Blitz Thoughts re ONXX (talking my book, sucker)

I'm nothing of a biologist, so dismiss anything I have to say here regarding cancer drugs in clinical development. I'm also in a hurry and this is sloppy, so just dismiss all of it.

Sucks to be me.

My expertise is trading stocks and to my eyes, the Biotech group (at moment) is your best beast and ONXX is something of a monster stock (i.e. beast!).

Don't do what I do, but here is why I do it...

ONXX is extended, and selling-off today on news of phase-II trial results re Nexavar. As I suggested, the stock has demonstrated sufficient relative-strength and momentum to elevate it to the top of my buy-long lists. Nexavar is already deemed effective for use in kidney and liver cancer. The drug prolongs life and does not cure the fatal nature of these diseases. More recently though, they are testing compounds of the drug for use in other cancers.

ONXX will report further data on June 6th, at ASCO.

Here is my strategy on buying the dip today in the name, though it can go certainly trade lower...

The market is still a little suspect (since early May), but healthcare and biotech acting very well. The top industry groups at moment, as measured by relative strength, are littered with Biotech and Healthcare. This is your true market leadership, as far as industry groups.

ONXX, is at a buy-point this morning (between 42-43). Speculative, but very powerful, and with an exciting, developing pipeline (maybe).

I've been trading this name long the last few weeks - sold yesterday and re-bot now today. Don't get jealous though - I also had emergency root canal this week.

Plunger boy!

For a trade, you buy today and sell just ahead of the Jun 6th presentation of data.

For a speculative investment, you would buy today and hold for the presentation; bail-out only if they ultimately disappoint w the presentation of data; or if stopped-out prior.

The 3rd option is to sell half or more before the presentation and hold some for the event. This is my likely play; subject to change any time.

Benchmarks for stop-loss are going to be a moving target. I will keep mine defined via Twitter posts. No guarantees and I might get it exactly wrong. Fade me instead sucker.

Keep it light - it's a mover

Follow @Centrifugal (still!) to fade trades in real time

ONXX: May 19, 2011 (intraday). click chart twice to expand

Developments on the Psychological Tape (take heed or be headed)

I don't have much time and I don't blog much anymore, but since my current-best Super Secret (SS) psychological indicator triggered late Friday, I figure I owe you at least the courtesy to mention it.

Bah!

How much does this matter? None I hope - I like a roaring market as much as anyone. But as these machines gain furiously on the heels of my human mind, I don't attempt to play every set-up. Instead I look for set-ups I know I can trade and get out of those I'm less sure of. There are times, mathematically speaking, where I do accounts a great justice simply by identifying when might be a good time to back-off and let the rest of the crowd make all that money. Ease-up on the accelerator and hover the foot above the brake pedal; determine then whether or not to begin braking.

How significant is this negative indicator I'm alluding to? Well, we don't yet know and in fact news broke very soon after which might explain why the emotional octaves of SS Scott W. triggered as they did during the last trading hour of an otherwise fabulous week. After Friday's close, news broke that Erin Burnett is being hired away (to CNN from CNBC). This story, developing behind the scenes at CNBC, may possibly be behind what excited our special agent enough to induce a signal; perhaps it would not have triggered otherwise.

No matter - if the sky might fall and you've been warned, it is best not to stand directly under the sky. I will trade off of a signal from Mr. W. until he stops being Mr. W. They come few and far between these days, but that is the nature of elegance (harmonious, brilliant, fleeting).

As for the exit of Erin B., I can only say thanks - as in thank god! She never once gave me something to trade off and the cumulative debris in my headpan is forever reeling from the extended overdose regarding the sound of her voice.

I cut long-only exposure from 85% to under 50% and I'm on guard to hedge-off remaining longs should Monday's action warrant it (Monday's and the first day of the month have been notably strong for some months now. Thus it will be easy to determine if the strength of the market is truly suspect. Anything less than a broad rally will have me responding in kind and hedging).

Inversely speaking, here is what SS Scott W. has foretold (yelled-out actually) for the near future:

1. The US Dollar is set to bounce
2. The US Stock Market is set to pullback
3. The Silver market is poised to decline
4. Institutional Money will be net-sellers of equities prior to the conclusion of QE2 (end of June)
5. What Everyone owns is not worth owning (at least not once SS Scott is announcing why they own it, excitedly and loudly).

Laugh, scoff, spit if you please, but push the Dollar short and Stocks long right now at your own peril. Again, it doesn't matter if fading this man turns out to be a good idea or not. I don't need to squeeze every dollar out of the markets - but by avoiding the big set-backs I maintain a mathematical edge against the rest of the players in the long run.

