Friday, June 04, 2010

Butterfly Punch?

Interesting session today.

First, let's get this out of the way - the chorus of shouts to sell this jobs report can claim big smarts as the day turned out to be a rout. That's great for them, but somehow no disaster (yet!) for me as well. Fine, because given the incredible action in leadership this week I am only too willing to lose money today in order to go with the market instead of the LOGIC. Seeing my head still on my shoulders, I know I stood to make much more than I was risking; a bet I'll wager every time when everyone (and their Fast Money mother) was warning what I'd get hit with.


Anyhow, in the heat of the rout, leadership still shows amazing resilience. If you don't notice it, because the negatives are so compelling - that's totally your prerogative. I won't argue. Get defensive because of the risk. Get UNDER-INVESTED in fact.

Get in the corner and wait wait wait so I can eat your lunch with what's left this quarter. Sooner or later one of us will run to the other side. I wish you well.

Anyway, realistically, I try to react and adjust, but as of yet I cannot turn negative here. There are just too many great charts right now (more today than last Friday) and the overall market is not at lower-lows. We should be acting more like the Euro for one, I should be able to pick up a NFLX under 90 secondly and we should see a few more than 50! new 52-wk lows mid-day in a rout.

If you want me in your corner.

The Euro is at a lower-low, Hungary CDS prices blew up, France is in the cross-hairs now and Spain remains the next untied shoe to drop. Plenty for bears to buzz about.

How do I deal with it all? Well, I'm eating freshly born Lassy pups just now, while determining whether and where to further hedge (certainly happy about having accumulated yesterday's EPV) and when and where to add leadership. I don't want to add retail before the close (LULU looks lovely), since that group is affected by payrolls and are universally smacked today. Semi's are also universally down, so I'll leave that alone. Financials are universally lower, except for GS, which is interesting. Energy, however, is closer to mixed today and increasing weight there at mid-day is not necessarily out of the question.

One should note the resilience now of crude oil, relative to the Euro. Oil cannot so far manage even a 2-day low, while the Euro plays sandbox with 1.20.

And then there is the Cloudbox sector of CRM and VMW + AKAM, NTAP and a couple of others. What do I need to say about this group? They're puffy and lofty - no wonder they only go up!

Yeah yeah, I gotta go. Fast Money geniuses are coming on now - hopefully to warn me further. I won't predict, but I won't be comfortable if they suddenly start spreeching about this as a buying opp.

Until then I see no reason to get too emotional. The kitchen sink has been thrown at my head now and I have taken but a scratch (the day is young still). Yet, I've been as long recently as I've been since last spring; somehow accounts remain up big this week.

That may change. The CRM's might get clouded late this session as a universal margin call implodes anything with a bid.

Fine - Prove it and I'll believe it!

[No time to update positions, but still >3-1 net-long, down from 5.7-1 last night and 20-1 the previous night. Picked-up some DXD for hedge after the jobs report fell-swooped; Removed JPM long; reloaded OIL long and reloaded an additional trading tranche of CRM]

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