say I like it, but instead it is a question of when and where to get more short.

The Gold short is still an early idea, but it is certainly interesting. There are terrific divergences in the technicals; the space is absolutely bloated (crowded); virtually every head on CNBC talks about gold (I took my first stab at GDX short in the aftermkt just now as they were wooing it up almost 2% from the closing pr. on Fasmoney; every 3rd commercial on CNBC is related to gold; the miners stall before the metal, traditionally and they are diverging terribly; and the IMF could potentially end up a seller soon to pay for bailing out E.Europe. [I'm writing a little quickly here, sorry]

I won't hold if it is still rallying Monday, But when the trend turns here I am getting short and hanging on for a bit of a ride. I like AEM and AUY, below their 200-day moving averages (which implies I could get stopped for now on AEM (a higher high there would likely do it).

More later - Bone weekend

Position: currently 1.25-to-1 net-long...
Currenty long (according to size): AVAV (increased today; bench new on 50-day), ATHN, CEPH (new), LOPE (new), MYGN (new)
Currently Short (according to size): XEC, AEM, GDX, STRA, SIVB, HST, PNC, SGY

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