I scrambled and began selling stocks abruptly, but I resisted neutralizing altogether, as 1st Monday's of the month have been a major edge. Meanwhile, getting net-short at this stage, even if we see a weakening market Monday, would be a little premature for my point of view. This is not a bearish market call and I'm not so young or heroic as to short a runaway bull market; run that trade a thousand times and you lose, defiantly.

But when Special Super Secret Scott W. can tell the story of why the dollar is going lower and stocks and precious metals are going higher to a fifth grader...AND he's excited about it - that's the time to move to the middle of the ship.

You stand in the way of this guy. I choose surviving.

Follow @Centrifugal (still!) to fade trades in real time

Total Position: Currently 100% net-long, 46% invested

Currently Long (according to size): CRM (15.2%); APKT (13.8%); PPO (8%); DPS (5%); ACTG (4%)

Currently Short: no current position

Futures: no current position

Night Gallery (tread-well edition)

CNBC R-Spot (cnbc's rolodex spot price for west texas crude)

Whichever producer(s) over at CNBC mining the wires and inviting guests to suggest where the price of crude oil should be headed are on quite a roll lately. But I'm not sure they know how good they are.

I'm calling this CNBC's Rolodex Spot price for Crude, or CNBC R-Spot...

Thursday 24 Feb:
-WTI Spot price has topped $100/barrel - posts high of $103.41
-CNBC runs call for $220/barrel, multiple times throughout session (Oil could hit $220 a barrel if Libya and Algeria were to halt oil production together, analysts at Nomura investment bank predicted.)
[SELL $220 CNBC R-Spot; WTI = $102 - $103]
-Exchanges hike margin requirements for crude oil futures after volatility increases
-WTI Spot price drops dramatically late-session, to low of ~98.20, coincident to rumor Gadhafi shot
-After-hours electronic session sees WTI low of 95.62

Friday, 25 Feb:
-Saudi's promise to increase production to stem issue of retarded Libyan supply
-WTI Spot ranges from 96.17 early low to 99.20 late high; closes week out at 98.23
-CNBC runs morning analyst call for $70; switches to alternate call of $60 call later session.
[BUY CNBC R-Spot $70 and $60; WTI = $97 and $98]

Wednesday, 2 Mar:
-WTI Spot trades to early low 99.21 to a high of 102.50
-CNBC talking oil non-stop all session; today's reported price target: $130 (Libya's supply disruptions to world markets could push oil above $130 in the next month if troubles persist)
[REDUCE CNBC R-Spot $130; WTI = $102]
-CNBC's Fast Money program after hours sports a unified theory that strength of the Oil and Energy markets are only going to take prices higher
[SELL CNBC R-Spot "only higher" WTI=102.50]

CNBC R-Spot price currently stands at $130/barrel. I like selling here or higher [the fictional price] and I like buying $85 and lower (Note: $84 is about where we actually came from, and is where some Rolodex experts fashion it should trade back to with resolution in Libya).

Easy game.

Follow @Centrifugal to fade trades in real time

Mid East Certainty (there's only one certainty right now)

While I'm not complaining, it's been sometime since my last post. Given the market's love of certainty, I thought I should finally chime in.

Sick or otherwise, I'm continuing to key the energy sector and the crude oil commodity - buying oil as dictators fall (or on rumors of their fall) and selling oil as chaos escalates. I sold oil Wednesday and Thursday, into the turmoil, but turned around and started scaling in again by later Thursday; as rumors of Gadhafi's death helped to knock prices down a quick 5%.

Mubarak's fall generated similar buying opportunities (2 or 3 in fact).

CNBC's Rolodex is getting quite a workout lately. By last Thursday they ran a story calling for $220/barrel oil, as emotions peaked, only to bring on analysts calling for $70 and then $60 then next day, Friday; as the price came in. Put me down then as a seller of $200 oil; a same-day buyer if I can get it down to 60.

And today, CNBC has flown an ace reporter out to Cushing Oklahoma, to discuss the current glut of US crude oil (the same story repeated several times throughout the day). There is plenty of oil out here. Oil should not be trading where it is right now. The price is sure to drop. Etc., etc., etc.

Give them a couple days. CNBC $220 oil might be topped before this week is through.

Seriously, uncertainty in the Mid-East has ratcheted-up the risk-premium in energy. This you know well. But while CNBC heads think oil will fall as Gadhafi falls (they're beginning to sense this), I would argue that Gadhafi's downfall is about the only certainty we can count on right now. The same was true during the second-half of the Mubarak drama. Outside of how and when he was going down, Mubarak's end was a certainty. Now, take Gadhafi out and what are we left with? Uncertainty. Pump your fists in triumph as he falls and allow 20-30 seconds for good feelings; then let the questions begin again.

