Saturday, February 28, 2009

Cowgirl in the Sand (back pocket eligible long list for plunge+reversal)


Whether we flush-plunge now or popcorn further, back-test and then plunge, I'm fairly sure the L-button on the elevator is close at hand.

So while I'm focused almost entirely on the short side at the moment, an elevator drop would set the stage for a terrific counter-shot coming out of the panic. There are plenty of bears in the same pond here, which means a panic will likely be short-lived, even if severe.

Hence the back-pocket list of eligible longs is in order.

While certain oversold, overbroken, lifeless uglies will present brief counter-swing opportunities the day we turn (if timed correctly), the below list represents higher-relative strength, aggressive growth names still surviving on the charts and having a much better chance at becoming intermediate-term (IT) long opportunities; coming out of a panic low. This is not a buy here-and-now list. Rather, if the floor falls out and the market carves-out a classic key-reversal, a counter-trend rally should be good for anywhere from 33 to 66% higher for the broad market (from new intraday-low territory up to the ultimate intraday-highs).

In more direct terms, I'll be looking for higher relative-strength names which do not take out their November lows on a panic, and preferably do not breach December and/or January lows either. This list is a little early, since some of these names may end up breaking such levels, but in the meantime it is my best early guess at future potential leadership. Once we've flushed and then firmed, anything below which did not carve lower-lows in the end is a green light for an IT trade (in my opinion - as always, don't do what I do; at least not because of anything I've said).

(early) Back Pocket List of Eligible Longs:

Technology:
SNDA
STAR
EPIQ (thin)
NTES
BMC
TNDM (thin)
IDCC
NCIT (very thin)
MANT
CHKP
NTCT
TSYS
OTEX

Energy (mostly refiners at this point):
IOC
HOC
WNR (reports 5 mar)
SXL
NRGY
TSO
INT
NSH

Financials:
GS
NITE (11% short int.)
(others will be determned after the dust settles - and many of the future winners do not yet exist, as they will be newco's born from ashes of the fallen uglies)

Medical/Biomedical:
MYGN
(group is in flux, recently breaking down badly; too early to compile winners/survivors)

Ag/Fertilizers:
SYT
SQM
POT
MOS

Retail:
NFLX
AMZN
ROST
BIG
DBRN
ARO
ORLY
MNRO (very thin)

Friday, February 27, 2009

Night Gallery (down ward)





Canned Hams and Chummy Chumps


No blood bath still, but it was a nice flesh wound in the end.

CNBC rolled out bull after bull today, touting the incredible resilience of the market and after their parent GE didn't crash on dividend-cut news, cheered and lathered over the fact that GE was only down 5%. Even Cramer chirped that he bot today for his Action Owners Plus(or minus) Trust - which could mean he picked up a share for all we know.

At one point, they teased a big bear who had turned bullish was coming up next - but that turned out to be Robert Prechter who said he thought the market would go lower, but felt the short trade was getting too crowded for his taste. He then went on excitedly about shorting gold names, while Maria shifted notes and apparently got the cue to dump this guy and it was off to commercials.

I don't know, maybe I spend to much time with this stuff, having to listen to candied ham-heads, crooning rotund and straight faced while fear faintly slips from botoxic lips as they ever-tout this bedraggled, mildewed market of theirs.

Speaking of mildewed, I'm lathered up in cocoa butter and ready to tempt the great whites with my fattening cocoaflanks. I'm going spearpooning this weekend, somewhere in my Adriatic Attic. I'll be floating flankside up, chewing on sea cucumbers, darting in and out of stateroom suites and shagging thresher bass, carpet sharks and sequined barracuda; all the while smoking endless miasmas of stinky breadth cigars and driving vintage 50's cars smuggled from Cuba during the stronger-support days of 1997.

In other words, once Cramer pumps his Speculation Friday p.o.s. I can shut off the tube and get outdoors.

The futures have closed on lows today, having broken that observed/vintage/penciled support from 1997, and while no one who is >9-1 net-short should get comfortable (ever), I don't envy the bulls just now.

VNO closed like an anti-hero today and I did get quite ravenous with that one late in the session. Follow the Twit on the right >>> if you want to see how a maniac trades when sufficient chum is reddening the water. Sure, I churned a little today, whereas a less risk-adverse madman would have just sat patient. but I really prefer punching the accelerator all the way only when there is no congestion on the freeway. The slightest sign that I might get nailed and I start scaling towards the right shoulder. There was never the dramatic internals for me to strike with abandon, yet at the same time I wanted to be loaded for bull if we were at least setting up for a potential flush next week. Hence, I scaled-out some and then back as the waning minutes began to gasp. I earned myself a frequent-traders fruitcake, but managed reasonable gains on the day and remained locked and loaded again at the end of it all.

