Sans Hedge (running long for the memories)

Fortunately I remain an idiot.

So far so good with this new swing higher. I went into tonight with considerably increased long exposure, only two core-shorts, and nothing in the way of index or other hedges. I'm playing this beast as if it were 1999.

For a day.

I won't speak for next week and I will look to hedge + reduce late in the day tomorrow (sooner if sellers regain control). But tomorrow should be a relatively quiet affair, whereby leadership names (perhaps others, but I'm not really concerned there) drift higher on low volume. It will get thin late in the day and so I need to work orders a bit, but if it plays out like a standard pre-holiday April session it will be rewarding enough.

I wont be surprised to see strength last into Monday as well, but I'll have much of my ass off of the chopping block by then. If we get a bang-up session then Monday, I will step over the bodies of the shorts and look to remove nearly all of these long goodies; or at least scale myself short enough in other places in preparation for the next wave of selling. But as with the strategy previously, if we can keep a more slow and steady rise higher I will hang in until things get more emotional, or until sellers take control (hanging in long as long as profitable in the meantime).

Again, don't do what I do. My current position is like running across the freeway to grab bars of gold - it can be dangerous if poorly timed (and one gets a little heavier with each additional bar).

to my mind it is 2AM and Sunday morning and I can run like god (the tape is piling up bars of gold and traffic is negligible). But to you there may be Mack-trucks ready to take your ass up into your brainpan, for all I know.

It's a little late to ramp-up at this point anyway. The on-ramp was earlier this morning and the exit-ramp is not far off. Such is the spoils of a rally in this rotten, loathsome market ;)

Sick.

Total Position: 5.8-to-1 net long, 88% invested

Currently Long (according to size): NFLX, RIMM, ARST, BBY, CYOU, MNRO, BKE, TSYS, CHKP, MYGN, DRI, RJI, WNR, TNDM

Currently Short (according to size): GE, AAPL

Swing Long (re-shift for holiday week)

Diving into the cold water today. I've let go hedges and am focused now on being long for the remainder of the short week; assuming that plan doesn't deep-freeze performance.

Assuming this plays out like a reasonable market in a Good Friday week (ha!), things should start quieting down now and prices of leadership stocks should begin drifting upward; on lower volume. Saying 'reasonable market' is a stretch, but I have to acknowledge that many charts look very positive still and once again sellers cannot get much traction after a renewed attempt. I'll try to adjust quickly if this position fails; so far so good.

Retail is quite live today and various retail groups are ranked highest now in terms of relative strength. Retail is where I've focused most of my buying today.

Total Position: 4.6-to-1 net long, 72% invested

Currently Long (according to size): BBY(new), CYOU, TSYS, MNRO, BKE(new), NFLX, CHKP, ARST, RJI, MYGN, DRI, TNDM(new)

Currently Short (according to size): GE, AAPL

Rearranging Deck Chairs (short here for now)

Whatever I think about the market just now doesn't mean a great deal and it is subject to change rapidly anyhow. So let's just discuss more how I am positioning and less what the bigger picture paints.

I shifted short in the pre-market again and this time it looks like I will stick with that; for now. Later in the week however is the Good Friday holiday and as such we might see some seasonal strength come in on Thursday. It is possible I will ease back long by Thursday, depending.

I'm having a good session, especially considering that I was considerably net-long when I woke up (I changed that stance abruptly, as yesterday's less than stellar attempt at a reversal was going to be gapped right out of the picture today).

Good luck seeing the same kind of recovery today.

I sold several longs early in the regular session, but I did make one bothersome mistake. I managed a terrific entry long yesterday in the aftermkt on the new ipo CYOU. I mentioned then (via Twittspit) that >22 was really a better buy, but then today I went and sold it at 22.20 early in the session (grabbing the quick profit as I was nervous about my overly-long exposure and was selling things quickly, perhaps abruptly). Since then it has managed to take out the day-1 high and with strong, rising volume. This name hails from a leading group (same group as SNDA and NTES) and one of my favorite trades is to get long an ipo when it takes out the day-1 high (getting above that level demonstrates that buying demand is greater than the profit-taking supply; from those who got in on the ipo price and then are flipping to lock in quick, handsome profits; momentum and demand are greater than anything that can stop it).

If the market is going to manage a standard pause before re-climbing higher again (too soon to say and a bit ambitious perhaps) then CYOU is the type of new leadership I will jam hard with for the remainder of its first several weeks (or until it stops leading).

I bot back the same size of CYOU at 22.92 and am wearing that one still; we'll see what happens.

Total Position: 1.1-to-1 net long, 77% invested
(Note: though the position is slightly net-long, technically it is leaning notably short due to leverage of the 2x's short-hedges TWM and SRS; TWM-weight is >15% at the moment)

Currently Long (according to size): TSYS, ARST, MNRO, NFLX, CHKP, RJI, MYGN, CYOU, DRI

Currently Short (according to size): TWM-long (Russell-2k Dbl-short), GE, AAPL, VNO, SRS-long (US Real Est. Dbl-short)
(Note: inverse-ETFs TWM and SRS represent being dbl-short the respective indices)

Quicknote (regarding today's gap lower)

Toppy action is set to resume and it looks like we will gap-lower into the neighborhood of yesterday's lows. This nullifies yesterday's near recovery and sets the stage for a potentially difficult day for longs. I've added to TWM (now 15%) and initiated a sizable GS short hedge (9%...GS 200-day is 114.94 and it has yet to do vol above that level; good hedge below 115).