I've got orders open now and I'm looking only to add to oil positions (and re-load oil futures) the moment Gadhafi falls. If he's immortal for 3 or 4 rumored deaths, I'll buy each along the way.

At least until this stops working.

Follow @Centrifugal to fade trades in real time

Total Position: Currently 1.27-1 net-short, 82% invested

Currently Long (according to size): ARUN (8.2%), DBO-Oil ETF (8%); OXY (8%); APKT (5.3%); LULU (5.2%); OTEX (5.1%)

Currently Short: Russell 2000 index via long-TWM, 15%; AAPL (reloaded today, 15%); FDX (reloaded friday 7.9%); DISH (reloaded friday, 5%)
...currently weighting TWM at 1.5 x's instead of 2 x's on net-long calculation.

Futures: no current position (in and out of May crude oil long, for several weeks now).

Updated Position (more cowbell)

What's clear to me is - well, nothing is clear to me, but what I suspect is inflating the market in a virtual straight line still, is indicating tomorrow's prices (prices for everything!) will be much higher than currently considered.

Did that make sense? It doesn't matter.

Now, this doesn't mean you'll be able to sell your DJIA for any greater #shares of groceries in the future. The market could double in the next two years and you're eating from the same recycled bag. If you hold cash though, my conservative friend, you will eat cake instead.

Widows and orphans, fixed-income fossils...beware.

Ben Bernanke is pleased. He's running the biggest experiment in the history of economics and pleased about the lack of inflationary pressures. In fact, pleased came up often in his transcript today. Here was the most notable sample...

I am pleased to report, the release of tigers into the streets has been a significant factor in reducing the population of rats.

That's right, Ben is a man among nerds and rats are in shorter supply, thanks to Ben. The solution to the problem was easy. Never mind the paws ... Release more tigers!

If I appear bitter, well that's just my veneer. Underneath I'm warm and cozy. If all I need to do to make money is shut-up and buy, my job is one-way easy.

My last short covered was VMC after today's open. They missed badly on EPS and stunk it up then with guidance. If I'd have held that home run I would have been thrown-out trying to get to second (back to the dugout sucker!). LVS tonight has missed revenues and won't even take out the week's low. Yes, there are debacles here and there still (CSTR tonight). But more and more lately, a guy holding shorts is having trouble getting around first base safely, and he's risking his very TA to get there (that one would have left a mark on a few).

As I need to hedge going forward (and tomorrow's jobs report is the next potential catalyst), I will be jumping on the indexes, but not individual shorts (1-3 day infrequent trades aside).

Until Mr. and Mrs. Phil Bernanke's son can spell egg on his face, I'm done with individual shorts.

Follow Centrifugal to fade trades in real time

Total Position: Currently 100% net-long, 62% invested

Currently Long (according to size): WLT (reloaded today, 14.9%); CRM (reduced yesterday, 13.9%); APKT (reloaded today, 10.3%); BTU (added today, 10%); ASYS (reloaded today, 7.7%); CENX (4.9%)

Currently Short: no current position

Futures: no current position

Pray the Well - Prey the Weak (go-to list of shorts)

While the Dow managed new highs Friday, the rest of the market is on its heels; smaller-cap stocks in particular.

Not so enchanting a divergence if you are long of stocks.

I'm much smaller now (as planned in my previous post) and in particularly good spirits today. Not only did I succeed in getting out of the market's way, I've begun now planning for my South American bloodlust hunt-and-grunt adventure get-away.

I've got to get my action somewhere.

It is not for me to say the bull market in stocks is ending. I could proclaim a dramatic downside call here and look to highlight my worth once it (finally) hits, but why cement myself an idiot? This is the 3rd and historically best year of the Presidential Cycle, and if inflation will continue to rise for months and months to come, then stocks are likely undervalued still (fixed-income folks ought to watch equities here, now that they've stopped rising in straight-up action for the first time in months. If stocks are in the midst of a simple, healthy correction and ultimately burn to higher and higher highs, it becomes rather clear where inflation and subsequent fixed-income purchasing power are headed. Buying stocks in that environment would become defensive, odd as that may seem).

These remain unprecedented times. Gigantic fiscal experiments from the world's largest economy and the ultimate outcomes are difficult, if not impossible to predict. Anyone calling for a bear market right now is either a gambler, an attention whore, a stupid fool, or all the above. Don't pay any attention to anyone right now who knows what is going to happen. Ignore subjective humans; some of whom have agendas they are not even aware of, since their own sub-conscious drivers commonly ignite their folly (something they fail to predict).

