Tuesday, March 31, 2009

Quicknote (slight darkward shift)

I shifted away from my aggressive-long stance and into the general direction of neutral, ahead of the final trading hour and increasingly so into today's negative close.

Gone for now are GS and TSYS longs. New shorts included a healthy degree of JPM (7%), RSH (4.6%) and...

After the close I was able to grab another financial short, new Cramer-promo FMER (5% position); complete with a 4% premium to the closing price.

Praise be Cramer.

Futures are selling some tonight, as GM is apparently going goose eggs. Tomorrow will be interesting. I have a little protection now - if the market can't regain any strength within the first 90 minutes I'm returning to the dark side. Otherwise I'm content to let go of the new hedges and roll long with the in-crowd yet some more.

Worst case for me, financials rock higher while growth names get nailed early. That would start my new quarter off wrong.

Pimp my Twitt for all the finer details >>>

Total Position: 4-to-1 net long, 93% invested

Currently Long (according to size): MYGN, NFLX, ARST, RJI, MNRO, PMCS, WNR, SNDA, CHKP, NVLS, LFT, TNDM, DRI, IOC

Currently Short (according to size): JPM, FMER, RSH, EGO

Gun and Stun (Q1 ending on high note)


Quick and dirty here for last trading day of the quarter...

The complexion today is strong - formidable, firm and yet stealthy-quiet. Meanwhile leadership continues to roll higher on the tape.

The quiet nature means I can continue holding my aggressive position (actually I've added further). When the move heats up and becomes emotional, or if the oblivion sell-signs reemerge, then I begin cutting back.

Like every other money manager worth his salt I'm gunning for my quarter; so cutting my spiel short today. I may hedge a tad at the close to lock-in some of these recent gains, but frankly I still see too many good charts out there to fear any new, unnatural disasters.

Cliff notes: As long as the action remains positive, without terrific volume, emotion or excitement then I can hold aggressively long. Once things heat up above the surface I will start scaling out towards a more neutral position (sooner if new shit starts flying into old fans).

Total Position: (call it fully long), 86% invested

Currently Long (according to size): MYGN, NFLX, ARST, TSYS, RJI, PMCS, MNRO, WNR, SNDA, NVLS, LFT, GS, TNDM, CHKP, DRI, IOC (cut this back today early, its 1st day on NYSE)

Currently Short (according to size): EGO

Low-cal window dressing is my favorite diet for leadership growth. Time for more coffee...Beast out/

Leadership is Live (holding like a rock)


I'm up early this morning, to insure the world is not for sale and the market is not going to gap-down into a new phase of oblivion.

I was impressed yesterday with the action in leadership growth, so much so that by the end of the session I had covered virtually all shorts, hedges and otherwise. The only remaining short here is the half-remaining EGO gold miner short (which is a Cramer, double-promo fade and being a gold-short, not likely to hedge against a negative market). I even reloaded GS long near the close.

In other words, I'm aggressively long.

I added some new names yesterday and outside of energy and high-tech, the higher relative strength stocks from Sunday's candylist of longs showed tremendous resilience. I will re-hedge in a hurry (and shovel much of this overboard) if we cannot get any traction higher; beginning now. But in the meantime I expect yesterday was the beginning of a new swing-leg higher for growth (one in which leadership should out-pace the indices in terms of upside). I'll continue to post live any shifting sands via the Twittfeeder. I'm not going to sit fully loaded and take body shots all day just because I think these stocks should have traded higher.

Time for coffee.

Total Position: (call it fully long), 78% invested

Currently Long (according to size): MYGN, NFLX, ARST, RJI, TSYS, PMCS, MNRO, WNR, SNDA, GS, IOC, LFT, TNDM, DRI

Currently Short (according to size): EGO

Monday, March 30, 2009

Warm Plunge?


Signals are mixed today.

The market internals are dreadful, with 88% of NYSE stocks and 81% of Nasdaq stocks so far declining on the session. The major indices are trading more than 3% lower, led by the NYSE; down closer to 4%.

At the same time though, leadership growth stocks are notably resisting pressure; in fact many of the leadership names have reversed higher today, in spite of the ugly tape.

I increased hedges early, scaling into a large percentage of TWM; which positioned my accounts net-short for the day (accounting for TWM and SRS leverage). At the same time I began covering individual shorts on the weakness, letting go of RSH and ELOS and reducing EGO; and soon began adding new leadership long (NFLX, TNDM and DRI so far).

