Updated Position (slight shift long)

I scaled into a modest net-long position today, by adding long and reducing the TWM-hedge.

Some thoughts on new long HEAT (Heatsmart Inc.) were posted earlier today at Evil Speculator here.

Total Position: ~ 1.66-to-1 net-long, considering levered (2x's) TWM hedge
-40% invested overall
-Pure-longs = 29%

Currently Long: (according to size): HMIN (7.9%), HEAT (new today, 6.67%), DGW (increased today, 6.6%), SHOO (5.3%), CYD (2.4%)

Currently Short: (according to size): TWM-long (Russell 2k Dbl-short, reduced today, 10.7%)
(Note: inverse-ETF TWM represents being dbl-short the respective index).

Futures Accounts:
-10% short Dec Euro: reloaded tonight at 1.4872 (relevant accts)
(Covered 20% Dec Euro today, 1.4830 ave; from 1.49215 ave. previous entry Friday)

Bear Market for Bears

Life is tough for bears again today, as the ridiculous market rally takes them once more by the horns and runs with it.

Bears remain right, heads and shoulder patterns above the rest. I mean, we've moved too-far-too-fast, well, too-far and too-fast. The market must be rallying out of spite at this point. Anyone in their right mind knows it's completely unreasonable. Lives will surely be taken now and soon.

Fortunately, I remain an idiot.

One bone-fide negative divergence - the Dow is leading the major indices higher. The Nasdaq, NDX and Russell-2k have yet to make higher-highs along with the Dow. The broader NYSE has managed a marginal higher-high, but you don't like to see Jonestown leading a charge higher; especially should the NDX and Nasdaq turn down at lower-highs.

Fine. In the time it took me to write, link and edit the previous paragraph, all but the Russell-2k have traded now to marginal higher-highs. If the market reverses lower today, it will qualify as something ugly (something like a doomed house head and shoulder head fake) - which would indeed force me to adjust.

In the meantime, Chinese growth names traded in the U.S. continue to lead (leading even those Dow Jones's) in the U.S. and I have to answer as to why I have any hedge on at all just now.

Bah!

-Total Position: ~1.75-to-1 net-long, considering levered TWM hedge
-67% invested overall
-Pure-longs = 52%

Currently Long (according to size): ASIA (7.4%), HMIN (7%), HRBN (7%), WATG (6.2%), DGW (5.3%), RKT (5.1%), CFSG (5.1%), CLW (4.5%), ININ (4.5%)

Currently Short (according to size):
-TWM-long (Russell 2k Dbl-short, reloaded today, 14.8%)

Futures Accounts: no current position

Trinkets and Trims

I've settled down a bit today. Went to bed late, got up early and listening now to Bob Dylan Christmas songs to ramp energy back upward.

As far as the market, it's quiet so far, for a change, so I'm not changing all that much; even if I am increasingly concerned about the ensuing face-plant I'm going to have to dodge once the roof starts caving.

Actually, I prefer this set-up (hence the aggressive allocation). I sit, mostly quiet, climbing up and down my plywood box of worry; convincing myself that I am on guard for disaster when really I am just jamming the throttle forward with whatever amount of thrust I can justify.

Fear is fine, but full fanged fighting is better.

Anyway, enough talk. I'm filling white space again and your tired little eyes have so many place still to run. On your bike - off you go. Come back after the train wreck and look for the carnage. I'll be strung up and spiced, like a carcass of pepper jerky.

...Bob Dylan Christmas songs still in the background.

-Total Position: 11-to-1 net-long
-61% invested overall
-Pure-longs = 56%

Currently Long (according to size): DGW (increased today, 6.8%), SXCI (6.6%), HRBN (6.5%), CFSG (6.4%), SWM (6.1%), BCSI (5.2%), HMIN (reduced today, 5.1%), WYN (new today, 5%), CLW (4.5%), PTI (3.9%)

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

Futures Accounts: no current position

Carnival Knowledge

While I know action in the US market has a direct impact on Chinese growth ADR's traded in the US, a large part of me this morning was wondering if these companies should be so woeful of lack of jobs in the west. So woeful as to gap-down an additional 5-10 percent on our negative news.

I'm having a good day and making up for yesterday's drubbing in rapid fashion. But I've still got hands (and now feet) on the chopping block and have to focus on where I am going from here. Sell, hedge or swing this position as-is into next week.

Terrifically boring, I know - but if you were jumping up and down with hearty gains last night, as you were so brilliant as to be short this ridiculous market, then you're likely getting whacked again right now. Contrary to how we like to behave, up and down excitement is no edge in the long run. Steady, dull and boring might just be better.

Yes, there are bears who were short and covered at the open today. That's good for them because they got the week exactly right. But the day you celebrate is the day you should be out of the market, not in front of it. As the next day (or next) will bite your brilliance down.

Fortunately for me, I remain an idiot. Aside from clear and obvious set-ups like a highly anticipated pathetic jobs report, I don't want to get in front of the trade. I don't want to prove anything to the market. I don't care that the world economy is a board game, I don't care if athlete's utilize growth hormones to enhance performance, and I don't care that old-world Chicago cannot topple an emerging giant.

We are so subjectively focused, aren't we? I mean, how can this US market have rallied so high since March when we can't even buy the Olympic games anymore? What's been driving this rally anyway?

That's all the bile for now. I've got the rest of my RINO position (beast!). And apparently water treatment jobs in China must be doing OK, because group-mate DGW was also a bit of a gift at the open. I also have to deal now with too-much CFSG and not so much TSL. All from China, somewhere east of Rio.

Brag post? Undoubtedly. But in younger times I would have attempted being 200% short yesterday, covering and backing-up the truck long at today's open, head for Mexico for the weekend and then come back Monday in time to blow myself apart. I can't trade like that anymore.

Unfortunately ;)

-Total Position: >3-to-1 net-long, considering levered TWM hedge.
-55% invested overall
-Pure-longs = 48%

Currently Long (according to size): CFSG (increased today, 8.2%), SXCI (6.3%), SWM (5.4%), TSL (new today, 5%), RINO (increased today, 4.9%), BCSI (4.8%), JDAS (4.6%), DGW (new today, 4.5%), CTSH (4%)

Currently Short (according to size):
-TWM-long (Russell 2k Dbl-short; reduced today, 7.7%)
(Note: inverse-ETF TWM represents being dbl-short the respective R2k-index).

Futures Accounts: no position