We've lifted a good 200 pts off the lows now. The volatility is insane! I have cut my largest positions back to a more manageable size and put on a hedge. I still remain net short- 10 shorts, 2 longs (added one this morning) and a hedge which will come off by day's end.
UPDATE: Make that 300 pts. Unreal! Back to flat on the day. I took off my hedge too early (for a nice profit) and covered a couple other things. Still net short, but to a lesser degree. Stops are in place. Today could have gone better for me as too many profits have been returned to the market gods- like yesterday. But I'm up. A bounce would be just fine with me. Let's all just calm down a bit.
UPDATE II: 400 pts now. I'm gone. Basically flat. Not pleased with today's P/L considering where I was this morning but I'm still up (some). Now that I'm off the train tracks I hope we rally 500 pts from here. Go Bulls! Sometimes the hardest thing to do is admit when you are wrong and at least for this very moment it's wrong to be short just about anything. Hopefully we rally big thereby offering better entry points from which I can further emasculate these bulls.
Off to the beach. Have a nice day.
Wednesday, January 23, 2008
Now What?
We've tested the lows- trading just now to 11,644 on the DOW. The dip buyers are out, calling a bottom I'm sure. I want to get out of the way but I love my positions and I've decided to sit tight.
Only thing I did was to take off my long position in REW which is a 2x short technology ETF (up 16% this week). Considered covering my DECK short- seeing as it's down $16 today- but I think it's a trend line break and likely to trade much lower eventually. See if I can stick with it.
Bulls better hope these lows hold.
Only thing I did was to take off my long position in REW which is a 2x short technology ETF (up 16% this week). Considered covering my DECK short- seeing as it's down $16 today- but I think it's a trend line break and likely to trade much lower eventually. See if I can stick with it.
Bulls better hope these lows hold.
Goddamn It...
...I hate this fucking stock. I short it and it goes against me. I cover and it reverses.
BXP- one day you will break support and I will be waiting. It might actually be done bouncing higher here but I'm a little bit gun shy considering my recent experience.
Courage in the Face of Uncertainty
I could probably count on one hand the number of times I've been as lopsidedly short as I am right now. After the action yesterday morning (potentially a key reversal), to stand in there in the afternoon and be a major seller was perhaps one of the ballsiest moves I've ever made. Sure I was uncertain (even taking down some exposure into the close out of fear) but I stuck to what has been working. Stuck to my discipline.
Now, I intend to be paid for my foresight.
Must say- I've talked a lot about the potential for the "shorting opportunity of a lifetime" and (not looking at the indexes but just individual issues) I'd have to say it is more or less right here right now. Technically yesterday afternoon, and I nailed it.
Now, I intend to be paid for my foresight.
Must say- I've talked a lot about the potential for the "shorting opportunity of a lifetime" and (not looking at the indexes but just individual issues) I'd have to say it is more or less right here right now. Technically yesterday afternoon, and I nailed it.
Tuesday, January 22, 2008
Whiplash!
Well we opened today as the futures indicated- down about 460 pts five minutes after the bell. How much worse would it have been without the panic 75 Bps emergency inter-meeting Fed cut? Anyway, from the lows we then proceeded to rally 430 pts- virtually in a straight line- erasing most of the losses.
As a bear this is a gift. Not only does the market now present you with better entry points but in the process Bernanke used some heavy artillery. That shady bearded bastard only has so much ammunition. Now the inter-meeting cut is out of the way. We know the addict will get even more crack when they meet next week.
Today the dip buyers were out in full force in the belief that we have been saved by the Fed. Oh and the "second half is going to be really great." I tend to disagree. We are in the early innings of this unwinding. There is a whole closet full of shoes waiting to drop.
I sucked today. Really did. First bad day of the new year. I KNEW LAST NIGHT EXACTLY WHAT WOULD HAPPEN and still botched it somehow. Didn't cover (as I intended to) my shorts into the weakness this morning. Looking a gift horse in the eye. My broker's website (those dirty hatfuckers) CRASHED (which I actually had considered also ahead of time) and was down for two hours as the market shot straight up. After that I generated a bunch of commissions as I had no idea what the fuck I was doing- changing my mind every 10 minutes.
Bottom line. Once I settled down and ran through the charts on my watchlist I saw a bunch of appealing opportunities on the short side. Started selling and by the time I stopped had an awful lot of exposure- risk. Problem is, I could see the DOW rallying a good 500 points higher from here. Scary. Perhaps ill-advised. I'm willing to risk it because I feel it's the disciplined move to make. I have been successful by making low risk trades and cutting my losers. The charts I see are beautiful. There are a bunch of near-perfect set-ups. If I'm wrong I'm gone.
