Thursday, October 29, 2009

Stage Right (exit plan in hand)


The last couple days were truly punishing, in that leadership longs here were pummeled far more than underlying index-hedges could protect (even though I was more short than long in terms of allocation). I was too distracted (distraught!) to color it here, as I'm scurrying still to get to Beijing on Saturday.

Today however, is providing my exit plan on a platter (instead of my head).

Perhaps perhaps.

It is early still, but breadth is near severe-positive, big-cap leaders GS and AAPL have now both traded above their open-range highs, the gains are strong and furious, the Dollar is back on the time-out stool, etc., etc.

In other words, we are over-bouncing; which is not the healthiest action for a market which has tipped its hand recently that sideways or downside progress is now more likely (short-term) than higher-highs and a continuing up-trend.

Sloppy sentence there perhaps, but my exit-plan for the near is in place and I'll be unloading most or all of my remaining position by today's close; taking in some sideline-time to regroup.

Even if I weren't going to be in China next week, I would still opt for a break. My strategy is defined by ramping up (centrifugally) as trading goes well and cower chicken-like when it is not (all in relative fashion). Safe to say that a trading-break is in order.

I'm keying on UWM (Ultralong Russell 2000 etf) today (daytrade only), as the R2k is the strongest (tradable) major index on the day. The trade is justified by the very strong internals for this session, which have a bit of 1-day-wonder flavor to them (generally bearish going forward; when a declining market suddenly panics higher in dramatic fashion). I can bail out before the close, certainly, but the action implies we'll close at or near the highs of the session (where I don't like to know).

After that, I'm not qualified to comment. I'll be heading for the time-out corner myself.

-Total Position: 100% net-long; 33% invested overall

Currently Long (according to size): UWM (12.9%), AAPL (10.4%), CRIC (5.3%), WATG (4.7%),

Currently Short (according to size): no current position

Futures Accounts: no current position

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