Naturally, I'll adjust quite quickly if blood is not flowing next week. Bone weekend.

Total Position: currently 9.25-to-1 net-short (82% invested)...

Currently Short (according to size): SKF-long (Fncl's Dbl-short), SRS-long (Real-Estate Dbl-short), VNO, AXA, AEM, ETN, TMK, NYB, WFC
(Note: above long inverse-ETF's SKF and SRS represent being dbl-short respective indices)

Currenty long (according to size): SYT, IOC


Bullprieve (only a flesh wound)

While it wasn't a sling-shot reversal-higher from the get-go, the internals so far today do not suggest any daytime reckoning; not on this calendar date at least.

I could have been cute and covered shorts at the open, only to put them on again with the bounce higher, but that is not my particular style. In general, I want the big moves when they occur, so I try instead to just keep firing as things get more extreme (and on the other side, keep adjusting as they go against me). Chop then is not my friend, obviously; but I do fare okay moving quickly when whitewater grabs hold. Then, when executed well, I spear the really big fish when they cruise my path...instead of mere flesh chunks.

It's the big winners that make your year's performance, trust me on that one. And 'tis the big losers that ruin your investment life.

No bold predictions here going forward (but one might consider my Elliott Wave count on the chart below). It does though appear to this trader still, that we are working our way to lower-lows, potentially with a major, if not brief, flush in the near future.

I want to key short still for now (adjusting as necessary), until inflated spores of panic permeate the air. On that day (or couple of days) I want to go from extremely short and bloody to short-free and long Darwinium slingshots showing the greatest survival on the tape.

Today's trades were broadcast within a couple minutes of live via the Tweedfeed >>>

Total Position: currently 3.5-to-1 net-short (80% invested)...

Currently Short (according to size): SKF-long (Fncl's Dbl-short), SRS-long (Real-Estate Dbl-short), AEM, ETN, TMK, NYB
(Note: above long inverse-ETF's SKF and SRS represent being dbl-short respective indices)

Currenty long (according to size): SYT, HOC, IOC

Quick note on the day

I'm going to be pretty busy perhaps, but I will convey the trades via the Tweed >>> on right.

Unless we gap down and rally (in which case I will pull back some of this short line), then I am looking at it this way:

- >5-1 negative breadth after 1 hour gives me a green light to short as much as I can.
- >4-1 negative breadth going into final 90 minutes keeps that light green.
- Bear markets do not bottom on Friday's, so unless this firms-up quickly (SPX re-captures 741 level early-on), then I expect to hold a large short position into the wkend.
- Intraday, I will be keying on the weakest indices, which so far look to be Financials.
- I'm looking to short back my addt'l 1/3 AEM up at the 200-day m.a. (following this up-grade and the early bid for gold stocks). I am trying to get a new tranche short again on GDX at that 200-day also. Gold stocks may keep firm if the market is breaking down again, but they may end up selling-off instead, confusing the many bulls.
-Again, the key is whether or not the mkt catches a bid after the gap lower and then just how extreme the internals become if not. The more extreme, the more likely we close near the lows of the session. Good luck out there.

Thursday, February 26, 2009

12.25-to-1 Net-Short (back from the weeds)

[Note: Still Wounded Financial's (dumster-diving list of eligible shorts) are just below...]

An exciting wave of selling ensued following the FDIC's report of the number of troubled banks in the nation (increased 47% latest quarter). [Edit - and more gradually earlier, following the administration's new budget plan.] Put-to-Call ratio's today are eerily low and don't be surprised to see lows (wickedly) violated in the Dow/SPX tomorrow or Monday.

My trades are on the Twitfeed on the right >>>, but here is the updated (SHORT) portfolio...

Total Position: currently 12.25-to-1 net-short (50% invested)...

Currently Short (according to size): SRS-long (Real-Estate Dbl-short), QID-long (NDX Dbl-short), SIVB, ETN, AEM, XEC
(Note: above long inverse-ETF's SRS and QID represent being dbl-short respective indices)

Currenty long: SEPR

Still Wounded Financials (pup seals scurrying on the beach)


Here is the updated watch and kill list for the Financial's. Clearly, names relating to commercial real estate are the majority, which means SRS may be better than SKF (near term) as a trading vehicle for shorting the groups...

