Monday, February 23, 2009

Orderly!

Visiting hours are over, pulses are weakening, bed pans are brimming and the room stinks of factual matters (fecal matters). But hey, we still cannot plunge the averages with anything more than modest, mousey bars on the charts.

Okay, it was sufficiently ugly today and I'm very glad to have re-positioned heavily short in the opening 30 minutes, but this is nothing like the uber-drubbings of last September and October.

This then, is the orderly chapter of our market's demise. No major panic, no major failures, nothing but a good-old game of chicken between the bears and the major averages struggling with support.

Bulls can point to the fact that so far, only the Dow and the Transports have broken their November lows, while the Nasdaq, the NDX, and to a lesser extent the Russell 2000 and the NYSE are above such levels (a positive). Bulls can also argue that new 52-week lows are but a fraction of what they were last October. And as far as the SP500, well, sure it is in danger of breaking the November level, but there is a preponderant congestion of Paleolithic-support on the long-term charts - right here!

On the other side, bears can point to any number of factors, not the least of which is that the interview period with Dr. Kevorkian is just about over.

Myself, I really don't care. I make it a point to be as boring as humanely possible and simply mop-up the remnants of whichever force is bigger. And on that front it has been a nice ride lately, but given the dramatically negative internals in several of the latest sessions, being short here I would have expected to have a lot more blood stains in my pockets. The market is selling-off with more of an orderly indifference than with any real panic.

Okay, tomorrow is another day and the SP500 is indeed on the brink of breaking Paleolithic lows, so I haven't thrown in the red-towel just yet. But there is no lack of crowding here on the short side these days; the reflex, counter-rallies are powerful, even if brief; and the orderly demise, if it continues in this fashion, is just going to set-up a larger counter-punch...eventually.

If we aren't breaking badly tomorrow, I'm going to get much smaller here. I don't have much left on the long-side, but I will bring in most all of my shorts if this is to be the case. From there I can trade hard intraday (such as today's SRS trades, broadcast via Twitter on the right<<<), trade much less if the internals are not clearly one-sided (negative or positive), or trade madly and insanely (as I like to do when the sets come in), should the action be resolutely one-sided).

Then there is this over-lay chart which is making the rounds. It might be alchemic hocus-pocus, but it might mean we're ready to retrace a bit higher now before Dr. Kevorkian can get his gloves dirty.

Currently Short (according to size): XEC, VNO, AEM, STRA, GDX, SIVB, HST, PNC, SGY, PTRY

Currenty long (according to size): ATHN, LOPE


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