In other words, I am presently hedged, but when the hedges come off I am suddenly going to be aggressively, almost fully long. This might run counter to the idea that I would sell sell and sell on a break-down in the indices, but frankly I am seeing too much continued strength in the leadership and the sell-off today has only further illuminated this reality.

If they cannot sell on a day like today, they are going to jam higher once pressure subsides. I don't have any comment on when pressure will subside, but with breadth this severely negative I would argue the odds of a reversal for the overall market today is significantly low. And don't do anything I am doing, but I am confident that leadership is going to higher-highs in the not-distant future.

So much for my Friday rant...I guess buying a further pullback may not be jumping in front of an eager bear after all. We'll see.

Currently Long (according to size): MYGN, ARST, NFLX, RJI, TSYS, PMCS, MNRO, WNR, SNDA, IOC, LFT, TNDM, DRI

Currently Short (according to size): TWM-long (Russell-2k Dbl-short), SRS-long (US Real Est. Dbl-short), AXA, EGO
(Note: inverse-ETFs TWM and SRS represent being dbl-short the respective indices)

Sunday, March 29, 2009

Updated Long List (eligible growth for a strong tape)


[scroll below to skip the explanation...]

The below list comprises my eligible longs for the coming week, based on a compilation of various relative strength screens. I have removed most of the names which are either very thin, or have a very high degree of short interest.

For most of these, I need a strong tape to consider purchase or holding. Briefly, here is how I use the list: If a trading day is strong, or if it is mediocre but I am too short-weighted for the action at the time, then I look to the Industry Group Rankings* for that specific day. From the top-ranked groups in that session I then look to the eligible names below from the respective group(s); this then may generate a trade for just the day, but usually I set out as if it will be a swing trade at least (adding then on strength and reducing or eliminating on weakness).

In other words, if I want to increase long exposure I look to the leadership of the day and quickly scan my names below in that day's leadership categories and quickly attack the stronger set-ups within.

*Intraday Industry Group Rankings stem from Daily Graphs (subscription service), which includes intraday rankings of IBD's 197 industry groups (15 min delayed, unfortunately). I find the screen most beneficial 45-to-90 minutes into the session (there are less reversals at that point, yet it is still early enough to capture further strength from that day's tape).

This briefly describes how I go about adding names. This is in no way investment advice.

Updated Long List (eligible growth for strong tape):

Semi's-Manufacturing (this group still exploding in RS):
ALTR
SWKS
NETL
PMCS
SPIL
CREE
DIOD
CRUS >4.43
OIIM (very thin)
HITT (thin)
TSM
CY
XLNX
MRVL
NVDA
MCHP
INTC
SLAB
ZRAN
BRCM
MPWR >16.67

Semi's-Equipment (improving rapidly in RS:
NVLS >16.50
FORM
UTEK >12.90; thin
VSEA
LRCX
CYMI
AMAT (liquid, but lower RS)
KLAC (liquid, but lower RS)
CCMP (thin)

Oil/Gas-Refining:
WNR
ALJ (thin)
IOC
DK
ETP >37.40
HOC
UGP

Oil/Gas-Transport/Pipeline:
MGG
NSH (thin)
WES (thin)
EPE >23.20; thin

Internet-Network Solutions:
ASIA
FFIV
DRIV
AKAM

Software-Security:
ARST
CHKP (>21.90)
MFE
MVSN

Software-Medical:
MDRX
SXCI (thin)
CERN
CPSI (thin)
ATHN

Medical-Genetics/Biotech:
MYGN
LIFE
BIIB
ALXN
ACOR (12% shorts)
GPRO
SEPR
CRXL
OPTR (thin)
IMGN
ISIS (10% short)
ONXX >30.65
ALKS
THRX (13% short)

Medical-Generic Drugs:
MYL
TEVA
WPI
CSKI (very thin)

Medical-Products:
EW
STJ

Retail-Auto/Parts:
MNRO (thin, but volume increasing)
ORLY
AZO
AAP
CPRT
AN (16% shorts)

Software-Financials:
EPIQ (thin)
LFT (thin)
PEGA (thin)
ACIW
ADVS (thin)
INTU

Retail-Discount:
BIG
FDO
DLTR

Beverages-Softdrinks:
HANS (old Hans, believe it or not)
KO

Software-Enterprise:
BMC
TSYS
SY
TLEO
OTEX (13% shorts)

