Wednesday, March 18, 2009
People like baseball analogies. For me it's always the first inning. But poker gets to the meat of the matter.
The Fed went all-in today and I folded my short stance promptly.
In poker terms it adds up something like this: The Fed showed terrific strength today; I can't be sure the strength of my hand and even if their gambling mentality may mean penultimate failure down the line, what's the point of gambling with them right here and now? Sometimes you just let the other guy take the pot, but you try to take something away from that hand that will enable you to spot a better set-up later.
If this market stalls tomorrow, it could get ugly very fast. This is not a bullish call. I can be mkt-neutral inside of a minute and I can scale my accounts fully short within the hour*
At the same time though, the tape has been strong and today it got stronger. I'm not fighting that kind of momentum.
Growth stocks have been lagging lately while broken, beaten down stocks coming off of lower-lows have screamed upward. If we are going to continue higher, I think we'll see leadership growth start to outperform now and that would be exciting; as there are so many nice set-ups on the charts.
Tomorrow will be interesting. Tomorrow the session and tomorrow the future (that thing we just mortgaged today). The Fed is going to sell treasuries, sell them to themselves. If I were a country and I owned a lot of US debt, I think I just might sell it to them. Keep an eye on the bond market.
*Follow my Twittfeed and you'll know within a minute.
Total Position: currently 2.29-to-1 net long, (77% invested)
Currently Long (according to size): ARST, RJI, WNR, PMCS, MYGN, SNDA, MNRO, UGP, IOC
Currently Short (according to size): BWA, IPI, ELOS, GTIV