Friday, April 30, 2010

Night Gallery (sunday drive)

Shotgun captures from last weekend while CD senior tested 4 cars (including the McClaren in the rear window). I got a speeding ticket driving up there and no tickets later driving a 620 hp Ferrari and this beast at the bottom. Go figure.

Thursday, April 29, 2010

If P... (or two small plans for near-term)

Financials closed a little weak today (Thursday), while the broad market finished impressively.

The rest of the day was consistent - both sides strong.

Tonight there was a new/not so new WSJ article regarding GS, generating some selling amongst money-center banks.

If financials gap lower Friday, it's difficult to say yet whether they'll rebound or sell further from there (the latter is possible, yes). But I think it's safe to say non-financial leaders (some of whom were up only modestly today and could see catch-up bidding/rotation tomorrow in the event financials are bouncing from opening levels, or at least stable.

I've already let go most of my smaller-cap leaders (especially those with Eastern zip-codes) and I'm net-short big financials (MF-long vs. the money-center world short). I can more or less stand pat if financials quell re-freshened animal spirits, or I can trade-long non-financial growth names referred above; either lightening then on financial shorts, or just waiting a little further for the positive development in Greece to take shape (Greece would see news of some agreement prior to Monday we should expect - if we're not leading lower already I'd like something more to sell into that news).

^^GS After-hours Thursday^^

Wednesday, April 28, 2010

Thoughts Outloud (and updated position)

I think we need to see a firm market in the second half of today's session. Otherwise a little known item known as a correction is under way and in control.

I will not be doing a lot of buying on pullbacks, not if the trend is lower. The reason is, this market has been impossible to get into unless you paid-up uncomfortably and far far too many participants think that buying a pullback is attractive here (now that there are signs of recovery in so many places).

When a market will not let you in - you should buy it. When a market which will not let you in finally gives you a chance to pick up things at now-comfortable levels - you probably should not buy that.

I don't like how we are reacting to no-surprise news in Europe this week. Cash is being raised and bellwether's like AAPL will dictate the temperature of that metric. Note the high volume of AAPL today, and the fact that this was the first big leader to give it up this session. If AAPL closes nearer to day-lows, down on the session on strong and rising volume, then the 10-day (trading) average will likely be broken next and the idea of buying the market's pullback becomes far more risky than it has been.

The VIX measure of volatility rallying 32% in a day and sticking is also a concern. The last spike of that nature in January saw another 10 days or so of downside. This time around though, it is almost May on the calendar, sentiment is far far more positive (meaning far more players are already in), the Euro has penetrated the important 132-level and on and on....

Give me higher prices again and I'm a buyer. Give me bargains right now and I will scoff.

Total Position: Currently ~1.17-to-1 net-short; 60% invested; Note: accounts shift to 1.6-to-1 net-short when GS trade it closed, assuming no other changes.

Currently Long (according to size): GS (trade from yesterday - looking to sell by tomorrow, 8.3%); MF (7.9%); EWJ (new today, 6%); CHS (4.7%); AVGO (3.4%); CISG (3.2%)

Currently Short: JPM (9.2%); FCX (6.1%); SKF-long (Financial Index Dbl-short, 5.8%)

Futures: no current position

Twittspit for details

Saturday, April 24, 2010

It's a Wrap (treading long for now)

This would be the perfect weekend for lengthy analysis, but since I remain more interested lately in what I do and less what I say, I'm going to dumb it down to a simple email response to a fellow trader.

...Thursday's reversal made an impression (impressive since it looked like we were making lower-highs [from prior to the Goldman break-down], and adding a significant distribution day - but leadership held and the market reversed instead; then took out the highs on Friday).

Curious as to your thoughts - I'm not counting out that we just accelerate now and get silly. If that is the case the buy-the-pullback folks will not be happy.

...especially once they start buying the pullbacks ;)

Edit - re-response: Not wanting to glue onto any scenario. Could be we accelerate now, no chance for those waiting on a pullback to get in...until they should not be getting in.

That's enough mouth from me (commentary comes so easily lately!). I'm flying up to Bellingham now to ride shotgun tomorrow on a supercar driving tour (a 70th birthday gift we put together for CD-Sr...since he's subscribed to Road and Track for maybe 60 of those years and has yet to step-on a Lambo).

Get Outside!

Total Position: Currently ~2.4-to-1 net-long; 42% invested

Currently Long (according to size): MF (6.2%); CAAS (5.5%); CHS (5%); CISG (4.4%); ULTA (4.1%); AVGO (3.4%); WATG (3.3%)

Currently Short: SKF-long (Financial Index Dbl-short, 5.4%); FCX (5.1%)

Futures: Active week - no current position

Twittspit for details

Tuesday, April 20, 2010

This is That Bounce

That was an exciting title - now for the boring details...

Last week's high-volume slice lower was born out of new, higher-highs in the market. Generally you can count on that scenario getting bot, even if the market is within a larger topping process.

It is on the ensuing bounce one can determine the amount of power, or distribution, etc.

Financials are showing distribution on the bounce, while technology and energy have lacked much volume, but are exhibiting reasonable power.

AAPL, however is a little sluggish and that one reports tonight. Tomorrow may see a little drama on the heels of AAPL eps.

If I were supposed to predict, I would guess there is not much upside in stocks for the short-term, but we're still one high-volume distribution day from suggesting significant downside is now imminent.

Grinding like my teeth at night might be more likely for the time being.