The markets are the best economist you've got. Imperfect predictors as they may be.

Having barked all that out (Bah!), I'm not jumping up and down bullish anymore either. New-woot highs in the DJIA, coincident to a leadership pummel, is not the kind of divergence I want to soak my feet long in. Unless and until the larger, upward trends are broken, I'm not keen on shorting aggressively, or proclaiming squat. This then is the right time to take it easy some and allow the market picture to paint itself. The peanut gallery is for pathetic artists and followers only.

What I will contribute though, is an objective hit-list of what are now the weakest industry groups (and the not-too-pathetically-thin corresponding stocks). The screen is compiled from the lower-ranked relative-strength (RS) groups, which are performing weakest on the year so far (YTD).

This is not a list of the year's worst-performing groups so far, since shorting the more leadership groups which have already been hit is a risky affair (those beasts have sharp teeth). Rather, these are the worst groups YTD - which are lowest-ranked (the worst or the worst). They may not be as exciting, but they are the weaker animals and in that regard the safest (to attempt) to kill. The YTD performance of the major indices are shown at the bottom. All of these are well off their highs now, but the Russell-2000 in particular, has painted itself red.

As always, shop this list at your own risk. It is a working list only - a go-to kill-list for when I'm in a pinch. It's compiled for myself and you can make of it (or fade from it) what you want. You're (still) on your own. Follow Centrifugal to fade (my) trades in real time.

Worst Performing + Low-Ranked Industry Groups thus far in 2011 (from O'Neil's 197 ranked groups, as of Friday's close):

1. Bldg-Cement/Concrt/Ag -7.75% (CADC*, TXI*, EXP*, MLM, VMC, CX, CRH)
2. Leisure-Toys/Games/Hobby -7.5% (MCZ, OMEX, LF, RCRC*, JAKK*, HAS, MAT)
3. Consumer Svcs-Education -6.5% (LINC*, CAST*, COCO, UTI*, APEI*, LOPE*, BPI*, LRN*, CPLA*, STRA*, COCO, ESI, EDMC*, DV, EDU*, APOL)
4. Tobacco -5.83% (BTI, AOI, CIGX, UVV*, VGR*, LO, RAI, MO, PM)
5. Retail-Discount&Variety -5.58% (NDN, BIG, FDO, DLTR, DG)
6. Retail-Consumer Electronic -4.8% (RSH, BBY, GME, CONN*, HGG)
7. Steel-Producers -4.5% (AKS, CHOP*, CPSL, GSI*,
8. Retail/Whlsle-Auto Parts -4.38% (AZO, GPC, ORLY, AAP, CPRT, MNRO, PBY, LKQX)
9. Wholesale-Food -4.35% (UNFI*, GMCR, SYY)
10. Beverages-Alcoholic -4.18% (HOOK*, BORN, SAM*, CEDC, STZ, DEO, BUD, ABV)
11. Banks-Foreign -4.08% (IRE, GGAL*, BFR*, BMA*, NBG, BAP*, CIB, SAN*, KB*, HDB*, IBN, RBS, BSBR, NABZY*, BBD, ITUB, BNPQY*)
12. Retail-Super/Mini Mkts -3.38% (TA*, QKLS*, WINN, PTRY*, SVU, CASY*, RDK*, TFM**, SWY, WFMI, CBD, KR)
13. Bldg-AC & Heating Prds -3.08% (FIX*, AOS*, WSO*, LII*)
14. Food-Dairy Products -2.83% (ADY*, DF, WBD, DANOY*)
15. Food-Packaged -2.58% (SMBL*, BGS*, THS*, FLO*, RAH*, SJM,

Notable (dropping rapidly in Relative Strength):
- Auto/Truck-Tires & Misc -4.24% (TWI, CTB, GT)
- Retail-Mail Order Direct -3.14% (WTV, HSNI, LINTA)
- Retail-Leisure Prod -2.13% (BGP, HIBB*, BKS, POOL*, CAB*, DKS)
- Transportation-Truck -2.02% (YRCW, QLTI*, ABFS*, HTLD*, KNX, WERN, ODFL*, CNW, SWFT, LSTR*, JBHT)

-Russell 2000: -1.3%
-NASDAQ Composite: +1.4%
-NYSE Composite: +1.8%
-S&P 500: +2.0%
-NASDAQ-100 (NDX): +2.3%
-Dow Jones Industrial: +2.5%

* Thin
** IPO