Friday, January 29, 2010

Bounce Trounce

No time again for posting, which has become routine.

If you're hanging on my words you're screwed anyway; sooner or later.

Seems like nothing but good news this week, capped off with the (much anticipated!) better-than-expected GDP report today.

Eyes have been glued on a bounce and the tape seems to have another direction in mind. I'd love to see how we handle negative news.

I've gotten market neutral from time-to-time this week, but vigilantly more interested to short strength rather than position for for any bounce (I've so far refused to get net-long for more than a few minutes). As long as the sell-waves outpace the bounces, I see no reason to focus more on upside; selling strength remains the operative.

Sure, counter-bounces can be sharp in a down market, but the larger move trumps the smaller jabs and traders are almost always best served to focus more on the larger energy.

Total Position: ~2.25-to-1 net-short, 55% invested

Currently Long (according to size): NYT (6.4%); TIE (5.1%); MMR (4.2%); CISG (2.5%)

Currently Short
: AAPL (9%); JPM (8.5%); GWR (7%); TWM-long (Russell 2k Dbl-short, 7%); MS (5.4%);

Futures Accounts: no current position

Twittspitt for details

Wednesday, January 27, 2010

Tuesday, January 26, 2010

Quicknote (updated position+ESpost)

I posted a graphic look at a few of the sickening (verb) Money Center Banks at ES here.

Total Position: ~2.3-to-1 net-short, 65% invested

Currently Long (according to size): HUM (5.8%); ATHR (5.7%); HITK (5%); ULTA (4.3%)

Currently Short
: JPM (11.3%); GOOG (7.9%); PNC (7%); TWM-long (Russell 2k Dbl-short, 6.9%); MS (5.5%); CAT (5.2%)

Futures Accounts: no current position (in and out of Mar NDX future short today)

See the Twittspitt for details

Monday, January 25, 2010

Momentarily Net-long (but eye still on the prize)

Staring at an emptying, once-full house of glass playing cards, I've shifted to net-long, but only for a brief moment.

The reasons are two-fold: First, there is no blood (as of yet) on the Street today, following the 3-day thrashwhack last week. And second, getting a little long affords me the ability to re-hammer aggressively short from here.

The latter is especially important, since my first priority now is to participate in the downside. Corrections have a way of getting folks focused on bounces, even though the waves lower have much better energy. Getting a little long, momentarily, gives me my personal psychological edge to continue pressing sell buttons sooner rather than later; instead of looking at "safer" or more comfortable, "logical" places to enter short.

We're in a correction - I'm not in any internal debate about that. And interestingly, on the bear-only blogs today (like Friday, Thursday, etc.), I see more discussion about where we will bounce, or where one might re-short, as opposed to folks being short now.

Selling strength is my operative still (covering emotional sell-offs the other mantra). There are technical and fundamental reasons for the market to work much lower still; I'm not going to get overly clever in how we get there. Corrections have a way of punishing early, and it's still early.

-Current Longs include: SWN (from today), HUM (from today) and TIE (from Friday)
-Current Shorts include: TWM-long, JPM
-30.5% total invested

Twittspitt for details

Adding short from here, I'm expecting to key on financials still, and re-increasing TWM (the Russell2k holds quite a few smaller financial names, fyi). Beyond that, I am hunting for industry groups (other than the financials) slipping the furthest in terms of relative strength; stay tuned.

Friday, January 22, 2010

As Goes January 1984...

Posted further today at ES here.

Keeping Track (still pushing short)

Nobody needs me to come in and say something snide just now, especially me.

I'll just post the pretty pictures instead ;)

Selling strength remains my operative here; covering or hedging by adding long, on emotional weakness is the other side of that coin.

I don't like the idea of covering everything short, in anticipation or expectation of a market bounce, since I don't want to price myself out of what is the best opportunity if we only drive lower here.

The trend has changed and that is enough news for me not to question things.

