Tuesday, October 06, 2009

Ice Water Veins (and fortunately, shit for brains)

Fortunately, I remain an idiot.

The session was a little wild and I did whip myself some today, I'm still riding long, in push-it-till-it-pops fashion.

So while I did take some caution when a GS-led sell-off threatened to reverse the market today, I am happy to report I was crazy enough to whip right back to full-fool long-mode; once it became clear the reversal was going to fail.

Right back on the bike.

I suspect that bears got very excited when Goldman Sachs (GS) reversed lower and especially as that led to a reasonable counter-wave of selling throughout the market. If I hadn't had so many orders to enter, so many positions to monitor and 3 Faces of Eve to council (sorry Fred), I would have been lurking the boards for value today. Pure, natural value. But two things kept my mind thinking long, even without seeing the bear-board jamboree (and even whilst I was entering GS shorts myself).

First, the market internals were still very strong, down from extremely positive earlier in the session, and it was a broad-based, rising-volume rally. Second, leadership stocks (GS aside) were out-performing the major indices (again!). Third, the time-of-day was a little too early (12:30-1:00 EST) and didn't hold the weight of a late-day reversal attempt (time-of-day has provided an incredible edge many times for me in the past - I have discussed it plenty, though not lately; I'll look to explain the nuance of this again soon).

Fourth, even though I wasn't able to confirm, would I be wrong to suspect bears were pounding tables with extreme excitement? There was great cause for celebration after all - as the indices were up only .75% or so at that point! Practically an up-day if you had been short, right?

And while that is amusing, or not, it doesn't really mean anything going forward tomorrow. In fact it may even be a negative for tomorrow (especially after bears cover positions on the up-open). These were good only for today and on top of that, the now-choppy advance is a little suspect. Why? Well, tops are sometimes choppy in nature. Secondly, we have not yet traded to higher index highs (although leadership names are much closer to highs than the indices). Thirdly, you know about forty-five thirdlies, so let's leave it at that for now.

Anyway, this is a lot about nothing - especially when I won't even tell you how to use time-of-day to your advantage for a fake-out counter-move; Or why buying a high-volume breakout whereby a name is breaking-out on news of buying another company is such a high-percentage play (HRBN today, for example). Frankly, I'm not sure why you continue to read this site. I rarely post, compared to most, and when I do most of the time I'm just blowing steam and using you to organize what I might not think as much as anything otherwise.

See what I mean? Even when I am surmising what might be next it comes from a process of elimination, not anything so brilliant. Breadth was severe-strong today and suggested we would not see an ugly reversal. Trish came on and her opening comments did not even mention the strong rally in stocks, but instead she focused on the strength in gold and the weak Dollar (Trish would have been much more jubilant if we were going to reverse ugly. Trust me, she's that good). And those bearish boards, which I couldn't even visit so I have no right to flame today? They were no doubt salivating what little saliva was left in those giant cotton mouths - that today was progressing much like the key-reversal failure in the market a couple of weeks ago on Sep. 23rd!

Whatever. At least I always have myself to kick around once you guys go away. In the meantime, things could get exciting now. I'm going to froth and push and push again, until ugly again fairly flashes. At that point I am going to take cover as best I can, whatever my lumps may be. This way if we keep on higher (how ridiculous) I am not going to miss it. I can take the body shots of running out of a crowded theater with my ass already on fire. The real risk is a dramatic gap-lower - which means I'm in a building which has already collapsed; not good.

I'll risk the latter, until and unless there are clear signs of warning (which may be close, maybe not - htf do I know?). Or if it's a gift-horse right out of the mouth - like if Trish comes into the theater, takes a seat next to me and shouts sweet nothings into my Six Ears of Eve- I'll be godspeed the hell right out of there in such a case.

In the meantime - the machine still has teeth. Why fight the machine?

-Total Position: >10-to-1 net-long
-58% invested
-Pure-longs = 53%

Currently Long (according to size): HMIN (10.4%), HRBN (6.7%), SXCI (6.7%), CFSG (6.4%), DGW (5%), BCSI (5.1%), CLW (4.5%), SWM (4.1%), PTI (4.1%)

Currently Short (according to size): TER (5.1%)

Futures Accounts: no current position

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