Either I am wrong- in which case I go flat-ish into the Fed meeting securing a great month based on what I did early on. Or I'm right and win big. I should know real soon.
AAPL disappointment should help.
As a bear this is a gift. Not only does the market now present you with better entry points but in the process Bernanke used some heavy artillery. That shady bearded bastard only has so much ammunition. Now the inter-meeting cut is out of the way. We know the addict will get even more crack when they meet next week.
Today the dip buyers were out in full force in the belief that we have been saved by the Fed. Oh and the "second half is going to be really great." I tend to disagree. We are in the early innings of this unwinding. There is a whole closet full of shoes waiting to drop.
I sucked today. Really did. First bad day of the new year. I KNEW LAST NIGHT EXACTLY WHAT WOULD HAPPEN and still botched it somehow. Didn't cover (as I intended to) my shorts into the weakness this morning. Looking a gift horse in the eye. My broker's website (those dirty hatfuckers) CRASHED (which I actually had considered also ahead of time) and was down for two hours as the market shot straight up. After that I generated a bunch of commissions as I had no idea what the fuck I was doing- changing my mind every 10 minutes.
Bottom line. Once I settled down and ran through the charts on my watchlist I saw a bunch of appealing opportunities on the short side. Started selling and by the time I stopped had an awful lot of exposure- risk. Problem is, I could see the DOW rallying a good 500 points higher from here. Scary. Perhaps ill-advised. I'm willing to risk it because I feel it's the disciplined move to make. I have been successful by making low risk trades and cutting my losers. The charts I see are beautiful. There are a bunch of near-perfect set-ups. If I'm wrong I'm gone.
Either I am wrong- in which case I go flat-ish into the Fed meeting securing a great month based on what I did early on. Or I'm right and win big. I should know real soon.
AAPL disappointment should help.
Dislocation!
Today is going to be nuts. DOW futures down 500 overnight, S&P futures down 60. Bernanke cuts 75 Bps in an attempt to delay the inevitable. Paulson out banging the table on a stimulus plan.
Usually avoid watching CNBS but I couldn't resist this morning. Funny shit- I really think Jim Cramer's head might spin right off his shoulders. Gotta get back to work. Much much more to say on all this later. Good luck out there.
Usually avoid watching CNBS but I couldn't resist this morning. Funny shit- I really think Jim Cramer's head might spin right off his shoulders. Gotta get back to work. Much much more to say on all this later. Good luck out there.
Saturday, January 19, 2008
What Did I Say?
I love it when a plan comes together.
At it's worst levels on Friday YHOO was down 15% or so for the week.
Earnings: Pain In My Ass
Saturday morning of a three day weekend and I'm at the computer trying to read the tea leaves. Going through earnings reports for next week and damn there is a TON of them. No less than 33 companies I follow report on Tuesday. I'll be spending a good long time going through the week's list. This exercise isn't going to make me any money. The idea is to keep from getting blown-up unexpectedly.
Funny. Friday afternoon (after the close) I'm in the shower and I think to myself- "you know I probably should be doing my earnings (to report) list on Friday because if an issue held reports on a Monday morning I'm screwed." Sure enough. I go through this excruciatingly long list of reports for Tuesday and get all the way to the U's and there it is, the one that's going to get me- UAUA. That thing will move 10% in the blink of an eye. Truly it's a beast. My 200 share short position could impair me to the tune of a G-note, no problem. Nice. Vegas style. Have that to look forward to when we return on Tuesday.
Funny. Friday afternoon (after the close) I'm in the shower and I think to myself- "you know I probably should be doing my earnings (to report) list on Friday because if an issue held reports on a Monday morning I'm screwed." Sure enough. I go through this excruciatingly long list of reports for Tuesday and get all the way to the U's and there it is, the one that's going to get me- UAUA. That thing will move 10% in the blink of an eye. Truly it's a beast. My 200 share short position could impair me to the tune of a G-note, no problem. Nice. Vegas style. Have that to look forward to when we return on Tuesday.
Friday, January 18, 2008
Come On Now
Damn it this bounce better hold. We need it to suck in more losers (bulls).
UPDATE: These bulls really suck. Bounce has been completely erased. I managed to find some ideas to take advantage. Maybe I'm not going to get trimmed today after all. (?) Also, watching BXP closely- I know that puppy wants to break.
UPDATE II: Scratch all that nonsense about my first real losing day of the year- just turned green. HAHAHA... Unreal.
UPDATE: These bulls really suck. Bounce has been completely erased. I managed to find some ideas to take advantage. Maybe I'm not going to get trimmed today after all. (?) Also, watching BXP closely- I know that puppy wants to break.