As far as me being quiet lately, it's partly due to a busy week (outside of the market; traveling and otherwise), but also because sometimes it is better to flow with the flow than to stop and try to define everything. I have to be careful not to let my pen get in the way of making money.

No one really gives a shit over what I may think (about politics and new uncertainties) anyway - especially me!

That said, I will say one thing about the Monday session to come:

Monday may be a rally day for the market (as the first trading day of the week has significantly out-performed since the March lows; by a huge degree). But will things change now that the trend has shifted?

Further, if Monday strength does end this time around, it's not impossible then the change will be severe, no? I'm sure a lot of pros are counting on strength Monday - they may get very panicky if it is negative instead.

I'm long TIE only at the moment (added this morning). It's pointless to define my full position just now, since it is shifting continuously lately. I'm leaning on the Financials mostly at the moment for shorts, since that is where the blood is.

I'll keep things up on the Spitter, so as usual see the Twittspitt for details.

Be safe and good weekend.

Wednesday, January 20, 2010

Quicknote (and dirty)

Personally, I don't like this market - you can buy-the-dip here without me.

I did cover futures and options shorts (and my ASIA Info short) on the thrash-whack lower, but a lot of that is because I am traveling the second half of the session.

On the day, volume is running the biggest pace in 2 months and breadth is severe-negative. I'm still fully short, levered TWM and SSG, but only 14.5% invested now.

Twittspitt for details

Tuesday, January 19, 2010

Quicknote (light throttle short)

I didn't say we'd go straight down ;)

I'm pressed for time and keeping this brief, but as usual posting all trades live via Twittspitt. I'll be travelling the last 3rd of tomorrow's session and aside from Twitter be out of reach most of Thursday as well.

Re the market, I'm lightly positioned but still fully short. If I get squeezed out I'll move to the side for the time being; shake things off and then re-attack

...or else reassess.

Wednesday, January 13, 2010

Quicknote on Position

Briefly - the general market caught a bid again today, but leadership remains weak; especially on a relative basis.

In particular, Chinese growth names listed in the US are behaving poorly (especially notable considering today's re-weakening Dollar). I've been blowing out of these (all week...I'm down to only CISG and MR now), but I've replaced them with larger positions of more cyclical US names (SWN and NEU); for the time being.

I'm looking to keep more or less market-neutral until we improve more clearly - or I'll position more short once we begin to trend on the downside. The latter is more likely, I suspect, but I won't be short in the month of January without downtrend; regardless of my smiley-faced suspicions.

Total Position: roughly market-neutral; 48% invested; pure longs = 28%

Currently Long (according to size): SWN (reloaded today, 8.5%); NEU (reloaded today, 6.8%); CML (5.2%); CISG (4.1%); MR (3.3%)

Currently Short (all added on Tuesday): TWM-long (Russell 2k Dbl-short, 11%); INTC (5.5%); SSG-long (Semiconductor Dbl-short, 3.5%)

Futures Accounts: Short 20% Mar NDX (from 1875.125 ave); Short 10% Mar R2k (from 638.80); (covered 20% short Mar BR Pound last night, 1.6172)

See the Twittspitt for details

Tuesday, January 12, 2010

Unseasonably Cold Action (+ updated position)

[Re-posted tonight from ES - scroll to bottom for updated position]

I'd like nothing more than to continue my fair-weather track of no particular agenda, favoring neither direction for the markets, and keep adding nothing brilliant to these pages.

I guess I'm about to screw myself instead.

Not that I'm cemented in any conclusions - I remain an idiot, thankfully (out of necessity if not for just being an idiot). But negatives are swirling now among us, monkey-wrenching the prospects for further rally. And further potential catalysts are due later in the week.

Yes, we did close off the lows in Tuesday's drubbing, but nothing about the action was overly positive. And for the first time in a long time, internals were resolutely one-sided + negative.

Here is a brief bullet-list of present negatives...

