Quicknote from a Dolt

I'm feeling better today, even though this was the worst session for me since fighting the tide, beginning last week.

Psychology in the markets is interesting and I have to play my own psychology sometimes. I cannot sit against the trend with conviction and feel good about it; not for more than a couple of sessions. I'd much rather be wrong and make money ;)

Wow, what cross-currents. If I hadn't been such a dolt, keying on the (million or so) toppy signs, I would have grabbed much more of these roman-candle blow-off moves in the growth names (Chinese mostly; but we have all noticed these by now, right?). I did catch a few, which hopefully saved me from the most unpleasant calls which play something like this: "How can I be losing money when the market has been so strong?"

I hate that call, which is why I fire myself from that client.

I also hate firing myself, so I am forced to do things I may not like, or may even think better of (like covering shorts in a blow-off move). But this is how you stay in the game.

I have only so much more game to stay in, so I'm not going to muck it up by standing in front of set after set. For the record, my mistake was not in covering shorts early today. My mistake was in not covering Monday (which failed to follow-through with selling begun Friday). After Monday, I was in front of the trade - not the best method for keeping your energy up and motivated.

Again, moving to the side is a fine strategy (and not used enough around here!), if and when you do not trust the trend.

One of the most interesting cross-currents is the institutional darling tag-team of GS and AAPL. Both exhibit an inability to rise, no matter what the tape looks like lately. I'm drafting a (Trader's Guide) piece featuring AAPL and will post it up later at ES; hopefully tonight.

RINO failed to close above the 2ndary price of 30.75 and I blew it out late in the session today. I know I've led you to believe I'm in love with this stock, but unless there is some good make-up sex in the very near future, RINO and I are over!

In fact, I hate all stocks equally. A healthy trait you should take from me.

Yes, I love a powerful, small-cap growth name that is beasting higher, but I cannot hold faith that such a small, unproven name ever comes back after posting a high-volume failure. Some of the best disasters begin exactly like this.

If I do play RINO long again, it will occur only like this:

-I will only buy that stock above 30.75, or...
-I will buy following a successful pivot (thrash-down + recovery)...
-Or finally, I may make a faith-buy below 25, but bench tightly then on the 50-day (currently 24.02 and rising).

Otherwise it is just another STEC-wreck to me.

Total Position: 1.8-to-1 net-long, 29% invested
Currently Long (according to size): DGW (11%), CML (4.5%), YONG (3.4%)
Currently Short (according to size): AAPL (10.4%)
Futures Accounts: no position

Ice Water Veins (and fortunately, shit for brains)

Fortunately, I remain an idiot.

The session was a little wild and I did whip myself some today, I'm still riding long, in push-it-till-it-pops fashion.

So while I did take some caution when a GS-led sell-off threatened to reverse the market today, I am happy to report I was crazy enough to whip right back to full-fool long-mode; once it became clear the reversal was going to fail.

Right back on the bike.

I suspect that bears got very excited when Goldman Sachs (GS) reversed lower and especially as that led to a reasonable counter-wave of selling throughout the market. If I hadn't had so many orders to enter, so many positions to monitor and 3 Faces of Eve to council (sorry Fred), I would have been lurking the boards for value today. Pure, natural value. But two things kept my mind thinking long, even without seeing the bear-board jamboree (and even whilst I was entering GS shorts myself).

First, the market internals were still very strong, down from extremely positive earlier in the session, and it was a broad-based, rising-volume rally. Second, leadership stocks (GS aside) were out-performing the major indices (again!). Third, the time-of-day was a little too early (12:30-1:00 EST) and didn't hold the weight of a late-day reversal attempt (time-of-day has provided an incredible edge many times for me in the past - I have discussed it plenty, though not lately; I'll look to explain the nuance of this again soon).

Fourth, even though I wasn't able to confirm, would I be wrong to suspect bears were pounding tables with extreme excitement? There was great cause for celebration after all - as the indices were up only .75% or so at that point! Practically an up-day if you had been short, right?

And while that is amusing, or not, it doesn't really mean anything going forward tomorrow. In fact it may even be a negative for tomorrow (especially after bears cover positions on the up-open). These were good only for today and on top of that, the now-choppy advance is a little suspect. Why? Well, tops are sometimes choppy in nature. Secondly, we have not yet traded to higher index highs (although leadership names are much closer to highs than the indices). Thirdly, you know about forty-five thirdlies, so let's leave it at that for now.

Anyway, this is a lot about nothing - especially when I won't even tell you how to use time-of-day to your advantage for a fake-out counter-move; Or why buying a high-volume breakout whereby a name is breaking-out on news of buying another company is such a high-percentage play (HRBN today, for example). Frankly, I'm not sure why you continue to read this site. I rarely post, compared to most, and when I do most of the time I'm just blowing steam and using you to organize what I might not think as much as anything otherwise.

See what I mean? Even when I am surmising what might be next it comes from a process of elimination, not anything so brilliant. Breadth was severe-strong today and suggested we would not see an ugly reversal. Trish came on and her opening comments did not even mention the strong rally in stocks, but instead she focused on the strength in gold and the weak Dollar (Trish would have been much more jubilant if we were going to reverse ugly. Trust me, she's that good). And those bearish boards, which I couldn't even visit so I have no right to flame today? They were no doubt salivating what little saliva was left in those giant cotton mouths - that today was progressing much like the key-reversal failure in the market a couple of weeks ago on Sep. 23rd!

Whatever. At least I always have myself to kick around once you guys go away. In the meantime, things could get exciting now. I'm going to froth and push and push again, until ugly again fairly flashes. At that point I am going to take cover as best I can, whatever my lumps may be. This way if we keep on higher (how ridiculous) I am not going to miss it. I can take the body shots of running out of a crowded theater with my ass already on fire. The real risk is a dramatic gap-lower - which means I'm in a building which has already collapsed; not good.

I'll risk the latter, until and unless there are clear signs of warning (which may be close, maybe not - htf do I know?). Or if it's a gift-horse right out of the mouth - like if Trish comes into the theater, takes a seat next to me and shouts sweet nothings into my Six Ears of Eve- I'll be godspeed the hell right out of there in such a case.

In the meantime - the machine still has teeth. Why fight the machine?

-Total Position: >10-to-1 net-long
-58% invested overall
-Pure-longs = 53%

Currently Long (according to size): HMIN (10.4%), HRBN (6.7%), SXCI (6.7%), CFSG (6.4%), DGW (5%), BCSI (5.1%), CLW (4.5%), SWM (4.1%), PTI (4.1%)

Currently Short (according to size): TER (5.1%)

Futures Accounts: no current position

Added Long (and Mount Deer Doom avoided)

Outside of the Chinese growth stocks, the market showed further resilience yesterday and I'm buying in some on today's early weakness. Nothing too extreme and I've spread-out now between 4 leadership groups.

Trades here are still being fed live via my Twitter page; while commentary on this side remains subdued.

As for the Chinese internet-content/video-gamer names yesterday, in the end action there was suspect at best. CYOU's The Duke of Mount Deer release-date will be delayed, God forbid, and the name remains under pressure. I'm not yet against it, but I've yet to reload any trigger there. While they have yet to break anything significant, volume has been heavy on the decline.

Total Position: 100% net-long, 28% invested

Currently Long (according to size): MRVL (8.2%), BIDU (7.1%), GS (7%), NTAP (5.9%)

Currently Short (according to size): no current position