Monday, October 19, 2009

Bear Market for Bears

Life is tough for bears again today, as the ridiculous market rally takes them once more by the horns and runs with it.

Bears remain right, heads and shoulder patterns above the rest. I mean, we've moved too-far-too-fast, well, too-far and too-fast. The market must be rallying out of spite at this point. Anyone in their right mind knows it's completely unreasonable. Lives will surely be taken now and soon.

Fortunately, I remain an idiot.

One bone-fide negative divergence - the Dow is leading the major indices higher. The Nasdaq, NDX and Russell-2k have yet to make higher-highs along with the Dow. The broader NYSE has managed a marginal higher-high, but you don't like to see Jonestown leading a charge higher; especially should the NDX and Nasdaq turn down at lower-highs.

Fine. In the time it took me to write, link and edit the previous paragraph, all but the Russell-2k have traded now to marginal higher-highs. If the market reverses lower today, it will qualify as something ugly (something like a doomed house head and shoulder head fake) - which would indeed force me to adjust.

In the meantime, Chinese growth names traded in the U.S. continue to lead (leading even those Dow Jones's) in the U.S. and I have to answer as to why I have any hedge on at all just now.


-Total Position: ~1.75-to-1 net-long, considering levered TWM hedge
-67% invested
-Pure-longs = 52%

Currently Long (according to size): ASIA (7.4%), HMIN (7%), HRBN (7%), WATG (6.2%), DGW (5.3%), RKT (5.1%), CFSG (5.1%), CLW (4.5%), ININ (4.5%)

Currently Short (according to size):
-TWM-long (Russell 2k Dbl-short, reloaded today, 14.8%)

Futures Accounts: no current position

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