Telecom Svcs:
TNDM (thin)
EQ >38.28
CBEY (thin)
Q

Telecom-Wireless Equip:
STAR
QCOM
PALM

Retail-Leisure/Electronics:
NFLX
BBY

Internet-Content:
SNDA
NTES

Internet-Network Solutions:
ASIA
FFIV
DRIV
AKAM

Bldng-Hvy Constr:
PWR >23.55
GVA
ACM >25.90
URS
SGR (reports 8Apr)

Chemicals-Fertilizer:
SQM
TNH
SMG

Retail-Clothing/Shoe:
ROST
ARO
BKE (11% shorts)
CTRN (thin)
DBRN
AEO
GES
TJX
HOTT

Retail-Restaurants:
DRI (12% shorts)
PZZA
EAT
JACK
BKC
CBRL (18% shorts)
SBUX >12.15

Internet: E-Commerce:
AMZN
GSIC

Honorable Mentions (most hail from a lower-ranked industry group):
GS
MS >25.20
OCN
SF
SNX
TECD
CEO
DTSI
BEAT
NICE
DLB
TWGP
VNUS (thin)

Saturday, March 28, 2009

Night Gallery (Burjee jumping)

Updated long list for aggressive growth will post here tomorrow. While you're waiting with baited breadth, have a leap off of the tallest building in the world...

Friday, March 27, 2009

Anti-Genius Formula (is in effect)


I don't like bold calls, so you may as well stop reading now.

But sometimes I can deduce strong potentialities based on observation and process of elimination. Today's session was a dusty jewel for me. A jewel because I figured out how to game this market next week, and dusty since my accounts gave back a chunk of this week's tidings.

First, I need to admit - I hear voices. In another room (the room where several caribou dry dangling in the pre-winter months) I have the TV on CNBC. I've tried every combination with CNBC (volume-off, w screen-on; screen-off w volume on; TV off all-to-god-damn-gether) and this is the best. I keep the volume at just barely audible levels and easily ignore 95% of the noise. However, if there is breaking news, a bond auction gone bad, an Airbus floating in the Hudson, an interview with Jamie Dimon which airs simultaneous to a breaking Bernie Madoff scandal and the futures are about to suck-out the tide in preparation for tsunami tselling, I get to hear it live (or close to live) and I measure the market responses on my screen to the tone of whatever the event. If there is an add for denture cream playing, where a host of drying weasels older than even me sing praises about their lack of oral ooze, I don't even realize it anymore. That stuff simply stores like bile in the deep reaches of my bitter being.

Today was a big CNBC day. Bankers were trotted-out for interviews following their let's-get-on-the-same-page meeting with O. There was nothing especially meaningful about that. Erin-somebody was lathered-up having the scoop of the hour with her own sit-down of the "team players." The especially-credible Bank of America ceo was mid-sentence burbling something about profitability, when he actually stopped himself (clever little pig) and said oh, it is too late in the quarter to disclose this. I guess that is how you suggest juicy good news, but you've really said nothing at all as far as in-house lawyers are concerned.

Nice guy.

But something else today was money in my future pockets. There was a cumulative gem, whispered softly throughout the day and drumming passion into my brainpan by the end.

There was 5 and maybe 6 heads talking today with the same basic theme - that the market has had a dramatic rise, it needs to cool off some (which they say would be healthy) AND (here's the money part) they would like to buy the market on a pullback.

Well, arms to the sky for me. Not one of these guys mentioned buying today (on the pullback!), but instead they are waiting. This may seem minor to you, but it puts sugar in my many coffees over here. I have seen this so many times I can pretty much move to auto-pilot and reek out-performance. I can spend the weekend looking for leadership stocks and buy them moving higher. If those fools get their chance to buy lower I can sell mine down their throats and sell their asses short. I can wax my wooden teeth and use the denture ooze to wallpaper spare bedrooms.

If losers get their way and they can buy this market lower, well that is going to be a terrible place to buy and they will get wrecked; heads on a platter. At the same time, if they do nothing and the market keeps rising, they are going to miss out; heads down in disgust. You might be laughing, but I live for this stuff. This is how the psychology works in a strong market move (call it a bull trend within a secular bear market if you prefer, but it works for every strong move which has real demand).