I re-shifted to net-long again yesterday, though nothing dramatic, and I'm looking to short another financial late today or early tomorrow in order to flatten-out exposure. MS reports in the morning (remains my largest short) and I will hold pat there for that news. DB is impossible to borrow at the moment and options are too expensive and too ill-liquid - otherwise I would be looking to attack DB on the bounce today.

I may just go ahead and short GS instead. Even if GS avoids any major legal defeats, there is enough damage and enough uncertainty going forward (regulation in particular, which means investors cannot judge the new rules of the game for Goldman, and neighbors like DB, MS, etc).

I'm looking to lighten longs again into this strength. Whether or not I buy them back again afterward depends on whether or not the action remains formidable.

Easy enough.

Total Position: Currently ~1.2-to-1 net-long; 70% invested

Currently Long (according to size): MF (6.2%); CISG (5.6%); SBUX (5.4%); CHS (5%); NTGR (3.8%); DGIT (3.8%); ULTA (3.6%); CAAS (3.5%); WATG (3.2%); AVGO (3%)

Currently Short: MS (8%); TWM-long (Russell 2k Dbl-short, 5.8%); EPV-long (European Index Dbl-short, 5.4%); DST (4.5%); SKF-long (Financial Index Dbl-short, 3.7%)

Futures: 10% short Jun R2k future short (reloaded today and active there lately), from 717.20; relevant accounts

Twitter page for details

Friday, April 16, 2010

Updated Position (smaller and slightly net-short)

Covered plenty short today, a little late or else too early, depending on your outlook. Anyway, I was trimming longs aggressively this week, so cutting shorts today has been a gentle, back-handed way to finally reduce size, keep a little net-short and watch how the market develops from here.

Such drama.

Total Position: Currently ~1.3-to-1 net-short; 55% invested

Currently Long (according to size): MF (6.1%); SBUX (5.3%); CISG (5.3%); DGIT (3.8%); ULTA (3.7%); AVGO (2.9%)

Currently Short: MS (7.8%); TWM-long (Russell 2k Dbl-short, 5.9%); EPV-long (European Index Dbl-short, 5.5%); DST (4.5%); SKF-long (Financial Index Dbl-short, 3.8%)

Twitter page for details

Monday, April 12, 2010

Updated Position (shocking neutral still)

I'm still mum, though doing reasonably well and remain market-neutral; hovering between slightly net-short or long for as net-long as I can remember.

Sentiment has become a real concern, but as markets only rise and this is an OPEX week, there should be nothing but upside for the market ;)

Total Position
: Currently ~1.15-to-1 net-long; 86% invested

Currently Long (according to size): DGIT (6.3%); MF (6.8%); ULTA (5.7%); TM (5.4%); BEAV (5.2%); SBUX (5.2%); AVGO (4.6%); CISG (3.8%); CHBT (3.6%); HTHT (3.4%)
Currently Short: TWM-long (Russell 2k Dbl-short, 8.6%); MS (8.2%); DB (6.3%); JPM (5.6%); EPV-long (European Index Dbl-short, 5.3%); DST (4.5%)

Pairs: Covered the F short for now but still holding TM-long. Will either re-short F or unload the TM at some point soon

Futures Accounts: Short 20% NDX Jun, 1988.875 ave. entry
Options: .24% MS put options for Jul, entry 1.84/contract

Twitter page for details

Monday, April 05, 2010

Updated Position (and a whisper kiss from trish)

I'm back on the mainland, rested, and ready to roll.

Too bad there's not much to punch as far as the market.

Rates are rising, the VIX is stable in the face of a lack-luster move to (mostly) higher-highs, optimism is becoming plumb and dumb, volume is light on the advance, financials are lagging, bears are dead, quiet and buried, the Street is in love with laggards now, Oil I'm told is going to lay-up to $100/barrel - I could go on.

Oh, the positive underlying metric of a not-yet improving economy is now waning. I wouldn't expect good economic news from here to help stocks drive higher. Markets have a remarkable tendency to stop rallying when writing on the headline walls report evidence an improving Main st.

Younger days, I would be getting short here. Instead I'm doing my best keeping neutral and waiting for some scent of blood before attacking. And frankly, I don't know that this is going to get so exciting either. I suspect what we have is a market without terrific upside, which will get bought on any strong slice lower, but will quite likely (imo anyway) slowly erode into the drag-out, apathy-period whereby nobody is gaining any great satisfaction, but that prices find themselves lower over time.

Good luck with that environment.

I don't care about 100's, 11,000's, 1220's or any numbers flavoring the headspeak right now. I see a lull action with too many pitfalls to get long and too few technicals to get short. Change one of those and I'm ready to rock!

Oh, Trish's octaves on CNBC rose to trigger-levels for the first time since her return today. I don't want to get into this right now (no time mostly), but for now I want to at least mention it. Mark this day down if you're following Trish.

Total Position: Currently ~1.22-to-1 net-short; 68% invested

Currently Long (according to size): MF (5.9%); TM (5.6%); ULTA (5.3%); BEAV (5.2%); AVGO (4.6%); CISG (3.7%); (HTHT was sold today; will look to reload at first reasonable entry)

Currently Short: TWM-long (Russell 2k Dbl-short, 8.9%); DB (6.3%); EPV-long (European Index Dbl-short, 5.4%); FWLT (4.7%); DST (4.5%); MS (4.3%)

Pairs: Covered the F short for now but still holding TM-long. Will either re-short F or unload the TM at some point soon

Futures Accounts: Short 10% NDX Jun Mini, from 1953.50

Twitter page for details