Finally, I have spent many hours updating a new list of eligible shorts, but am sorry to say it is not complete and I cannot rush it at this point. I will point out anything relevant via Twitter in the meantime.

What's Black and White and Walked All Over?

The market firmed in the final 90 minutes today, though it did not manage to reverse.

What it did do is manage to sink the hopes of the bears; yet again.

This may be significant, but I'm less inclined to view it as a great positive for the market at this particular moment. I saw despair from bears today and I saw giddy awe from the bulls; meanwhile, it was a negative day for stocks overall, even if volume was lower on the decline; few leadership stocks are making new highs and it is a rare day that leading groups are not eclipsed by more beaten-down uglies making up ground.

Also (perhaps) relevant, some of the more popular, front-running bear voices were covering early today, which frankly makes me wonder. Not that it was a bad move - but if you are going to endure this length of pain, have your head slowly pulled from sockets as the counterblast ever endures, then how on Mars can you cover when it finally turns your general direction?

That psychology concerns me. Not to mention the increasingly glistening boilhead glee and salivating spray spewing forth from Cramer's mouth these days; as he credits himself for the greatest bull call since Freud discovered the ego.

If you're not following me, I'm on guard now for any sign of failure. The 4-week tally ended Friday was in fact the greatest Dow move since 1933; and the greatest 4-week upside ever for the Nasdaq. While that sounds like tremendous strength it is unfortunately (or not) indicative of a bear market rally. Study the greatest gains in short periods of times and you'll see a vast majority take place within a bear market; whereas the beginning of a new, secular bull markets begin with a generally calmer advance.

Anyhow, this is not a bearish call (not yet at least). My style is to adjust to the market and respect the intermediate trend until that trend has confirmed a change. Fortunately I'm an idiot, which can save a lot of money.

As such (an idiot) I re-adjusted the second half of the session and eased right back into a net-long stance. If the tape is positive tomorrow, then I will let go my remaining TWM hedge and consider covering shorts and/or adding to longs.

If I see further toppy action however, I am going to shift neutral asap and progressively shorten my stance as much as negative action dictates. Cramer can only inflate so much before he pops. I don't wish to share in that guy's pain as he swallows the last of his own Koolaide.

Oh, in spite of the late show of strength today, I did short 6% chunks of AAPL at 118.74; as that former-leader met-up with its 200-day m.a. late today. I have contended for some weeks the potential that the Nasdaq and AAPL may top when the latter retraces back to its long-term moving average. It's been more of a post-it than a bold call, but nowhere in my mind will I be surprised if it does indeed play out that way. This is more of a core-position short (as opposed to a simple hedge); I may be early and I will not hold on this attempt very long if it can keep above the 200-day (currently 118.47); but ultimately I am looking to short this aggressively as the stock fails from this general level. I'll wait until I know the position is working before elaborating why (I have fundamental arguments, but so far this shot is based merely on the technical key-average).

Regarding the updated list of eligible shorts, I will do my best to get that out tonight, but it may not be until very late, or even closer to the open tomorrow.

Total Position: 2.8-to-1 net long, 85% invested

Currently Long (according to size): PMCS, TSYS, MNRO, WNR, ARST, NFLX, CHKP, LFT, RJI, MYGN, DIOD, CYOU (new), DRI

Currently Short (according to size): TWM-long (Russell-2k Dbl-short), GE, AAPL, EGO
(Note: inverse-ETF TWM represents being dbl-short the respective index)

Save Our Bears

How much longer can we punish these under-water bruisers?

While we haven't yet seen any important break yet in the major indices, action is toppy today and the internals negative enough to suggest things won't likely improve before this session is concluded.

Bears are breathing again.

If we surprise and manage to reverse today, it would be important and I would go back to keying long leadership. Without that, it is a question of how dark things shade today and ultimately then what amount of downside follow-through we'll see tomorrow.

I was able to slide myself short here without much damage and at the moment I'm positioned well for the present action. If things deteriorate more dramatically I will begin letting go the long-end of my position, otherwise I am looking for where to add to the right names and when to let go of hedges. Below 810 on the SP500 I would be less ambitious to be buying or adding to longs; below 775 on the SP500, I expect I would be aggressively short.

I sold the IOC today on the positive discovery-news; I added to a winning ARST position on the low-volume slice lower; I have been working RJI and almost finished reducing to ~4%. Keep up on the feedTwitt if you please - just don't do anything I do (at least not because I am doing it).

I'm working on an updated working list for individual shorts, which should be posted by tonight at latest.

