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

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