Finance-REIT's (still the longest list of Financial horrors):
VNO (9% yield; 10% short-interest; reported 24Feb)
SPG (9.5% yld; 8% shorts; 483% debt)
KIM (17% yld; 11% shorts)
HST (5% yld; 8% shorts; reported 18Feb)
BXP (7% yld; 12% shorts)
AIV (41%! yld; 15% shorts; 430% debt)
AVB (8% yld; 18% shorts)
MAC (24% yld; caution; 501% debt; 32% shorts)
CBL (55%! yld; 25% shorts; 638% debt)
PPS 7% yld, est. ex-divd=27Mar; 12% shorts)
HME (9% yld; 21% shorts; 357% debt; reported 19Feb, after-mkt)
CPT (12.6% yld; 8% shorts)
UDR (14% yld; 8% shorts 321% debt)
HR (10% yld; 12% shorts; reported 23Feb, aftermkt)
WRI (15% yld; 11% shorts)
CUZ (12% yld; 15% shorts)
KRC (11% yld; 9% shorts)
EQR (9% yld; 6% short)
EPR (17% yld; 15% shorts; reported 23Feb, aftrmkt)


BANKS/SNL's (don't take away that dumpster just yet):
BMO
BBT (12% y;d; 9% shorts)
SIVB (no yld; 15% shorts)
MI (30% yld; 7% shorts)
UBS (14% yld; minimal shorts)
AF (7% yld; rcnt divd decr.; 5% shorts)
NYB (9% yld; 8% shorts)
COF (12% yld; 10% shorts)
DFS (3.4% yld; 2% shorts)
RF (12% yld; 5% shorts; recent large insider buy)
CMA (1.3% yld; recent divd decrease; 9% shorts)
SNV (7% yld; 9% shorts; recent insider buys)
BAC
C

INSURANCE (insurance/exosurance - insure this!):
PFG (4% yld; 4% shorts)
MFC (5% yld; caution, est. ex-divd date=23Feb; minimal shorts)
AFL (5.5% yld; caution, est. ex-divd date=13Feb; 4.5% shorts)
CNO (no yld; 3% shorts)
AXA (10% yld; eps due ?; minimal shorts)
TMK (2% yld; 7.5% shorts)

Commercial Loans (new deathwatch):
NNI
SLM

Also Ran (in its own little category, still limping on the beach):
GE

Bull Bait


It's 90 minutes into the session and the market internals remain strong; led by Financial's.

I blew-out the SKF early and was eventually stopped-out on SDS. However, I am not yet stopped on SRS. Unlike other inverse ETF's, SRS is trading above the opening price level and so far held it's 7am low (reached when the market surged en-mass on the release of new homes data).

I remain in damage-control mode and I have my stop in place for SRS, but that is basically just a hedge against longs at this point. I am currently market neutral and very lite.
[blow-by-blow action is available on the Tweedfeed >>>]

But while I am mostly side-lined I will say this - today is a perfect day to identify wounded pup seals for further future attacks, especially in the Financials. The Financial's are re-pricing potentialities right now and you can see certain names like STI suggesting post stress-test survival. At the same time a name like SIVB is really having trouble getting off the beach and into safe waters.

I will compile a fresh list of wounded uglies today. I want to be ready as soon as the market stalls-out (whenever that occurs). If the market surprises to the upside, my methodology will keep me out of action or else long, depending.

Thus, in the meantime, I'm eating sheaths of karibu jerky (I have 3 or 4 of these beasts hanging upside-down drying-out in my living room), sharpening harpoon daggers, watching markets and starting kill-lists for future bloodshed.

Currently Short (according to size): SRS-long (Real-Estate Dbl-short), AEM (reduced 1/3rd today at 46.80)
(Note: above long inverse-ETF SRS represent being dbl-short respective index)

Currenty long (according to size): ATHN (reports tonight), SEPR

Mode de Damage Control

Here is the quick skinny on damage control, for getting caught short today...

Negative jobless claims did not affect strength in the pre-mkt strength and the Financial's are the strongest. I'll be letting go of the SKF soonest, unless the market opens-higher and then quickly turns-tail lower. From there, I will try to survive the SDS and SRS, but will let those go as well, within the first 90 minutes, unless the market is trading below the opening levels. That would then leave me lite and holding a smallish long position, while lying in wait.

As I said yesterday (somewhere), I can fight like mad for a day, but the next day I have to back-off (learned this the hard way, naturally). I'm not going to fight the chop and, at this writing I'm not confident that we won't soon be blasting through to lower-lows; so the net-net obvious action is to move aside and sharpen spears while waiting for better.

If we open at the highs today and begin moving lower, then I'll know I'm in the right place and I'll instead just be looking to add, depending. The adage I love - if your head should be handed to you and it is not - then you are probably in the right place.

