Friday, September 25, 2009

Bloat Note

Following body shots taken from the weak reception of IPO GAME, I'm presently net-short again; having coughed-up SNDA and CYOU longs into that unseemly event.

I could have reduced my hedge and/or replaced lost longs, but the potential pivot in the market has deteriorated and I'll keep things small here (overall short until something improves). Market internals, while not extreme, have returned to negative. NYSE breadth for example, has re-reversed today; currently 2-to-1 negative.

Noteworthy, bellwether GS is trading to lower lows now and the AAPL reversal higher has faded (although AAPL is still quite impressive relative to the RIMM weeper). GS may be having a bit of trouble from these failed IPO's this week (their name was on several of them), but whatever the reason - if the Financial's leader is driving/leading lower the buy-button should likely be avoided.

I bought TSL and SXCI today before things worsened. They're holding in so far and not such a worry since I have but one other long remaining. [Follow realtime on the Twittpitt if you dare]

Back to the GAME blame - I think it is clear the course of action for me was to take lumps quickly, unthinkingly, given the surprise weak-open in GAME. I'll be staying off this group for now, but definitely interested. If they are not longs, then I would have to call them shorts. Something may have died under the floorboards today...any lingering smell would indicate rotting.

Thus bears remain downtown after all, sipping coffee still. And it looks like I bought the most recent round.

-Total Position: Aprox. 1.75-to-1 net-short, considering levered SKF and under-levered UUP hedges.
-33% invested
-Pure-longs = 13%

Currently Long (according to size): SXCI (5.1%), TSL (4.2%), ULTA (3.4%)

Currently Short (according to size):
-UUP-long (12.1%); current inverse correlation with equity mkts defines this as an equity hedge
-SKF-long (US Financials Dbl-short; (8.4% position)
(Note: inverse-ETFs SKF and TWM represents being dbl-short their respective index).

Futures Accounts: no position

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