Monday, June 08, 2009

Fuzzy Bear Trap? (quicknote on the new week)

Action is further negative so far today, following Friday's reversal lower, but there is nothing yet overly concerning in either market internals or the behavior in leadership stocks.

I wouldn't suggest we're good to reverse higher today and things could deteriorate further certainly, but I am not against adding-back to longs on the weakness. Volume is declining from Friday's pace (constructive) and neither market breadth, Up-to-Down volume ratios, numbers of new 52-wk lows, or really anything else I am seeing point to an imminent rout. Certainly, the ever-bear camp of SKF/FAZ/SRS, etc. is not getting a ton of relief just yet. Tomorrow is another day; further weakness would cause me to increase defense; one step at a time; we'll see.

Easy game ;)

As far as hedges, I shifted from SDS to TWM (as the Russell2k is weakest of the majors on the session).

Total Position: 2.18-to-1 net-long (plays 1.40-to-1 net-long considering levered TWM); 56% invested
(Note: inverse-ETF TWM represents being dbl-short the Russell2k index)

Currently Long (according to size): TQNT (re-increased today, 4.8%), ASIA (4.5%), SWN (4.5%), RAX (4.2%), WFT (4.2%), PEET (3.8%), ARST (3.4%), SNDA (reloaded, 3.1%), AU (reloaded, 3.1%), CYOU (reloaded, 3%)

Currently Short (according to size):
TWM-long (new, 9.9%; Russell2k Dbl-short), ONXX (4%), MYGN (3.9%)

Futures Accounts: covered 20% short Jun NDX, ave. 1476.50; from 1495.75 ave Friday

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