Wednesday, May 13, 2009

Chopping Down that Palm Tree (for 37 years)

The hot air is bubbling inside of me now, but I still don't want to post my thoughts on this pullback. I am However sticking with the game-plan of increasing my line short as things deteriorate further; whereas I will reduce if it becomes clear we are turning positive.

...Still

I may win the blahgosphere's most broken record award, repeating repeating repeating the same brand of bland every day until something changes (or until I start losing money).

Today's action is the most severe yet for this pullback and internals are staunch enough negative to suggest nothing of a reversal for this session. Nasdaq volume is running at a lower pace, but the Naz has already managed several distribution days in the last week or so. NYSE volume though is running at a stronger pace (distributive); thus that side of the market is now flashing further distribution. NYSE breadth is severely negative (currently >6-1 declining stocks vs. advancing; Nasdaq breadth is currently >4-1 negative). Breadth can be more extreme, but at this level it is rare a session manages to reverse; common for the day to close near lows.

Those comments refer to today (in the case you suspect I am commenting on this pullback). I am comfortable with discussing this session, it's the pullback at large I refuse to share thoughts on.

If the final hour is dramatic-negative, I will reduce short exposure by the close. Otherwise, I'm sticking to the ever boring approach of holding further-short as long as this pullback is in tact (repeat, repeat, repeat). You fancier traders can run around me with guns blazing, getting long for that micro-bounce while spouting great knowing on every move to come. You're too good for me, tough guy.

I'm just not as excited about this market (either direction) and I suspect strongly that flipping back and forth this particular tape is not going to add to performance...we'll seethe.

Total Position: 3.2-to-1 net short (plays 4.3-1 net short considering leverage), 53% invested

Currently Long (according to size): WNR (5.2%), CYOU (3.8%), DRI (3.5%)

Currently Short (according to size):
TWM-long (10.7%; Russell2k Dbl-short), AAPL (7.4%), STRA (5.0%), HCN (new, 4.4%), BKE (new, 3.3%), SRS-long (3.2%; US Real Est. Dbl-short)
(Note: inverse-ETFs TWM and SRS represent being dbl-short the respective indices)

Futures Accounts: Short 20% SPX Jun, ave = 912.75; Short 40% Jun Euro FX futures at 1.3585

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