Friday, July 30, 2010

Coward Ace (and picking vacations wisely)

In war and in the markets, get away from fights you are not winning.

I wouldn't mind day-trading the action here, but otherwise things are becoming too choppy to pretend you can hold a large line and beat it. Worse (from a bullish perspective), more than a small spat of leadership stocks have been woodsheded now after reporting earnings. Tech groups, and semi's especially, have begun under-performing; a material concern should that trend continue.

Yes, I did say bullish perspective, since unless you have been trading extremely short-term and picking your spots with perfection, you have been knocked being short this market - even as THE ECONOMY IS GOING NOWHERE!!!

What's an economy? I thought we lost that a couple years ago.

Fine. I'm looking forward to taking a breather now in August while all of this works itself out (or doesn't). If the market goes bad, I'll reduce further (and/or hedge, depending) but I'd prefer to wait for the calendar to catch-up some before shorting. This July has been the best monthly gain for the market over-all in a year. Why would I want to short that? Why do so many insist still on fighting?

Given the collective genius remains skeptical of a market that is posting it's best month in a year (even if some cracks may be starting to surface), I won't be surprised if August only further frustrates bears. However, a weak market heading into September, should we see it, is one of the easier ways to make money being short. That would be a set-up to get net-short about. The September month is a net-loser historically, especially for growth, and the September/October combination is rarely a bull's best friend (except for sick buy-entries which commonly come out of that period's lows; pivoting upward then for a strong Q4).

Don't fight losing battles. A mantra which makes your winning fights significantly more profitable.

I scaled into a much smaller line here lately and dodged some bullets as a result. Some of those problems avoided were because I moved away from anything about to report. I had seen enough blow-ups to get religion (after taking a body-shot from NFLX earnings and eying enough after-market debacles where I held no position, I was sure to steer clear of earnings from names I'd been long recently like AKAM, APKT, CAVM, LOGM and NETL (to name a few skewers).

The fact that so many strong growth charts drew swords on themselves, especially in tech, is a wake-up call if not something more serious. Again, I'll hang-out lightly invested, with smaller numbers and smaller position sizes, while August takes shape.

Next week I will be remote, but generally tuned-in, while the following week I'll be basically out of commission altogether (and likely hedged that week if only for that reason).

If you're making money in this market, then by all means have at it. But if it is becoming more and more challenging, then August is not a bad month for the sidelines. Accounts here remain fat on the year and came through the recent mulch undamaged, but I attribute a lot of that to getting religion; since some of the leadership names I have been pushing on would have hit back significantly had I been more brave.

Fortunately, I'm more of a coward...swimmingly fat for vacation.

Follow Centrifugal to fade trades in real time.

Total Position: Currently 100% net-long, 33% invested

Currently Long (according to size): EWS-Singapore (7.3%); CRM (7.2%); CXO (5%); OVTI (4.9%); CYT (4.6%); VMW (4%)

Currently Short: no current position

Futures: no current position

Thursday, July 22, 2010

Resolution #9

After whip-sawing and crack-jawing every day since last Thursday, today smacks of resolution.

I suggest this based on the combination of higher-highs (since the floor-drop last Friday); positive momentum (shorter-term technicals pointing upward); sufficient gloom, malaise and/or general disrespect (negative sentiment is prevalent, even among buy-only professionals); and today's severe-positive internals (extreme positive Advancing vs. Declining stocks, on strong, rising volume).

Bears should be left hungry now, as a rally has apparently begun to thaw.

I've let go index hedges, but I'm so far holding onto a couple names short. If I'm wrong to give up hedges here and protection turns out to remain important, then I am going to begin letting go longs (gradually, appropriately and according to the pressure) instead of re-hedging and keeping this heavy line. Part of this is because it is getting to a now-or-never period for holding a bullish theme (now that I can taste the resolution, I know I'm in trouble if it fails), but also because I am going to be trading lightly for most of August and I don't want too many kids in the crosswalk while I'm not around minute-to-minute to direct traffic.

August note: August this year will be my rest-month. At my age (I am ancient you know), I take a hopefully-slow summer month to rest my brainpan; in order to better ramp-up for fall and winter (my two favorite market seasons). I expect to have fewer positions as we get to the end of July.

Follow Centrifugal to fade trades in real time.

Total Position: Currently 5.29-to-1 net-long, 69% invested

Currently Long (according to size): CRM (9.9%); CXO (7.8%); EWS-Singapore (7.1%); AVGO (6.7%); VMW (6.1%); APKT (5.8%); LOGM (5.3%); OVTI (5.2%); NFLX (reduced today, 4.6%);

Currently Short: DISH (6.3%); BP (4.7%)

Futures: 30% Long Sep Russell2k, from 628.35 ave; added today, 1-3 day trade

Thursday, July 15, 2010

Updated Position (lull lurk higher)

I'm continuing to write elsewhere (offline) and as such continue to refrain from saying much here. Fortunately (or not!) I'm on the Twitter everyday.

Follow Centrifugal to fade trades in real time.

Total Position: Currently 2.11-to-1 net-long, 61% invested

Currently Long (according to size): CRM (9.8%); EWS-Singapore (7.1%); VMW (6%); NFLX (5.2%); LOGM (5.2%); AVGO (4.9%); OVTI (4.9%); HAS (added today, 4.4%); CYD (3.2%)

Currently Short: DISH (6.3%); TWM-long (Russell2k 2x's-short, 4.9%); EPV-long (Europe 2x's-short, 4.6%)
Note: Inverse ETFs currently weighted @1.6 x's

Futures: no current position

I'm continuing to write elsewhere (offline) and as such continuing to refrain from saying very much here. Fortunately (or not!), I'm around to fade everyday on the Twitter.

Wednesday, July 07, 2010

Pivot Higher

The market is breaking above some resistance just now. As dull as I can possibly say this, I expect we'll begin hearing "summer rally" uttered often in the near future. How big a move, I never care to predict (leadership is live and that is my calling). And ultimately then, September will be looming.

Hence, I'm all for making it now, while one can and while long-only types still fear to play; coincident with still-decent charts supporting the leaders.


Total Position
: Currently 3.47-to-1 net-long, 77% invested

Currently Long (according to size): NFLX (10.5%); CRM (10.1%); OIL (8.1%); EWS-Singapore (6.9%); TJX (added today, 5.7%); VMW (reloaded yesterday, 5.5%); LOGM (5.2%); SBUX (reloaded today, 5.1%); NETL (reloaded today, 3.8%)

Currently Short: QID-long (Nasdaq100 2x's-short, 11.7%)
Note: Inverse ETF currently weighted @1.6 x's

Futures: no current position

Follow Centrifugal to fade trades in real time.