-Tuesday was the strongest trading volume of the year and all the indices declined (clear institutional distribution)
-The Dow was off only 0.34%, but the Nasdaq, NDX and Russell 2000 declined 1.3% each (and the SP500 0.94%). In other words, leadership was leading lower while selling in the headline-grabbing Dow was modest; making things appear less negative than reality.
-Market breadth this early into the year is rarely very negative and Tuesday showed greater than 2.5 times more declining stocks vs. positive; a seasonal anomaly and a clear negative.
-A flurry of new proposals to tax bank profits and executive bonuses creates a new (difficult to measure) negative for financial stocks in the short-term.
-Volatility rose Tuesday, closing above Friday's close and reversing Monday's accelerated downtrend (the dramatic pivot in the VIX constitutes a reversal-signal for Volatility; which implies further downside likely ahead.
-While bullish sentiment has not reached extreme highs, it remains on the high side; bearish sentiment, meanwhile, remains extremely low (negative).

Further, Intel (INTC), which reports Thursday after the close, is pricing in a 7% trading range now for following that report (up from 5.5% on Monday). In other words, the expected trading range between the high and low, following the news, is up to 7%; a big number for bellwether Intel.

Friday then has 3 potential catalyst for volatility - 1.) it's option expiration; 2.) it's the first trading day following Intel's report from late Thursday; and 3.) financial bellwether JP Morgan (JPM) reports before the open; just in case everything else is a yawn.

The NDX is now flat on the year and the Nasdaq is higher by 0.58% only. These indices are the definition of churning lately (little or no progress as volume rises). Remember, it is only a couple weeks into the trading year and seasonals are favorable. Leading indices however are distributive and churning, volatility is flashing succinct sign of life and a market's first-leg down following a major-bear's strong bounce higher is (historically) not pretty (retracement moves lower following the bounce of a major bear, which this market has yet to witness, have tended to run higher than standard 10% corrections. The data sample on this is small, as there have not been enough major bear markets, but 10% would equal the smallest first-leg down and 39% the highest).

I'm not sure that current sentiment has priced this possibility in, if you get my icy drift.

Further further, what happens when a market churns in the beginning of a new year, following a decent run-up? Again, there are not so many examples, but they tend to lead to corrections, or sometimes worse.

Take the daily-view (below) of the Dow from March, 1983 to September, 1984 and pay special attention to the churn at the beginning of 1984 (it behaved enough like the Nasdaq has so far this year to at least be wary; both examples are clear cases of churning...running up strong out of the gate and then going nowhere for several sessions, before turning down).

All of this is not to say the toast cannot fall butter-side up for this market (it's a brave new world after all!) and subsequently I'm not ringing alarm bells, calling for dramatic downside. For that reason I won't refer back to this post if the market gets ripped in the coming weeks.

...though I would like to give myself a genuine hard time however, should we rally straight-up from here instead ;)

*Click and expand to view clearly; thanks to ultra for drawing this one up.

Total Position: ~1.1-to-1 net-short, 46% invested
(I reloaded some longs and initiated shorts today; market-neutral bent so far).

Currently Long (according to size): CML (5.2%); CISG (4.2%); WATG (3.7%); HEAT (reloaded today, 3.4%); MR (added today, 3.4%); VIT (reloaded today, 3.3%); CAAS (reloaded today, 3.3%)

Currently Short (all added on Tuesday): TWM-long (Russell 2k Dbl-short, 11%); INTC (5.5%); SSG-long (Semiconductor Dbl-short, 3.5%)

Futures Accounts: 20% short Mar BR Pound (from 1.6163); 10% short Mar R2k (from 638.80)

See the Twittspitt for details

Monday, January 11, 2010

Swing Bling (quick exit for now)

I don't have anything brilliant to share, so I'll keep things brief.

