Friday, May 28, 2010

Updated Position (+ BP butt-plug strategy)


Still pushing long here, but quite a few adjustments, and I have partially hedged-off the portfolio (so far not aggressively).

Regarding the halving of EWY (S. Korea), this is still an intermediate to long-term objective, but S. Korea is performing worse than Singapore (EWS) since putting these on. I'm looking to increase Singapore then and hopefully will be able to hold remaining Korea as well. I haven't discussed Asia much in recent months, but as it has been, I will continue to put money to work in Asia when the world is for sale. Mainland China is key there, but I am waiting for either out-performance in Shanghai, or else a bigger for sale sign.

Regarding the oil trades (out of OIL and IOC longs today), I am playing these off of BP and the stuffing of a certain hole in the gulf. I'm now on the sidelines, but looking to buy again once bad news develops that golf balls and tires treads are not the BP (butt plug) solution. The long weekend may get in the way of that trade (since news could go negative and return positive before I can trade it), but after re-entering long I'm looking to sell it again short-term once they stop the spew. After the tire-trash is presumed to fail, we should expect to see something like freshly cut (old-forest) redwood trunks stuffed into the thing.

Stopping the spew will not solve this problem, since the problem is oil-well out of hand already, but I assure you there will be short-term relief once the barn door is finally shut.

GG Planet Earth.

As far as the over-all market, I'm not counting on anything (reacting reacting reacting), but we could see the follow-through session Tuesday or so and if so I will be buying again aggressively.

Total Position: Currently 3.37-to-1 net-long; 62% invested

Currently Long (according to size): JPM (6.6%); TGT (6.6%); SBUX (6.3%); AVGO (increased today, 5.4%); EWS-Singapore (5.3%); CRM (5.1%); AKAM (4.3%); EWY-S.Korea (reduced today, 4.2%); CISG (3.4%); ULTA (3.4%)

Currently Short: SDS-long (SP500 Index Dbl-short, 7.6%); APOL (3.5%)
Note: Inverse ETFs currently weighted @1.5 x's (down from 1.65; based on relation to relative beta in long holdings);

Futures: Out 20% Jun SP500, 1099.625 ave.

Twittspit for details

Thursday, May 27, 2010

Updated Position (give me shares)


Total Position: Currently 100% net-long; 63% invested

Currently Long (according to size): EWY-S.Korea (8.3%); JPM (increased today, 6.6%); TGT (6.5%); SBUX (6.2%); IOC (5.4%); EWS-Singapore (5.3%); OIL (5.5%); AKAM (4.2%); AVGO (4.3%); CRM (3.5%); CISG (3.4%); ULTA (reloaded today, 3.2%); ITMN (0.72%)

Currently Short: no current position

Futures: long 20% Jun SP500, from 1068.25 ave.

Twittspit for details

Wednesday, May 26, 2010

June Bloom


I hate scenarios. Primarily because they're a clear net-loser over time (-EV), but also because they inevitably become self-important; something not conducive to beating this particular game of animal spirits.

Still, when you get knocked over the head with something, you may as well keep it in mind; especially if you can remain committed to flexibility (the opposite of stubborn, self-righteous, self-important, typical loser traits, etc.).

Having qualified all of that (zzzzzz), here is the picture I'm going to paint (and run like hell from as soon as I'm proven an idiot). Don't think of it as a prediction and don't expect me to take credit for it next week, regardless of how exactly or not it plays out...

I'm getting a little bullish, though not exactly long-term bullish. I'm getting bullish for June, let's leave it at that. We're a few days away now from a respectable follow-through session (An O'Neil confirmation of a new rally). We'll see some amount of re-test (more than likely, but not absolutely necessary, depending on things like whether or not the Euro remains stable), but today should keep more or less firm to the close. Following whatever re-test, back-and-fill feel at lower, but not new-low levels, the rising-volume rally day coming out of that is where the patient traders who are not interested in shorting - should jump in and buy it up. That day may be as soon as Friday, but more likely would come next week, after the Monday holiday. Lower-lows, unless it is a gap and quick recovery back through such levels, means we're still in the shredder and all of this talk was just wasted space; widows and orphans should run far and fast from such a hostile market environment in that case.