Right now though, it appears my head is plattered.

Good luck today.

Wednesday, February 25, 2009

Night Gallery


Strike That (whip-it good)

Wretched close today (for me included) and potentially ominous for tomorrow.

I ran from the bull as soon as it appeared today, but the bears who held patient today did very well. I whip-sawed profits and frankly, wore out a bit of the blood-lust spirit along the way. This may be a sign that we're in the chop (we certainly were today). And needless to say, that is not the place for a momentum madman to be.

If we're not selling off with distinction tomorrow, I'm backing off and going on that harpooning trip after all. That close was a bear however - so we'll see.

Note from the Tweedfeed >>>. I re-allocated to net-short in the after-mkt, via SKF and SRS.

[Late note added - today's close smacked a bit of the Friday close, Feb. 13th; volume really surged late today following a failure of today's once-promising reversal]

Position: currently 1.4-to-1 net-short...

Currently Short (according to size): SKF-long (Fncl's Dbl-short), SRS-long (Real-Estate Dbl-short), AEM, SGY
(Note: above long inverse-ETF's SKF and SRS represent being dbl-short respective indices)

Currenty long (according to size): ATHN, MYGN, SEPR

Quick Note (reversed exposure)

I covered all but the AEM short and added GS back long - so I am back to net-long now (though still a small position overall)

More later - (ugly) trades can be seen from the Twit-log on right>>>

Hope Drubs Internal (this set could get bloody)

Fortunately I didn't hit the send button yet on that Bora Bora Bloodlust (spear-pooning expedition package). I'm right back trading the short side today.

While I'm no Elliott-waverunner, I know about psychology. Give somebody in peril a hope of surviving after-all but then re-drub them the next day instead, and the plate is set for an accelerated downside in hopeful feelings. I'm not predicting new lows here on the SPX (although I have considered that uber-likely at some point), but with the return to downward momentum and the psychology mentioned, we could see a much more dramatic wave lower - here and now (so far we're well on our way as the price-action is no slouch and while there are some names jumping on the tape, the internals are overall assuredly negative; at this writing breadth is nearly 4-1 negative on the Nasdaq and NYSE).

I moved into TWM late in the pre-mkt session and then hot-dogged out and back-in twice (sign-up for my Twit-feed to get this insanity live >>>). The third entry is of a larger degree and thus I'm back short and looking to bleed that higher (unless the mkt steadies itself).

This just in - Geithner announcing clarification on housing solution plan and Financials are suddenly roaring. I added two tranches long of Financial's double-short SKF

Locked-and loaded here, but will use tight stops on the SKF and TWM (it's not out of the question that the treasury announcement today changes everything (ha!).

It's also not out of the question that these announcements will start having less (goose-up) impact - watch and learn.

Position: currently 2.7-to-1 net-short...

Currently Short (according to size): TWM-long (Russell-2k Dbl-short), SKF-long (Fncl's Dbl-short), AEM, SGY
(Note: above long inverse-ETF's TWM and SKF represent being dbl-short those indices)

Currenty long (according to size): ATHN, MYGN, SEPR

Tuesday, February 24, 2009

Flat and...Free


Nice rush higher.

I took profits on the GS/AAPL trades long, after selling the LOPE earlier (unloaded LOPE only because others in that group were breaking down again today).

I am very light now overall, and slightly net-long (call it mkt neutral). I think this market will need to probe a bit, but I'm not exactly confident either way (Momentarily!). I don't want to fight a re-trace higher, since those can be so wicked, but I'm not so bullish in the near term that I wasn't going to sell into an emotional thrust higher.

Hence, I'm perusing issues of Hunt and Garter and considering a new tour of the low seas to get in some much bleeded RnR; we'll see. I'll hang around to trade long again in the last hour if the power is still holding up.

Currenty long (according to size): ATHN, MYGN

Currently Short (according to size): AEM, SGY

Updated Portfolio (greater than 3-1 net-long for moment)

I left out my overall position on the last entry (been a moving target lately).

Also, though I reduced AEM short today, I am looking to add short up near the 200-day on this bounce (200-day currently 52.11)....

Currenty long (according to size): GS, AAPL, ATHN, MYGN

Currently Short (according to size): AEM, SIVB, SGY

Quick and Quick

I did get a lot smaller here today, covering about 50% of my short exposure in the opening 15 minutes of trading and then another 25% as the market was selling-off on the ill consumer confidence number.

Perhaps this was a little cute, but I moved into GS and AAPL for swing trades long (I'll blow-out today if they fail in any way - check my Twit-feed on the right >>>). I'm net-long at the moment by a ratio of 3-1, but the overall position is still well-reduced and when I let go of the GS/AAPL trades I'm only slightly net-long.