A good market is not going to let you in and if you are simultaneously under-invested here + you refuse to buy the first pullback of a heated rally, the formula = you-miss-out. And if you get that pullback you are craving - boom! You're going to take a hit because the market is done rallying.

In other words, these brand traders cannot make money in this brand of market - thus, if he is in I am out and if he is still hoping for a pullback then I'm pushing for higher.

Real demand does not let you in easy. One has to pay (or cover short) at prices that feel too too high. If the market let's those on the outside in, well I'll let them make the money - I'm out of here (or getting short). But if the market is going to keep a firm bid, then the best cooperation this group is going to get is sideways action in the major's while the better stocks trend still-higher under the surface. In other words, they make no money even though the environment is great.

If you're short and you didn't cover anything today, then you certainly don't want to cover on further weakness Monday. Great old adage - if your head should be handed to you but it is not, then you are in the right place. But if you are hoping to cover lower on Monday and this market regains upward momentum, then I am going to push on you until I know you can't stand it any longer, and at that point you can have my shares (you'll need the rest).

I think I've repeated myself enough. I'll give you a break from here.

My bold call? Today was your pullback. The market is going to bid-up again beginning Monday, or at least churn quietly while great action in aggressive growth leadership resumes. Otherwise, if we pull back further and let these goofs get on board, well bar the door for whatever downside is in store, because we'll be finding out soon enough.

Cliff notes: How many times have we seen it? Those who missed the rally (or got caught short) and want to buy lower will not get cheaper prices unless the market is going to get cheaper still. Pay up for quality (today was the only pullback you should expect for now). And if things start to look like bargains again then this move is already over.

Note, here is the aggressive growth leadership list from 2 weeks back. I will update a new list this weekend.

Bah weekend!

Total Position: currently 2.6-to-1 net long, (83.5% invested)

Currently Long (according to size): MYGN, ARST, RJI, TSYS, PMCS, WNR, MNRO, SNDA, LFT, IOC

Currently Short (according to size): AXA, RSH, SRS-long (US Real Est. Dbl-short), EGO, ELOS
(Note: inverse-ETF SRS represents being dbl-short the respective index)

Camouflage (can't put my finger on that?)


A bit of my yang getting yinged at moment while the longs give back some of their recent juicy rise. So far action on these resembles a healthy-enough, quiet and low-volume tone, but at the same time I view every day as the potential beginning for the next end of the world; so my guard is up on this decline.

I added hearty amounts of hedge, via TWM and SRS. TWM because the Russell-2k is the weakest major on the day and SRS because commercial real estate still having much more trouble getting off the mat than things like banks (and other beaten-down uglies).

If this market can firm today, then I see no reason aggressive growth cannot then rush to quarter's end on Tuesday (on the heels of a fresh pull-back pause, in that case). I will let go of hedges and re-increase exposure there if it develops.

On the other side, I will club anything I can find short if the majors can manage to finally break something on the downside.

Easy enough.

Currently Long (according to size): RJI, MYGN, ARST, TSYS, PMCS, WNR, MNRO, SNDA, IOC

Currently Short (according to size): TWM-long (Russell-2k Dbl-short), AXA, RSH, SRS-long (US Real Est. Dbl-short), EGO, ELOS
(Note: inverse-ETFs TWM and SRS represent being dbl-short the respective indices)

Thursday, March 26, 2009

Root Ripping Action (tape remains positive)


Today is perfect. Perfect and boring.

Perfect because the internals are clearly positive (again), my portfolio is flying, and yet the majors are only quietly higher. Having had my share of sharp sticks in the eyes, I can attest - this is better.

Obviously we see the market action only as it refers to our current position, right? If I were positioned short I should see today's action as ridiculous, unfounded and bound to fail any bar now, yes?

I say this because I know how easy it is to be subjective, to see every chart and move in the light which best justifies our (losing!) position. Bears know what I'm talking about.

Naturally, this defines me as some smug bull barker who is talking out of his ass and is going to have a new one torn very very soon and the only reason it hasn't happened yet is that I was saved again yesterday by the Plunge Protection Team (PPT), etc. etc.

Truth is, I'm never really bullish. I can say that with honesty, since I trained myself for years to hate all stocks. It's true - I hate them all. If I ever find myself getting sweet on a name, I immediately kick it out of the portfolio; not kidding.