I've lightened hedges considerably, for the time being, but I expect to neutralize again before all of this is through; thus accumulating longs for coming out of this, and then letting go the hedge on the follow-through day, once it succeeds in taking place; adjusting like my hair is on fire should the upshot of this post go terribly wrong; reminding me of why I hate predictions.

Tuesday, May 25, 2010

Bull Butter

In and of itself, today's reversal was impressive. The SP500, which gapped at the open to slightly-below the February low, closed higher in the end; on strong, rising volume.

News may be in the cards for Europe tonight or early tomorrow. I'm not in the prediction business, but action is the Euro today was telegraphing, if not news then a less than end-of-the-Eurozone-world scenario at minimum. Perhaps Trichet is about to hammer rates down towards zero.

Here in the US, I think few participants realize the major indices have not taken out lows from February (I say this because I've seen it mentioned about nill, the fact that we were lower just 3 months ago). So as bad a correction as this has been, is and may perhaps still be - it should be understood that with today's saving grace we have still not managed the lows going back to the previous pullback. Until we manage that much it is just not very dramatic; and not altogether bearish.

I let out some line long today and covered Europe as well (selling the EPV inverse-etf in the end). That sounds standard genius certainly, but I took hearty body shots today as I pushed on shorts, not ready to accept we would indeed reverse (given that breadth held worse than 10-1 negative until about 90 minutes left in the session). I scrambled in the last hour in order to position things accordingly (below).

Since I am in fact in the business of reacting.

Total Position: Currently ~2.33-to-1 net-long; 55% invested

Currently Long (according to size): EWY-S.Korea (7.9%); SBUX (6.0%); EWS-Singapore (5.2%); IOC (new today, 5.3%); OIL (new today, 5.1%); TGT (reloaded today, 4.9%); AKAM (new today, 4.1%); AVGO (reloaded today, 4%); ITMN (0.71%)

Currently Short: SDS-long (SP500 Index Dbl-short, 12.3%); Note: Inverse ETFs currently weighted @1.65 x's

Futures: long 10% Jun Euro future, from 1.233

Twittspit for details

Monday, May 24, 2010

Updated Position (laying long for now)


While volume is light and the market bounce has for the most part subdued (outside of AAPL and the NDX stocks), action is fairly firm today relative to a re-declining Euro.

I've no intention of sticking out necks, or getting bold in either direction just now. If the market can continue to bounce, I'm looking to add longs accordingly; progressively. If we deteriorate again instead, I'm happy to defend; firing short on days when internals are extreme negative.

Easy enough.

Total Position: Currently ~1.9-to-1 net-long; 39% invested

Currently Long (according to size): EWY-S.Korea (8.2%); SBUX (5.0%); EWS-Singapore (5.3%); MF (reloaded today, 5%); CRUS (4.4%); ITMN (0.73%)

Currently Short: SDS-long (SP500 Index Dbl-short, 5.6%); EPV-long (Europe Dbl-short, 3.7%); Note: Inverse ETFs currently weighted @1.65 x's

Futures: no current position

Twittspit for details

Tuesday, May 18, 2010

Love the Bombs

The market is still half-empty at best here, very likely more than that. Just to be clear - since my last update (nearly years ago now) had me positioned long with the bounce.

We're in the midst of a correction and I'm not young enough to fight with that animal if it's not rising already. Market-neutral is about as long as I'm comfortable with for now.

I'm looking to attack on days where blood tints water (as long as I'm not on flights without internet, as was the case unfortunately Friday). I missed a decent short opp., Friday, but at least had the means to neutralize; out of reach from sharks teeth.