UPDATE II: Scratch all that nonsense about my first real losing day of the year- just turned green. HAHAHA... Unreal.
It's About Time!
This is the first trading day of 2008 that I've had real losses. Sure I think there have been a couple days where I dropped maybe a couple hundred bucks but nothing significant. Losing is never fun but frankly I'm real glad to see a bounce and even if I have to run for cover I hope this bounce continues. It's been getting real hard to find good entry points with the market so oversold. Hopefully the bulls can remain in control for awhile.
The unfortunate part is that it's Friday. I hate losing money on a Friday because I'm a loser all weekend long- and it's a long weekend. I remain modestly green for the week but overall am disappointed in my performance this week. Better believe I bring it next week.
The unfortunate part is that it's Friday. I hate losing money on a Friday because I'm a loser all weekend long- and it's a long weekend. I remain modestly green for the week but overall am disappointed in my performance this week. Better believe I bring it next week.
Last Mention of Missed Opportunities
Covered it yesterday on my way out the door. Down 8% today. Feel my pain. Although I suppose it's less acute than the pain of the longs. HA.
Thursday, January 17, 2008
Shut Up and Take the Money
The market was eviscerated today. No surprise here as it's exactly what I've been looking for. To my dismay I had a solidly profitable day instead of the obscenely profitable day it should have been. Shut up and take the money.
If we bounce? Shut up and take the money. Get out of the way. We are oversold and aren't likely to go straight down. Unless we crash. Ha. Also I'm seeing a lot of broken support and broken trendlines and we could bounce to test the underside of these confirmations.
The VIX broke out which augurs for more downside but I'm not convinced it means anything.
So here we are. I still see a variety of bearish trade ideas but the best (and my favorites) have been missed. Insurance stocks look vulnerable.
One thing that surprised me today was the severity of the sell-off in commodity names. This weekend I noticed ominous looking patterns in steel stocks. Other basic material names looked ripe for a fall as the week went on. I sort of missed the fall in the oil stocks altogether. This again goes to show that when in a bear market there is no where to hide. Oil will come down with slowing demand. Of course the long-term bullish supply/demand story with oil is still intact but over the course of several weeks or months it may not matter.
Friday (tom.) is OP-EX. I just want to survive. Get out of the week intact best I can.
Sitting here tonight at my all-time highs. Best month ever (so far). One quarter of the way to my profit goal FOR THE YEAR. Damn I'm due for a reversal of fortune. Not that I plan to give too much back. I will protect gains. Rest assured -this is my year.
If we bounce? Shut up and take the money. Get out of the way. We are oversold and aren't likely to go straight down. Unless we crash. Ha. Also I'm seeing a lot of broken support and broken trendlines and we could bounce to test the underside of these confirmations.
The VIX broke out which augurs for more downside but I'm not convinced it means anything.
So here we are. I still see a variety of bearish trade ideas but the best (and my favorites) have been missed. Insurance stocks look vulnerable.
One thing that surprised me today was the severity of the sell-off in commodity names. This weekend I noticed ominous looking patterns in steel stocks. Other basic material names looked ripe for a fall as the week went on. I sort of missed the fall in the oil stocks altogether. This again goes to show that when in a bear market there is no where to hide. Oil will come down with slowing demand. Of course the long-term bullish supply/demand story with oil is still intact but over the course of several weeks or months it may not matter.
Friday (tom.) is OP-EX. I just want to survive. Get out of the week intact best I can.
Sitting here tonight at my all-time highs. Best month ever (so far). One quarter of the way to my profit goal FOR THE YEAR. Damn I'm due for a reversal of fortune. Not that I plan to give too much back. I will protect gains. Rest assured -this is my year.
Bulls Win in a Blowout
The Bulls won. 126-96 over the Heat. How can Miami be so awful with DWade?
I think it's fitting my two favorite sports teams are the Bulls and the Bears.
Had fun last night. Perhaps too much. Now back to work.
The downside is that I closed out a bunch of shorts yesterday mid-day simply because I was leaving my office and didn't want so much risk. It was nice not having to worry about it while I was on the road but from a trading perspective it was not my best move. Oh well. Easy come, easy go. To compound the situation I didn't get my homework done last night, woke up late in a fog after sleeping through my alarm and was a deer in the headlights when the market opened today.
It's been a good week but I can't be taking days off. Opportunities were missed as a result. Also closed out some very nice trades that had room to run. That's two days off in two weeks and really it takes me another day to catch up after taking one off.