If the market stalls today, I'll just get smaller - in other words, I don't mind swinging like Darwin here, but if we're just going to chop without any real direction (congestion), then I'm going harpooning instead.

Monday, February 23, 2009

Orderly!

Visiting hours are over, pulses are weakening, bed pans are brimming and the room stinks of factual matters (fecal matters). But hey, we still cannot plunge the averages with anything more than modest, mousey bars on the charts.

Okay, it was sufficiently ugly today and I'm very glad to have re-positioned heavily short in the opening 30 minutes, but this is nothing like the uber-drubbings of last September and October.

This then, is the orderly chapter of our market's demise. No major panic, no major failures, nothing but a good-old game of chicken between the bears and the major averages struggling with support.

Bulls can point to the fact that so far, only the Dow and the Transports have broken their November lows, while the Nasdaq, the NDX, and to a lesser extent the Russell 2000 and the NYSE are above such levels (a positive). Bulls can also argue that new 52-week lows are but a fraction of what they were last October. And as far as the SP500, well, sure it is in danger of breaking the November level, but there is a preponderant congestion of Paleolithic-support on the long-term charts - right here!

On the other side, bears can point to any number of factors, not the least of which is that the interview period with Dr. Kevorkian is just about over.

Myself, I really don't care. I make it a point to be as boring as humanely possible and simply mop-up the remnants of whichever force is bigger. And on that front it has been a nice ride lately, but given the dramatically negative internals in several of the latest sessions, being short here I would have expected to have a lot more blood stains in my pockets. The market is selling-off with more of an orderly indifference than with any real panic.

Okay, tomorrow is another day and the SP500 is indeed on the brink of breaking Paleolithic lows, so I haven't thrown in the red-towel just yet. But there is no lack of crowding here on the short side these days; the reflex, counter-rallies are powerful, even if brief; and the orderly demise, if it continues in this fashion, is just going to set-up a larger counter-punch...eventually.

If we aren't breaking badly tomorrow, I'm going to get much smaller here. I don't have much left on the long-side, but I will bring in most all of my shorts if this is to be the case. From there I can trade hard intraday (such as today's SRS trades, broadcast via Twitter on the right<<<), trade much less if the internals are not clearly one-sided (negative or positive), or trade madly and insanely (as I like to do when the sets come in), should the action be resolutely one-sided).

Then there is this over-lay chart which is making the rounds. It might be alchemic hocus-pocus, but it might mean we're ready to retrace a bit higher now before Dr. Kevorkian can get his gloves dirty.

Currently Short (according to size): XEC, VNO, AEM, STRA, GDX, SIVB, HST, PNC, SGY, PTRY

Currenty long (according to size): ATHN, LOPE


Watch for Germs


The Feds had better have a fresh goose-the-market plan ready for later today, because this pig doesn't look like it is able to fly.

Nasdaq has already breached last week's lows and the SP500 may not be far behind. Commercial real estate is the ugliest on the tape today and that has been the area of my (short) attacks; added copious SRS (dbl-real estate-short)+ VNO-short. Additionally, I've been reducing longs (AVAV, my largest position coming into the day and for some time, was sold as it broke the 50-day m.a., but I unloaded others as well).

Again, an oversold condition is not a bullish indicator, unless the market is actually rising. If this is what the market looks like in bounce-mode, I'd hate to see it sell-off again.

My weekend bounce-list of longs is downgraded to a watch-list for now. If the market re-gooses back to life later today, I'll adjust, but as of now I am greater than 3-1 net-short.

Currently Short (according to size): SRS-long (comm. real-estate dbl-short), VNO, XEC, AEM, GDX, STRA, SIVB, HST, PNC, SGY

Currenty long (according to size): ATHN, LOPE, HOC (new, pairs w XEC and SGY oil-shorts)

Saturday, February 21, 2009

Bounce Trounce (eligible long-bombs for reflex rally)

The trend is down and contrary to common (mis)belief, oversold is not a bullish indicator. That said, this appears to be the beginning of a swing-shot reflex in the upward direction and if that is the case then I need ammunition in order to hold some shorts (and more importantly, re-accumulate more of the broken ulglies).