Total Position: 1.75-to-1 net long, 83% invested
(Note: though the position is technically net-long, it is leaning notably short, due to leverage of the 2x's short-hedges)

Currently Long (according to size): PMCS, ARST, WNR, NFLX, CHKP, LFT, RJI, MYGN, MNRO, TSYS, DIOD, DRI

Currently Short (according to size): TWM-long (Russell-2k Dbl-short), SDS-long (SP500 Dbl-short), GE, SRS-long (US Real Est. Dbl-short), ELOS, EGO
(Note: inverse-ETFs TWM, SDS and SRS represent being dbl-short the respective indices)

Updated Long List (eligible growth for strong tape)

[scroll below to skip the explanation...]

The below list comprises my eligible longs for the coming week, based on a compilation of various relative strength screens. I have removed most names which are either very thin and/or have a very high degree of short interest and/or poor fundamentals.

For most of these, I need a strong tape to consider purchase or holding. Briefly, here is how I use the list: If a trading day is strong, or if it is mediocre but I am too short-weighted for the action at the time, then I look to the Industry Group Rankings* for that specific day. From the top-ranked groups in that session I then look to the eligible names below from the respective group(s); this then may generate a trade for just the day, but usually I set out as if it will be a swing trade at least (adding then on strength and reducing or eliminating on weakness).

In other words, if I want to increase long exposure I look to the leadership of the day and quickly scan my names below in that day's leadership categories and quickly attack the stronger set-ups within.

*Intraday Industry Group Rankings stem from Daily Graphs (subscription service), which includes intraday rankings of IBD's 197 industry groups (15 min delayed, unfortunately). I find the screen most beneficial 45-to-90 minutes into the session (there are less reversals at that point, yet it is still early enough to capture further strength from that day's tape).

This briefly describes how I go about adding names. This is in no way investment advice.

I will be working on a new working list for shorts, which should post in a day or two, depending on the strength of the market.

Updated Long List (eligible growth for strong tape):

Semi's-Manufacturing:
SWKS
NETL
PMCS
DIOD
TSM
SPIL
CREE
DIOD
ARMH
STEC
SMTC
HITT (thin)
CY (reports Apr 16)
MRVL
NVDA
OVTI (>8.56)
ZRAN
BRCM
MPWR >16.67

Semi's-Equipment:
NVLS
CYMI
FORM
KOPN (thin)
UTEK >12.80; thin
VSEA
LRCX
AMAT (liquid, but lower RS)
KLAC (liquid, but lower RS)

Internet-Network Solutions:
ASIA
DRIV

Software-Security:
ARST
CHKP (>22.00)
MFE
MVSN
SYMC
BCSI

Chemicals-Fertilizer:
SQM
TNH
SMG
CF
LXU

Retail-Restaurants:
DRI (12% shorts)
PZZA
EAT
JACK
BKC
CBRL (18% shorts)
BOBE
SBUX >12.00
BJRI (15% shorts)
CEC (9.5% shorts)
EAT
CAKE

Software-Financials:
EPIQ (thin)
LFT (thin)
PEGA (thin)
ACIW
ADVS (thin)
INTU

Oil/Gas-Refining:
WNR
ALJ (thin)
IOC
DK
ETP >37.15
UGP

Oil/Gas-Transport/Pipeline:
MGG
NSH (thin)
WES (thin)
EPE >23.20; thin

Software-Medical:
MDRX
SXCI (thin)
CPSI (thin)
CERN
CPSI (thin)
ATHN

Retail-Auto/Parts:
ORLY
MNRO (thin, but volume increasing)
AZO
AAP
AN (16% shorts)

Retail-Discount:
BIG
FDO
DLTR

Software-Enterprise:
BMC
TSYS
ORCL
SY
TLEO
OTEX (13% shorts)

Telecom Svcs:
TNDM (thin)
CBEY (thin)
Q

Telecom-Wireless Equip:
QCOM
PALM
RIMM (>60)
IDCC

Telecom-Equipment:
MTZ
ARRS
BBND
ADTV
TLAB

Retail-Leisure/Electronics:
NFLX
BBY
DKS
HIBB

Internet-Content:
SNDA
NTES

Bldng-Hvy Constr:
GVA
ACM >25.75
URS
SGR (reports 8Apr, aftr close)
PWR >23.27

Retail-Clothing/Shoe:
ROST
ARO
BKE (11% shorts)
CTRN (thin)
DBRN
AEO
GES
TJX
HOTT
CHIC

Internet: E-Commerce:
AMZN
GSIC
SFLY

Comml Svcs-Market Rsrch:
FDS
IDC
TRIN

Medical-Genetics/Biotech (groups remain highly ranked, but dropping now in score):
MYGN
LIFE (32.13)
CRXL
OPTR (thin)
IMGN
ISIS (10% short)
THRX (13% short)

Honorable Mentions (most hail from a lower-ranked industry group):
GS
MS >24.75
OCN
SF
BBY
AIPC
WDC
WIRE
SNX
TECD
CEO
DTSI
BEAT
NICE
HANS
DLB
VNUS (thin)