In fact, I despise this entire game. If I could make a living, I'd rather have root canal! As it is I'll never have root canal because I hate dentists also - those shinny-toothed, silver-haired rats, gassed-up and rummaging inside endless rotten mouths with all that new dental technology. God I hate the dentists - let someone else have proper teeth.

Okay, I was lying to you just then about dentists. Those creeps are really nice beneath that graying skin, I am sure. But stocks I hate - long or short.

Don't fall in love with your position and/or outlook, my friend. That is the message.

Some note on my (dreaded) position: MYGN gapped-up on a 2-1 stock split. I sold at the open and bot back closer to the breakout pivot. I am happy to continue with this name above that pivot of 44.20; SNDA gave me a re-entry long as it was downgraded by a small firm. I'm re-building this one (sold yesterday), beginning at the 10-day and scaling-in higher (still small, 3.4% at this writing. Note, I scale-in higher, not lower); TSYS is attempting to breakout and I reloaded that one again long. This one a bit thin, but today's volume is running > 2x's normal and rising from yesterday's rising vol. I will not hold this at the close if below the 9.93 pivot; ARST, which I loathe to hold already is attempting a breakout. I would be initiating long here, but I have already a 7.7% position and may not increase, depending; RSH, which I re-entered short yesterday is ramming higher on the heels of BBY's blast-up. I'm holding in so far, content to use the 50-day MA as a bench on closing basis (currently 10.02). If it's to close slightly above that level, but volume remains low and not rising > yesterday, I will take it overnight anyway; Oh yeah, I was able to finish Cramer fade EGO, short in the premkt >9.60 ave. Scroll to previous post for full monty on someone i love - JC.

Refer to the Twitt-trough for keeping up with my hated trades. Good luck out there.

Total Position: currently 3.14-to-1 net long, (86.5% invested)

Currently Long (according to size): RJI, MYGN, ARST, GS, TSYS, PMCS, WNR, MNRO, IOC, SNDA

Currently Short (according to size): AXA, RSH, EGO, ELOS

Wednesday, March 25, 2009

Shorting Cramer's EGO (El Dorado Gold)

Give it up (hard!) for Cramer's latest multiple promo...Go Go EGO!

I was able to get off some EGO short in the aftermkt, but orders were only partially filled at 9.49 and higher.

Gold miners are acting well lately, but this is Cramer's second promo of EGO and he invited the CEO of the company on the show tonight. That's enough to make this one suspect and worthy of taking the 4% of Cramer push-premium (from the original closing price) to see if this one resonates downward.

I will try to complete an initial 5% position early tomorrow. Usually I look then cover early, after hype has worn away and the artificial premium dissipates (risking of course, that he struck a chord and price does not cooperate after the mouth-hype is dry).

But after shorting his FSYS ceo-promo on Feb 2nd and covering the next morning for a quick profit, I tried and tried but was never able to borrow the shares again until (sadly) the stock was simply obliterated (that was within a few shows of his XEC Speculation-Friday shin-digger in fact...yup).

So I am rethinking how I play Cramer now. I've scalped this man's plays for over 3 years, but now I think the red-meat is better than a few 60-minute bars of potatoes; we'll have to see on this one.

Oh, while I am not going to publicly accuse Cramer of pump-and-dump and/or bailing out friends-in-need who are connected with companies whose underlying stocks are about to plummet (simply because I have no direct evidence of his intentions), the performance of stocks which he singles out for multiple-promotion is notably terrible. Others have done quantitative work on Cramer's picks (Barron's as well), but my argument is that it has been the multiple-promo names which behave most egregiously.

Final note, it was AUY that was Cramer's growth gold play from over a year ago, one he promo'd on multiple occasions (at prices of 15 up to 20). "Yamana is the only true growth gold company out there"...direct quote from 07.

You've been warned.

Strike That (shorts are squirming still)


This was one of the craziest days for me in some time. I pushed long, then bailed and pushed short, then bailed and pushed long again late in the day. If I were younger I guess I'd be ready to go out and party.

As it is I'll settle for a soak and straight to bed to recoup.

In spite of the churn, I managed reasonable gains overall and I like my position here (even more, ha!). I kept up live on the spit-Twitts but you can see on a day like today that conviction for me only means I am willing to step hard on the accelerator. But if I then see congestion ahead, police cars entering the highway or I suddenly feel incredibly uneasy for no apparent reason, I begin to adjust regardless of what my conviction believes.

No wonder I didn't go into medical school.