It may or may not be late in the game for this rally (brilliant!). And while I'm not going to fight the larger trend (certainly not in a January month), for the time being I'm not looking to invest in it either.

I'll keep a swing-trade approach for now.

Today's open then turned out to be a perfect exit-point for taking profits. And while I was selling with both hands at the open, I wish I had been selling with both feet as well. Regardless, I've lightened dramatically and I can do almost anything from here; as things develop.

...Or I can take time-out to drive to Mavericks and watch the market from my phone instead. Maverick's may see 40'+ waves by Wednesday; which seems more exciting than near-term prospects for trading; at least at the moment.

Total Position: 100% net-long, 16% invested (down from 57% at Friday's close)
Currently Long (according to size): CML (5.3%); CISG (4.3%); WATG; (3.8%); VIT (2.8%)
*See the Twittspitt for details on today's exit-sells

Currently Short: no current position
Futures Accounts: No current position

Mavericks photo by Frank Quirarte©; January 10, 2010

Friday, January 08, 2010

Tie Me to the Mast (sell it on Monday)

Repost from ES...

It's been a decent week for me, and like any red-blooded trader I'm absolutely dying to book profits. Take meat off the table, protect the gains and party over the weekend like it's 1999.

Can't do it. Tie me to the mast. At least until Monday...

Yes, had we not had disappointing jobs data, which kept this rally briefly checked (I'd have sold into a bang-up open had it gone the other way), it would be different. Instead the indices are stable-boring, while underneath the surface growth is quietly driving higher. Growth stocks are leading again (not unusual in January), as they have all week; the Chinese names listed in the US especially.

And then there's Monday...

The biggest rally days since the March bottom have occurred on Mondays. Nine out of the last ten Monday's have been up-days (that I have confirmed) and I am looking at un-confirmed data that 16 out of the previous 18 Monday's were winners.

It gets wilder. I don't have time to confirm all of the following (blame TransworldDepravity if any of it turns out to be inaccurate ;), but here it is anyway...

Since the March 9th, the Dow has had 30 "up" Mondays (or Tuesdays after a Monday holiday) out of a possible 43. That's equal to 70 percent. And 16 of the past 18 Mondays being "up" (I just mentioned) equals 89 percent. Then incredibly, 80 percent of all the point-gains since March 9th came on those 30 Monday up-days.

Read that last line again. It's truly amazing; the stuff conspiracy theories thrive upon;
It must be wrong; I better go check this out and report back :)

Add this to Mole's point yesterday about the ISEE and I'm going to speculate the obvious:

Monday we'll see a strong tape, we'll see the ISEE hit a 240 trigger and Stupid Lucky here will bank sick profits and call it a day. The fact that the growth is surging today and the majors are quiet is a big factor, on top of the Monday data, since this is the type of tape I'm used to seeing a day ahead of a big, capping rally.

Monday then I can exit most of this (hedge-off the remainder only after the market begins downward) and begin to relax; focus again on Maverick's, which may see 30' surf by mid-week (Jaws in Hawaii might see 40'+ by Monday; this, according to buoy data which is starting to make waves).

Don't think I'm not going to mention that. If you like your swells big, well, big swells are looming.

I'm shopping for helmet cams as we speak (tough to do when sitting on one's hands) and planning to emulate Niagara Falls over a barrel; jamming my jetski right into the bowl by Big Wednesday next week.

Good wkend - beast out!

Updated Position (looking to lighten now Monday)

Total Position: 100% net-long, 57% invested
Currently Long (according to size): CYD (7.5%); SWN (6.1%); VIT (6%), HMIN (5.6%); RINO (5.5%); CML (5.3%); HEAT (4.6%); CAAS (4.5%); CISG (4.5%); WATG (3.8%)
Currently Short: no current position
Futures Accounts: No current position (see the Twittspitt for details)

Thursday, January 07, 2010

A Short Speech About Opportunity Costs

Re-post from Evil Speculator...