If we gap to lower lows on Monday, this becomes more of a watch-list. But if we're going to retrace a standard 38 to 62% of the recent drub-wave lower (retracing from intraday lows on Friday), then the below list becomes a lot more useful. I am long some of these names already (scroll down to previous entry)

Of course, don't do what I do, but feel free to sign-up on the right for the blow-by-merciless-blow Live Trades Feed via Twitter >>>

Note, except for the Fertilizer group (which has ascended rapidly recently), every name below come from an industry group with a relative-strength rating in the top 22% (as ranked by Investor's Bus. Dly's current 197 industry-group screen). The Fertilizer group is now ranked 61/197, or top-31%...

Long Bomb List for whatever upside we might be in for:
Medical/Genetics/Biotechs/Med-Svcs:
MYGN
CEPH
HMSY
GILD
GENZ
ALXN (>38.13 only)
GXDX (very thin)
GTIV (>26.43 only)
SEPR (>16.35 only)
ITMN (reports 26Feb; 18% shorts)
VRTX (>32 only; 10% shorts)
BRLI
PMC
OCR

Tech: Medical Sftwr/Entrprs Sftwr/Wireless-Eqp/Military-Tech or Tech-Svcs:
BMC
AVAV (eps due early-march, no date yet)
IDCC
NCIT
MANT
ASEI
ATHN
CUB
TSYS
SXCI
OTEX

Chemical-Fertilizer:
POT
MOS
SQM
CF
AGU

Oil/Gas: Refiners and Transport/Pipe groups only:
HOC (>21.34 only)
WNR (eps due soon, no date yet)
IOC (>15.98 only)
NRGY (>22.48 only)
TSO (>15.97 only)

Retail: Auto Prts/Leisure:
ORLY
AZO
MNRO (very thin)
NFLX

Comm Schls:
COCO
CECO
LOPE
(Pairing lope here with same-group shorts STRA and/or APOL, <80.10)

Friday, February 20, 2009

Let Them Live (for now)


Alright, it was a good thing I was waiting for the last 90 minutes to go completely medieval with index shorts.

Prior to doomsday on the clock, the market goosed higher with merely a whisper from the Treasury (and perhaps a back-room PPT plunge). Nothing entirely substantive really, but as I'm standing in front of no freight trains in this market I shifted my allocation...all the way to slightly net-long.

Even the really great plans change sometimes, what can I say? I put my false-fangs back in the medicine cabinet and harpoons are leaning-up again in the corner. I'll write more about the market over the weekend. I can't say I like it, but instead it is a question of when and where to get more short.

The Gold short is still an early idea, but it is certainly interesting. There are terrific divergences in the technicals; the space is absolutely bloated (crowded); virtually every head on CNBC talks about gold (I took my first stab at GDX short in the aftermkt just now as they were wooing it up almost 2% from the closing pr. on Fasmoney; every 3rd commercial on CNBC is related to gold; the miners stall before the metal, traditionally and they are diverging terribly; and the IMF could potentially end up a seller soon to pay for bailing out E.Europe. [I'm writing a little quickly here, sorry]

I won't hold if it is still rallying Monday, But when the trend turns here I am getting short and hanging on for a bit of a ride. I like AEM and AUY, below their 200-day moving averages (which implies I could get stopped for now on AEM (a higher high there would likely do it).

More later - Bone weekend

Position: currently 1.25-to-1 net-long...
Currenty long (according to size): AVAV (increased today; bench new on 50-day), ATHN, CEPH (new), LOPE (new), MYGN (new)
Currently Short (according to size): XEC, AEM, GDX, STRA, SIVB, HST, PNC, SGY

Tapes of Wrath

We're seeing a reasonable flush today and I'm just trying to feign boredom until the final 90 minutes; when I get in this car for a real drive.

I scaled into some long shares early today, but out-did that with a larger SDS position. I've since reduced the SDS at handsome heights, but I am looking to push even harder there in the final 90 minutes.

This is why:

1. Breadth is totally severe today on NYSE; currently 10-1 negative this deep into the session.
2. Bear markets do not bottom on Fridays
3. Old School, when Friday option-expiration went badly - the following Monday is worse.

I don't see why we shouldn't close on or near the lows today and I don't expect to be any less than 2-1 net short until Monday (when I will scale-out to market neutral or net-long, depending).

Unless something falls from the sky and changes my mind, I'll be 4 or 5-1 net-short in the final hour today, but then back to ~2-1 by the close; via heavy SDS, SKF and/or TWM inverse double-short trades.

I see some shorts reducing out there today - Myself, I'm playing chicken with the closing bell.