805 on the SP500 remains the pivot for me to keep aggressive long and below 800 means I am running scared until I can shift heavily short. Below 790 and I start wrapping myself in cellophane and heading for the nearest ice-hole, unless I'm adequately short in which case I carve another cube of Elk jerky from one of these waning winter carcasses still hanging in the living room behind me and hunt down another wounded pup seal to short.

I re-entered the GS long at 109.60 today; perhaps I can sell that one now up at the 200-day after all (200-day currently ~117.50).

Also, the MYGN breakout looks for real. This one closed above the 88.40 pivot on > 3x's normal volume. I have a big profit here, so I will risk the entire barracuda by pushing like mad up on the day tomorrow or else bailing out instead if I get clubbed below 87.75 or so.

Easy game.

Finally, I did let go of the SNDA long today. Even though the stock is behaving quite well, it is now extended and has run up to the top of a base going back to late 2007. I would like to see this one build a bit of a handle (mammoth cup/handle chart then at that point); I will re-load on a good slice lower (expecting that low then to hold within a new handle), otherwise I will let this base a bit; or else let it rip to infinity and buy it back when it revisits support coming back to Earth.

Did that last paragraph make any sense?
-Beast out.

Total Position: currently 5.34-to-1 net long, (78% invested)

Currently Long (according to size): RJI, MYGN, GS, ARST, PMCS, WNR, TSYS, MNRO, IOC

Currently Short (according to size): AXA, ELOS

Quicknote (shift to shortside)

Big shift today, somehow still up here in accts on session. [typing fast - excuse the poor edit]
Below 805 (SP500) is my pivot to be more short than long and increasingly so if that worsens.
Trades are on the Twittspit. More here later.

Other new shorts today include MFC and RSH, to go with the QID. Previous shorts still held, AXA and ELOS. Longs greatly reduced, but still in RJI, MYGN, ARST, PMCS, WNR, TSYS, MNRO and IOC at this point.

Faster Faster Kill Kill

No time at moment as growth is flying on the tape today and volume is heavy; rising. Market breadth is extreme positive.

Money is being put to work today as the quarter end draws near. There are under-invested institutions and there are many who would like to gun for higher to make the quarter. The SP500 pulled back to the 805 area and that is the new line in the sand.

I'm taking this seriously, but I am also loaded long, having let go my hedges from yesterday early-on.

I will cut/trim winners later in the session. At the moment I may just push harder, depending. Today will be active. Follow the Twittfeed to follow the madness >>>

Total Position: currently 5.34-to-1 net long, (78% invested)

Currently Long (according to size): RJI, PMCS, ARST, WNR, MYGN, IOC, SNDA, STAR, MNRO, HMSY, UGP, TSYS

Currently Short (according to size): AXA, ELOS

Tuesday, March 24, 2009

5 Minute Rule (still long and wrong)

Don't kid yourself, boring is good.

On the heels of yesterday's vertical lathering, whereby Marsyas shorts hung in horror as skin peeled-back from virtually every resistance and wave-count level known to bears, today is pretty much a sleeper.

If I were holding short, only a gap-lower and continued drubbing would begin to suggest to me that I am in a safe place. Anything close to a healthy consolidation, or further market gains (hell forbid) would seal my bitter mood.

But today is about as boring as they come lately, and that is (still!) bullish behavior.

Fortunately for me, as I pointed out yesterday I am an idiot. Anyone in their right mind would not be long this market. And the higher this rises in the face of such stupid actions employed by such stupid officials - well, the stupider I must be to hang-in long.

Fortunately (for us fools), the stock market is not so possessed by reason. It is quite a different organism; quite inhuman. Isn't is questionable then that we should look at it with such a subjective, human point of view? But we are quite like that. The stock market is illogical, unreasonable even (bulls will share in this view), but we want to apply our own logic, our own subjective nature to this grotesque alien organism.

According to most of what I am reading now, it is unreasonable for us to rise further here. We haven't hit bottom yet; they're just throwing money at the problem; the FDIC is now the bad bank; MACD and NYMO oscillators are at extreme overbought levels. I could go on and on - my daily email from Seeking Alpha is just loaded with negative articles today.

So stupid as I am, I am very careful not to short a market where the majority of participants are doubtful or all-out bearish. It is not common that such a majority is bearish and historically it is not a good time to be short. However, when this many are bearish AND the market is rising, well then fools like me long to be wrong.