I’m not as fast as I used to be and I miss a lot of opps to book good, quick profits and then fire-back again on the first entry; grinding grinding grinding each day to another 200% year.

But I don’t blow-up every couple of years anymore either.

Michael Davey here…

So there you go - age will slow you down, gumption wanes and aversion to risk grows. And if you don’t exercise the soul you’re as good as walking-dead by age 30 (not joking). At the same time though, you learn something which might be valuable; should you insist on paying attention.

One of the things I’ve learned is - the market is bigger than me, it doesn’t care about me and therefore if I want to make money (and never blow-up), then I don’t care about me. I don’t give a rat’s ass what I think.

Even though I’m analyzing all the time, I don’t give it much credit if it flies in the face of what is happening on the tape. There is an art to this, and there is a burn when things churn, but in general I believe it is best to discount conviction and over-weight an actual trend.

If I don’t agree with the market, I can go on vacation.
Or else I can agree with the market.

This is not a blow-my-own-horn brag-post. This is a response to seeing mistakes of my past flowing through the comments of this and other sites. Guys who have been short for a lengthy period are fighting fighting fighting and all the while their conviction and energy is waning waning waning. When the market turns down, even though I’m such a withered snail, I will get short and I will believe in my position.

I won’t be exhausted and I won’t need to take a quick profit just to prove those still exist.

I’m not telling you guys to get long here. There are a lot of sloppy signs right now and you are pointing out more and more every day (and then more and more the next day ;). But learn how to surf my friends. Wait for the chop to pass before paddling out; especially in the bigger swells. Don’t blow-up!

That’s it. I’m going back to buying stupid stocks now which are still rising. If it weren’t January I’d be on vacation instead, like you wish you had been (I know because I’ve been there - I have a right to give us both a hard time; I don’t take it personally; hope you don’t either).

Now this from Walmart…

Wednesday, January 06, 2010

Money FlowMo (Energy-Other)

I've posted more on money flows, this time highlighting the Energy-Other group, just now on ES HERE.

I'm still adding names today, though this might be about the maximum. If I add from here, it will likely be coincident with reducing elsewhere. Smaller growth names, especially Chinese, continue to out-perform; so I continue to work them.

Total Position: 100% net-long, 60% invested
Currently Long (according to size): UWM (R2k Dbl-long, 10%); GTI (6.3%), VIT (6.1%), HMIN (5.5%); CYD (5.4%), CML (5.4%); CISG (4.2%), HEAT (4.6%), RINO (4.2%), WATG (4%), ULTA (2.3%)
Currently Short: no current position
Futures Accounts: No current position (see the Twittspitt for details)

Tuesday, January 05, 2010

Money FlowMo (Steel Specialty Alloys)

New post re Steel-Specialty Alloys and GTI specifically posted just now to Evil Speculator HERE.

In other terms, I am quite unhappy to have shaken myself out of HRBN long; will look to re-enter assuming this holds above the 22.90 pivot-point for break-out. My not being perfect has become more obvious lately (though the week is going well-enough overall)

Total Position: 100% net-long, 47% invested
Currently Long (according to size): UWM (R2k Dbl-long, 10%); GTI (6.5%), HMIN (5.5%); CYD (5.3%), CML (5.3%); CISG (4.2%), RINO (4%), WATG (3.8%), ULTA (2.3%)
Currently Short: no current position
Futures Accounts: No current position (see the Twittspitt for details)

Monday, January 04, 2010

Flame Throwing Shovel Worship (early 2010 positioning)

Don't do what I do, but I've outlined my early-year logic - on Evil Speculator HERE.

Total Position: 100% net-long, 30% invested
Currently Long (according to size): UWM (R2k Dbl-long, 10%); HMIN (5.5%); CML (5.3%); CISG (4.1%), HRBN (3.1%), ULTA (2.3%)
Currently Short: no current position
Futures Accounts: No current position (see the Twittspitt for details)