Friday, June 05, 2009
Killing it Neutral (shift toward mkt-neutral)
While I see no reason at moment to position bearishly. my guard went up today. I was quite busy early, shifting towards market-neutral.
The most troubling action came from the currency markets, in my opinion. On the employment report we saw a big drop in the dollar (rally in the Euro, Pound, etc. at the same time), but that was followed by bigger, and frankly nasty reversals. At this writing the dollar is up significantly and holding, treasuries were slammed, gold is hobbling and (at least) oil is flat now on the day.
This might seem insignificant (and perhaps it will turn out that way), however the currency markets have been leading equities for some months now, by roughly two-days. Two days ago the dollar saw a sharp rally and now today it is following through and we've developed something of an uptrend. If equities are going to remain linked to the currency leadership, then upside for stocks may now be limited; we'll see.
Most traders like to make a lot of of a little (especially those who write and post!) and I don't want to make a big deal out of this. I will react and respond however to changes in the market. If stocks cannot sell-off now, I would be happy to keep pushing leadership long. Yet if we start deteriorating, I'd like to let you in on my latest hunt-and-thrust images and fire like a maddened maniac short. Faster Pussycat Kill Kill - Race the fastest pussycats an they'll beat you...to death.
That's the long way to say that I'm closer to market neutral now and ready to react in either direction, depending. zzzzz
CYOU and SNDA (NTES as well in that group, but I didn't have that one on this rally) are animals still, but they are quite extended at moment and I let them go on the up-open. In the case of CYOU, that lovely powered only 50.2% from the low 10-trading days ago to the early high this morning. I left 2% of that gain behind, having sold too low at 40.08; snort!
I'm still shaking off the 4000 flushes here (having sneezed over 500 times in 3 days now) and I'm heading out for warm warm waters, looking to kill something. Be sure to tune in over the weekend to check-up on the spoils. I've invited Trish, but she's too sophisticated for my kind and currently not answering emails. Her weekends I imagine are spent tanning, shoplifting red sweaters and studying the markets (right!). She's certainly not getting out to Devil's Golf Course to exfoliate with me anytime soon to.
Nail my tongues to the floor why don't you.
Total Position: 1.73-to-1 net-long (plays 1.14-to-1 net-long considering levered SDS); 53% invested
(Note: inverse-ETF SDS represents being dbl-short the sp500 index)
Currently Long (according to size): ASIA (4.6%), SWN (4.6%), WFT (4.5%), RAX (4.3%), PEET (3.9%), ARST (new, 3.4%), TQNT (reduced today, 3.3%),
Currently Short (according to size): SDS-long (new, 8.5%; SP500 Dbl-short), ONXX (new, 4.1%), MYGN (new, 3.9%)
Futures Accounts: 10% short Jun NDX, from 1497.00