Blood is in the water, IMO, when market breadth is >5-1 negative (far more lately has been the case on the severe down-days). If you want to fight the trend on those days, give me the other side of your tickets. These are the sessions I'm looking to push hard, throughout the day, and then back-off again heading into the close.

Easy game.

Total Position: Currently ~1.36-to-1 net-short; 50% invested

Note: After a bit of math I have re-weighted the inverse ETFs below to 1.65 x's weight, from 1.5. This, as the list of long holdings has been lower-beta of late and as a result the short-ETFs are creating greater impact than previously.

Currently Long (according to size): EWY-S.Korea (6.4%); EWS-Singapore (5.5%); TGT (reports tomorrow AM, 5.3%); CISG (5.0%); SBUX (5.0%); ITMN (0.41%)

Currently Short: SDS-long (SP500 Index Dbl-short, 9.4%); SKF-long (Financial Index Dbl-short, 8.0%); EPV-long (Europe Dbl-short, 5.5%)

Futures: no current position

Twittspit for details

Wednesday, May 12, 2010

Deeply

I shifted long this morning, so I may as well say something. Not that I want to speak, but it's no longer acceptable to keep this page sporting a net-short stance when I've shifted my neck outward and long.

Yesterday was an interesting battle and I felt the shorts really won in the end (we bounced to the 50-day moving averages in the major indices and then closed poorly). Last night then, comfortable with my re-entry short into the NDX futures, I went to bed salivating bloodlust and eager to see what today would bring down.

Instead we saw a significant reversal in the overnight futures, from ugly to pretty-green and we're following through with a very firm tape now today.

I may as well point out that we might soon post an O'Neil follow-through day. Technically that would mean a rally-day of about 1.5+% in the majors, on rising volume, beginning tomorrow (or at least 4 days after the initial low). I guess I'm getting in front of this. Nothing of a new up-trend is yet confirmed and it may never for all we know.

I'm not exactly playing high-beta here and I have longs spread out in several countries (US, Japan, S. Korea and Singapore), but I am getting in front and will simply take the lumps (asap I hope) should things go wrong.

That's more than enough talk (since I'll be fired now if wrong). Add further insult - I'm off to Baja tomorrow for a (now) much needed deep-sea hunt-and-grunt adventure - a venerable machination celebration. I'll be spotty online and looking to update trades via Twitter (though those may come well after the fact if I can't get connected out to sea).

Don't do what I do!

Total Position: Currently ~3.6-to-1 net-long; 69% invested

Currently Long (according to size): EWJ-Japan (8.1%); INTC (6.7%); EWY-S.Korea (6.5%); EWS-Singapore (5.7%); NETL (5.6%); TGT (5.5%); DNDN (5.5%); MF (5.4%); SBUX (5.1%); CISG (3.6%); ITMN (0.43%)

Currently Short: SKF-long (Financial Index Dbl-short, 5.9%); EPV-long (Europe Dbl-short, 4.9%)

Futures: no current position

Twittspit for details

Tuesday, May 04, 2010

Updated Position (net-short, mouth shut)


Today's session had a nice rhythm. Tide was high, surf was strong, sets were readable. I lightened on shorts in the last hour, but remain almost 2-1 net-short overnight.

I'm still not putting energy into this blog during the market (nor most evenings), but posting trades and occasional observations, real time via Twitter. That's a much better delivery mechanism - I get off easy, clients can tell where we're pointing, and others can learn from my mistakes ;)

Total Position: Currently ~1.8-to-1 net-short; 50% invested

Currently Long (according to size): EWJ (increased today, 8%); MF (reduced yesterday, 6.7%); SBUX (5.3%)

Currently Short: SDS-long (SP500 index Dbl-short, 8.1%); JPM (7.9%); MS (5.9%); DB (4.7%); FCX (covered today); SKF-long (Financial Index Dbl-short, reduced today, 3.4%)

Futures: 20% Jun Br Pound short, ave entry 1.52055; 10% Jun Russell 2K short, from 721.80

Twittspit for details