Wednesday, May 20, 2009

Quick Update (shift to net-short)

Guns are blazing in both directions today - as such I don't have a lot of time to discuss.

Quickly stated, internals remain mostly strong and yet to crack, but toppy signs are emerging (the market is churning since the gap higher, on rising volume; Fncl's are deteriorating and all indices are trading now below the opening-levels; breadth however is still quite strong).

If we're going to see a meaningful turn in the market it should begin reasonably soon (or it has basically begun from today's open). But while toppy action is evident (Financials especially) it remains to be seen whether or not the market is ready now to drive lower.

Higher prices still, or even a dull/boring consolidation sideways (zzzzz) remains just as possible as unlikely.

This is why I prefer to keep a half-step behind the market. A younger hot-shot me was always anticipating and sometimes paying for it (like some of you heroes these days). I'm a tiny bit late and happier for it.

Being a half-step slow here, there were a lot of portfolio changes (details on the Twittspit ), but below is my world as it stands now.

I am net-short from here as long as we keep below today's first-hour highs...

Total Position: 1.31-to-1 net short (plays 1.68-to-1 net short considering leveraged, short-etf's), 69% invested

Currently Long (according to size): CYOU (reduced 6.3%), ASIA (new, 5.2%), WNR (5.2%), DRI (3.8%), SNDA (reduced, 3.5%), LIHR (new, 2.9%) PEET (2.8%)

Currently Short (according to size):
SDS-long (new, 7.7%; SP500 Dbl-short), STRA (5.1%), NTRS (new, 4.1%), CAL (new, 3.9%), BKE (3.5%), SKF-long (new, 3.6%; Fncl's Dbl-short), MDT (3.4%), FULT (new, 3%), SKYW (new, 2.9%), CNO (2.0%)
(Note: inverse-ETFs SDS and SKF represent being dbl-short the respective indices)

Futures Accounts:
-Short 20% Jun Euro last night, 1.3577 (today's high will define stop)
-Short 20% Jun BR Pound,
1.5602 ave. (today's high will define stop)

Options (relevant accounts): 0.4%,
Sept GM 2.00 puts, paid 1.57

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