Saturday, September 18, 2010

Lawn Ball Cahunas

While there are many more proponents speculating we'll see an upside break-out in equity trading ranges now, underlying technicals are improving, leadership stocks continue to behave very well (still!), while increasing in numbers and sentiment remains a Dostoevsky read or two from becoming anything terribly negative. Add to that, next year remains the 3rd year in the Presidential cycle.

I guess I'm not ready to retire just yet.

Fine fine, very well. And I don't want to paint scenarios. But a breakout above 1131 now (we kissed that level early Friday) would set the table all too typically for the Fast Money universe to spit out chicken bones, change their collective tunes and nod for further upside.

Sick Jesus - that day is one to pare-back core holdings and re-hedge aggressively; even if only for the near-term.

This is not to say we cannot break-out here and shoot the moon into 2011, if not the quarter-end in a couple of weeks - which is why it is best never to preach anything. But a blind squirrel who finds a nut still can't see the tracks and that is a squirrel worth paying attention to. I know I'm being an ass (underneath it all I love the lot of you), but I have to face it. I can only measure strength in a few ways and position myself accordingly. In terms of reading fortunes though - it is the losers who are best at predicting (albeit inversely). Be sure to tune into the financial media as we break-out to the upside. If the collective chime is "we're going higher!," and that chorus is led by anti-genius types marching to their new, upward beat (since somehow, suddenly, they can't take being on the wrong side - not for another minute!) - well then I'll be banging the sell button on that day; waiting for the end of the session if internals are severe-positive, or banging away throughout otherwise; since any 5-minute bar might mark the short-term high.


Sure sure sure, the market will remain overall positive and selling everything will not get my vote. I'm not turning bearish here, not by a long-shot. But hedging for freeway congestion on the back of these ducks makes perfect sense to me. Pull-up on the accelerator some and wait for the lane to open-up again. Slow to the actual speed limit (market neutral) if the radar detector begins flashing. If the market continues onward without a check, well then step it back up; accelerate again gradually while considering whether or not (or when!) to punch it. Or, in the event we get a sharp slice down before any break-out, I'll buy that set-up with both hands, as I expect it is the bears last hopeful gasp (the last time those pencils get sharpened and they project the potential downside) before they finally get stopped at higher levels. Or...

So boring. I can't wait for lawn bowling.

Total Position: Currently 2.1-to-1 net-long, 101% invested

Currently Long (according to size): EWS-Singapore (7.6%); CAT (7.3%);
ULTA (7.1%); OIL (7%); EWZ-Brazil (6%); IGTE (6%); NTGR (5.5%); CXO (5.3%); TRW (4.6%); CRM (looking to overweight again soon, 4.2%); RJI (4.2%); ARUN (4.1%)

Currently Short: APOL (7.5%); FSLR (7.2%); DISH (7%); CROX (6%); DISH (5.2%); CREE (5%);

Futures: no position

Centrifugal to fade trades in real time

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