Sign up for my Twitter on the right to get these trades delivered live <<< Currently Short (according to size): SDS-long (SP500 Dbl-short), XEC, PNC, STRA, AEM, BBT, VNO, SIVB, HST, SGY
(Note, I am currently long inverse-ETF SDS, which represents being dbl-short the SP500)
Currenty long (according to size): AVAV (increased; bench new on 50-day), ATHN, CEPH (new), LOPE (new)

Thursday, February 19, 2009

New Live Twitter (Follow this Twit)

Okay, I'm done trying to convey all trades in blog form. Beginning now and as long as this is working out, you can get all trades fed live to your own respective Twitterboxes. I will continue to outline my current overall position on der-regular entries, but no more will anyone have to click incessantly to see if I've wiped my ass of that trade or not. Sign up on the right >>>

Prey to Play (or else, wake me up Monday)

I traded heavily into the Nasdaq-100 double-short (QID) in the final 20 minutes, adding, adding, adding and then unloading all but a chirpy-chunk at the close. Face it, the last hour was plain-vanilla ugly and although I re-positioned my re-positioning in the course of the day, that last hour more than made up for any troubles.

If this market is capable of breaking hard, then tomorrow and following-through into Monday is a good setup. Old school, in a bear market it is the option-exp. Friday's and especially the Monday's following where bulls have to grab their nads and pray - while bears grab other's nads and prey.

While I am not super confident we're on the brink of serious drama just now, I think EW measurements should be shelved for tomorrow and instead just follow the conviction of the internals. If they become severe again, with 4 to 5-1 negative breadth+ on strong volume, there should not be any reversal Friday (bear markets don't bottom on Friday's) and targets other than the clock on the wall are ill-productive (since it will close on or near the lows in that case). If we bounce instead, then sharpen your pencils and let me know how far we'll retrace - you guys are geniuses.

We'll talk more about how Monday might be shaping up later tomorrow. We'll probably be falling asleep with boredom, but maybe not. If you see a bloody tape, if bovine bellies are floating upside down in barrels, then I'll be extremely active here, suited up in 3-piece rubber woot suits, harpooned-scissors in hand and Che Greenspan chanters here behind me.

Oh yeah - Cheers to Proctor Cramer for sending us AEM. I'm going to lean and lean on this one as long as we keep below the 200-day pivot (can you believe his favorite gold stock is now under the 200-day, the day after he plugged-it (again) - anyone else smell a rat?!)

Position: currently 2.85-to-1 Net Short
...
Currently Short (according to size): QID-long (SP500 Dbl-short), XEC, AEM, STRA, BBT, VNO, SIVB, PNC, LOPE (looking to bail here; big earnings after-close), HST, SGY
(Note, I am currently long inverse-ETF QID, but this represents being dbl-short the NDX)
Currenty long (according to size): AVAV, ATHN, OTEX (thin)

Sans Hedge - bring on the red meat!

Stopped-out of SSO, 19.66 (poor stop selection) and added LOPE short, ave. 17.36 (the education group is breaking down today, following ESI's 10k last night and the mention they had to expand their unsecured loans).

Over-trading this SSO-insurance cost me today, but I'm still well in the green and back to the bloodwagon now once more. I'll continue to (re)protect if the market exhibits strength, as I have too many names short to play rope-a-dope in a counter-trend (whereas I can unload the insurance very quickly (single position) when the pigs begins to squeal).

Blood May be Thinning

Wild and woolly here today - and back to market neutral.

Blow-by-blow: I bot back the SSO half at 19.75; bot OTEX, ave 34.01 (thin); covered AXA (down on earnings today; exit for now), 12.68 ave; covered half SIVB, 16.55; covered CXO (too soon), 22.00; covered AFL short, 16.90; added to PNC short, 24.95 ave; cut six toe nails and made a Georgian Peanut sandwich to feed the family.

I'm settling down now for a bit as the market starts to quiet some. sure.

Frankly, the good wave lower we saw earlier was not making the greatest impression here (we had fear and panic, but the mkt was unable to really break into new-low ground). Some other positives (today at least): oil is bouncing; breadth was never very negative and now is back to flat; Put-to-Call numbers today and yesterday have been high; Ouside of C and BAC blood, the water is clear of significant chum; Bonds are selling (inverse flight-to-safety); Dollar is down; Jobless claims didn't cause any issue and PPI prices were up, not down.

Currently Short (according to size): XEC, STRA, BBT, VNO, PNC, HST, SGY, SIVB
Currenty long (according to size): SSO, AVAV, ATHN, OTEX (thin)

Re-Lean Short

Sold half the SSO (short)hedge, 20.05 and I scaled back into PNC short (ave. 24.96). Also added new Short AFL, and covered CXO (oil is strong today...I'm holding onto XEC and SGY short). Still up on day slightly here, but will be excited if things really fail. C is sure acting poorly (C-sick?) and education group is breaking down (ESI, COCO and others are eating their own children, while APOL is brking the 50-day in civilized fashion); Railroads are making new 52-wk lows.
[Update: now short STRA, 189.78 ave.]

