Tuesday, September 15, 2009

This One Goes to 11

While the market action was more impressive Tuesday, the rise in sentiment is not backing down and continues to be a growing concern. Fresh economic data further indicating an improving economy is no less concerning, as market rallies within a recession have a tendency to stall coincident to a shifting perception that the economy is truly improving.

We're two weeks now from the end of the quarter and this should start to get more attention. Window dressing is commonly heightened in a year that most managers are under-performing their respective benchmarks and this dynamic may be worth more right now than most expect. That said, we cannot count on the dynamic of under-invested managers piling-on and keeping the market pumped right to the last day. There have been a couple instances in the last two years where a good rally stalled-out and got ugly, with several trading sessions left in the quarter's tank.

My trading may get a little wild here in this period. I have too many names (long) at the moment, or at least too many to respond to a directional shift with any rapid immediacy. So while I don't mind the heavy exposure presently, I am uncomfortable with having this many children to escort across a highway when/if the time comes to run. I was looking to reduce the number of names Tuesday, but none stood out as shoot-me candidates to cull my book. Wednesday is another chance.

Even with a smaller bunch, I intend to push on this until it pops, with a succinct goal of getting out without egg on my face. It helps to be a bit of a maniac, but nothing here is automatic, so don't follow along for more than learning and entertainment. Good or bad, there will be something to learn here in the next couple of weeks. I know what I am after and I am capable of pulling it off, but playing with fire doesn't always equate to a feel-good ending by the time credits are rolling.

And the sequel is usually worse.

The name of this blog begins to make some sense, perhaps. I'm pretty confident I can beat the train to the tracks - but I'll be speeding things up now, in an effort to be sure.

Total Position: Aprox. 2.4-to-1 net-long, considering hedges; 92% invested (pure-longs amnt to 67%)

Currently Long (according to size): SNDA (7.1%), CREE (6.1%), NEU (5.6%), CYOU 5.5%), CTSH (5.4%), RKT (5.4%), ULTA (5.1%), EBIX (5%), CLW (5%), MRVL (4.7%), JDAS (4.2%), SWM (4.1%), ININ (3.9%), SWI (3.5%), FNSR (2.6%)

Currently Short (according to size):
-FLEX (7%), new Cramer feature-pump (1-3 day trade)
SKF-long (US Financials Dbl-short; (6.9% position)
(Note: inverse-ETF SKF represents being dbl-short the respective index).
-Also Long-UUP here (12.1%); which due to inverse correlation with equity mkts defines this as an equity hedge.

Futures Accounts: No position - Covered Dec BR Pound, 1.6463

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