Thursday, April 02, 2009

Updated Position (leaning slightly short at moment)


Faster Pussycat Kill Kill...

I mentioned earlier I wouldn't sit tight and hold my dozen or so longs if the market was going to scream higher. Today was a screamer and I'm strapped now onto the fastest energy particle accelerator I could find on short notice.

Briefly, the strategy here for the near term is to attempt to hold 4 or 5 core positions long (each in the neighborhood of 5%-size) and trade around additional tranches (adding on new swing set-ups and then selling the added shares on strength). But at the same time I am going to hop in and out of other movers, with a 1-5 day time frame, so that I can participate in whatever the best set-ups may be on any given day (speaking long trades here). And at the same time still I am going to hedge according to the weather of the day. The objective is to basically break even (or better) on market pullbacks and then shoot the moon on subsequent waves higher.

Earn while you churn.

On that note, my accounts for the moment are playing more short than long (1st time in a while and not until the final hour of trading). Today was a sell-the-news opp for me and If we cannot sell-off much tomorrow, I'll adjust hedges quickly and hold my now-fewer longs. If the market trades ugly, only to trade uglier still, I'll stop buying set-ups long, gradually reduce the longs and simply push with the shorts.

If you want to keep up (welcome to crazytown), I will continue sharing trades live (and current long vs. short ratios) on the Twittfeeder. If I'm not posting on the blog much, it is because I am too active to compose new rants. But either way I will update the action live via Twitt >>>.

As far as where we go from here, I have my suspicions and following this post is a message to longer term investors which highlights some of those thoughts, but understand I have no preconceived conclusions when it comes to trading an environment like we have now. It is not for me to say how high is too high - if the market action keeps positive and there continue to be good looking leadership charts en masse, then I will key long. On the other hand a bear market rally can end on a dime, so if the charts begin breaking down and the negative action becomes dominant, I will key short; increasingly so as energy accelerates.

Easy game.

This is all possible as long as volatility is high. When we lose that volatility, it will not be possible to flip so many stocks back and forth profitably. At that point I will likely shift to trading more in indices, but for now there is ample volatility (opportunity) to trade individual names; long/short.

Total Position: 1.45-to-1 net long, 90% invested
(Note: accounts are playing more short than long at moment due to 3x's leverage on new FAZ hedge)

Currently Long (according to size): RJI, PMCS, WNR, NFLX (reduced), ARST (reduced), CHKP, LFT, MYGN (reduced), MNRO (reduced), TSYS, DRI, IOC

Currently Short (according to size): NTRS (new), GE(new), JPM (new), RSH, FAZ-long (financial's triple-short), ACC (new), ELOS (new), EGO, KIM (new)

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