Early Trades (hedging shorts some for the moment)

Several positives are working so far today and breadth is quite firm. I went long SSO as a brief hedge, 20.35. I did sell the POT trade at 85.55 and I did double-up on my SGY short at 5.90. Accounts are higher here on the day so far (slightly), so the longs and the short-mix are not so bad...but so far neither today is the market.

Wednesday, February 18, 2009

Slick Ward (List of Eligible Oil Shorts)

I'm back to net-short (1.33 to 1), after firing fresh into wounded sucklings, oozing mostly from tarred and feathered oil pits.

God these were ugly on the tape today.

There was an attempt of a bounce in the overall market today, but it went nowhere in the end. Nasdaq was higher by 1%, but gave it up and finished slightly lower. Tomorrow is another day and another chance for a bounce, but I don't have all week. Weekly jobless claims come before the open and then Friday is an option-expiration session (equates roughly to guard-your-privates-and-run action these days). If the market cannot show any strength after the wrenching the day before, then I am looking to lean on it again. I did, but not yet with any sizable index shorts (those could come tomorrow, depending)

I mentioned oily rags. I saw many Oils making lower-lows today and I took aim at those bleakest, carving into new-low territory on strong, rising volume. I am selling-low and looking to cover-lower. In other words, these might be quick-plays but then I think they they'll set-up again for more damage later. The idea is to cover on any sign of panic, or gradually scale-out on general weakness, if the action is more subtle. If they revive with sudden life instead (strong volume advance), I grab my balls and run away.

Here is the short-list for the Oil Uglies. I'm short a few now, but they all show potential. For reference, last weekend's list of Financial Death Troves can be seen here. My current positions are detailed just below...

Slick Ward (List of Oil Shorts):
XEC (reported wed., 18feb)
CXO (reports 24feb)
SGY
PTEN
PBT
SFY (reports before open tomorrow, 19feb)
PWE (reported aftr-close today, 18feb)
NBR (reports 24feb)
HGT (thin)
DVN
RDC (reports 26feb)
SE
ROSE (reports 27feb)
CRZO

Currently Short (according to size): XEC (new), BBT, SIVB, VNO, HST, CXO (new), AXA, SGY (new)
Currenty long (according to size): AVAV, ATHN, POT (trade-only)

Midas Torch (Cramer is a rally killer)


Note to self: Don't buy gold anytime soon. Look for any decent short entry on AEM instead.

I'll be fair, Jim Cramer is not a complete douche. An absolute boilhead and a pain to listen to, but no idiot. He's full of reasonable insights and (ham-handed) advice.

But face it - the man is a rally killer. Where he sets his sights on specific opportunities, as in names of specific equities - that is where I move to the other side of the ship. The man is a miracle...an inverse genius.

Even after his followers have bid-up his pics the minute his mouth opens, the performance track record using the prior-to-pump price is just dismal.

Gold has made another huge run and it is a rather popular choice these days - a logical investment since all the world is printing money and ballooning respective balance sheets, right? Once this little deflation thing is back in the corner we'll see rampant inflation and gold will climb to $1,500, on its way to $2,000.

Okay, fine, perhaps, sure.

The last time gold had made a big run higher, Cramer repeatedly pushed to viewers they should buy AUY (granted he did clarify AUY was more speculative than an ABX and more conservative investors should look that way instead). But for some months Cramer pushed and pushed this Yamana GOLD. It was gold + growth and he was lathered-up over it.

When Cramer invites a ceo to Mad Money, I will not go long that stock. When Cramer invites a ceo 2 or 3 times to Mad Money, I am getting short. AUY was simply doomed.

Tonight's plug on (current gold stock of choice, no more mention of AUY these days) AEM is not his first. It's come out of his mouth several times and a featured promo-plug now more than once. I do not know if tonight was the first ceo/cfo appearance, but the message to me is clear. Put it on the get-short list and don't ever buy this stock again.

Let Cramer's crowd make the money...[call me silly]

Oh, regarding gold going ever-higher (similar to the argument in early '08 in fact) - the thesis that fiscal turmoil in so many nations will create a catalyst for hundreds and hundreds of dollar-gains to come? Again, sure. But think of this for a moment:

Reportedly, the 3rd largest holder of gold reserves on the planet is the IMF. That is the same IMF who is going to be coming to the rescue of Eastern Europe, loaning ginormous amounts of capital to these nations in peril.

How in Gold's name are they going to raise enough money?