I can't guarantee I will be long tomorrow, so don't take this text to mean I am anything committed. However I still see reasons to be long and I don't see the point of fighting short simply because the market is so wrong (again, the majority of my bullish bent remains the abundance of strong charts out there, while momentum and sentiment play key roles).

Quick notes: I sold out of that rag-long GS >114. I would prefer to attempt to ride this to the 200-day MA, above 117, but GS had risen 54% in just 11 days and so I am risking missing a further rise while I let it cool a bit; looking for a new entry if/when it sets up.
I also added TWM earlier as a partial hedge. The Russell 2k is the weakest major index on the session, hence I am using that one for protection. If things keep firm, I will let go some or all the the hedge - if things deteriorate, I will scale back on the longs instead.

Total Position: currently 2.86-to-1 net long, (79% invested)

Currently Long (according to size): RJI, ARST, PMCS, WNR, MYGN, IOC, SNDA, STAR, MNRO, UGP

Currently Short (according to size): TWM-long (Russell-2k Dbl-short), AXA, ELOS
(Note: inverse-ETF TWM represents being dbl-short Russell-2000)

Monday, March 23, 2009

Bear Platter

Like so many evenings in recent times, one side of the boat is singing and the other now swooning.

Bears were crushed today.

Holders of 2x's and 3x's (short) inverse-ETF's, many of whom I know were adding to losing positions throughout the session, were chewed beyond recognition. FAZ finished down, a mere 45%.

Don't say Quint didn't warn you.

But I don't like speeches - and I know what being bit in half feels like, so I'll shut-it and speak a bit on the big picture.

Volatility remains fantastic at this point. And trust me that will not be true forever. Get it while you can, traders. Because when the volatility subsides (which should occur well before any new, secular bull market), we're going to enter the dreaded apathy period. That is the period whereby the market is neither gaining nor losing significantly, over time, and the investing world is slowly lulled into a sense of boredom and despair. Neither bulls nor bears are earning any chum and it feels like that is the case forever. Good luck beating the super-computers during that ice age tough guy - they stand to make a few percent.

But for now this market can cut (in half!) both directions. As a mere human I'll take it.

And today? Oh, well, the market is rallying - some wicked, counter-punch retracement just powerful enough to deep-fry the bears, give rise to hope for the bulls and ultimately set-up shop for cleaning gills on both sides.

Why should we expect anything else?

My position is behaving well and I am going to hang on to the longs that continue to work; as long as that is the case. That said I may play around with quick hedges tomorrow, depending on the action.

Check-in with the Twitt-spit if you care to follow along.

Total Position: currently 5.13-to-1 net long, (74% invested)

Currently Long (according to size): RJI, GS, ARST, PMCS, WNR, MYGN, IOC, SNDA, STAR, MNRO, UGP

Currently Short (according to size): AXA, ELOS

Whale Tails and Market Tells

I'll quickly discuss the Treasury's flush-and-gush plan to attack the banking sector's bad assets (whereby the Government intends to spend up to another $T).

This follows the Fed's plan to spend more than a $T buying mortgages and selling themselves their own product of treasury bonds; the quantitative easing thrush-crush for shorts, announced last Wednesday.

Let's reduce this to the simplest form. If I was smarter than the market, then I would be adding shorts right now. The Government is taking very large steps (they're gambling) and basically the severity of these actions illustrate just how desperate they are (or how dire the situation is).

Fortunately, I don't like to think. I react. For all I know the Government will succeed and I'm an idiot.

Either way, when whales start splashing vehemently I don't like to be on the wrong side of the wake. Market internals remain extremely positive for today, to a large enough degree it suggests we'll see higher-highs in the final 90 minutes of the session and likely close at or near the highs.

If we do manage to reverse on this news, which I truly doubt based on the tape thus far, I would not want to be long.

Of all the major Financial names out there, GS is the only one I see above last week's high so far. That is the Financial play I am content to play long here.

If the complexion of the day changes to any signifcant degree, I will post again later. Otherwise you can follow my new trades on the Twittfeed; I expect to do some long-side day-trading in the final 90 minutes if internals remain extreme.

Total Position: currently 5.19-to-1 net long, (72% invested)

Currently Long (according to size): RJI, GS, ARST, PMCS, WNR, MYGN, SNDA, STAR, MNRO, UGP, IOC

Currently Short (according to size): AXA, ELOS