Yet I did make money yesterday (not near what I could have) and I'm making more money today (despite my aimlessness and general confusion). Breaking the routine is bad. I think I'll recover. It's still the best month I've ever had despite my lapses. I'll have more to say on this later.
Wednesday, January 16, 2008
That Was Quick
Just covered half of my YHOO short down over a buck. Nice-nice. The remaining position is still of significant size as I believe this stock trades much lower in the near future. So why cover half? Simply because when things work so beautifully it's best to take some profits. Besides it was a big position and I tend to get jittery with large positions. Better to cover some on my terms. I'll be travelling and away from my desk this afternoon and don't want to be wondering/worried about whether or not I'm getting run over.
Verge of a Breakdown?
That's my bet on YHOO. I hope to be getting some help from a weak Nasdaq today. By my standards, the bet I've placed here is an aggressive one. Let the games begin.
Tuesday, January 15, 2008
Impending Market Meltdown?
Today was huge. The DOW sold all they way down to the August swing low (12,500). After the close, INTC disappointed and the futures are down to where we would open convincingly below the major swing lows on several indices. This is it folks. Wouldn't be the least bit surprised to see 500 more points come off the DOW. In short order.
Also wouldn't be surprised to see some sort of intervention in an attempt to prop the market up. Bernanke and Paulson are pure evil and they've pulled shady exercises repeatedly.
Barring unforeseen intervention, tomorrow should be a rich day for the bears. But we'll see. I'm anxious with anticipation and I have a lot of skin in the game. I'm certain Wednesday will be very interesting.
Unfortunately (from a trading perspective) my day will be cut short as I will be out of the office @ 2:30 due to travel arrangements. Looking forward to my trip but it will be a hectic day.
Prepared to Pillage
There will be no more rooting for a bounce around here. I am now officially up to my eyeballs in short sales. Still have some longs on my books so I'm not entirely lopsided but I'm solidly net short.
To reflect the considerable opportunity that I believe awaits us directly ahead I have even broken my own rule. I religiously remove substantial profits from my trading account in order to keep from getting too aggressive or unbalanced. Recently I did just that, removing a fat wad of cash. Well, it just went back in. Every penny.
If the opportunity to aggressively attack this market from the short side does in fact present itself I will be ready. Bulls you have been warned. I will burn your huts to the ground. I will rape and pillage. I will slaughter all your livestock and pollute your well.
OK. Maybe I'm premature. We'll soon find out.
I leave you with my best trade of the day: came into today short 200 RCI. Doubled my position after it tasted resistance @ $40.50. Got it @ $40.25, covered 100 @ $38.40 and it trades now @ $38.60.
Churning and Flagging?
Is that all we are doing right here? Starting to feel that way. I have been hoping for a sustained rally but it hasn't happened yet and I feel like the clock is ticking. As a result I'm getting more aggressive on the short side.
Monday, January 14, 2008
Covered...
...the aforementioned BKS short. Could it trade much lower still? Sure. Do I care? No.
Give me some props for this one.
On the Important Matter of Being Wrong
Watching NFX for a breakout. I've been waiting for this one for quite awhile. Added to my (long) position this morning.
As for IBM, well sometimes you're wrong. When that is the case, you close the trade. Period. You don't give it more rope. You don't try to justify it. You don't make it an investment. You close it. Get out. If your thesis is proven wrong you exit.
In today's example I got a bit lucky. IBM traded $107 and change pre-market then has traded down since. I covered at $102 and change. The total hit wasn't too bad considering. I still feel that IBM goes much lower and will revisit the idea shortly.
As for IBM, well sometimes you're wrong. When that is the case, you close the trade. Period. You don't give it more rope. You don't try to justify it. You don't make it an investment. You close it. Get out. If your thesis is proven wrong you exit.
In today's example I got a bit lucky. IBM traded $107 and change pre-market then has traded down since. I covered at $102 and change. The total hit wasn't too bad considering. I still feel that IBM goes much lower and will revisit the idea shortly.
IBM Pulls a Fast One
We are just tipping off earnings season and already I've gotten burned. According to Earnings.com IBM was due to report Thursday after the bell. Well, to my surprise, they announced this morning and I'm getting run over by the strength in the name (which I come into the week short). Not happy.
The upside is that we are looking to bounce again, which I did expect. As a result I will not be looking to initiate new positions into this strength today. Ideally we can carry this bounce through the bulk of this week's trading and I can get more aggressive on the short side towards week's end.
Good luck out there.
The upside is that we are looking to bounce again, which I did expect. As a result I will not be looking to initiate new positions into this strength today. Ideally we can carry this bounce through the bulk of this week's trading and I can get more aggressive on the short side towards week's end.
Good luck out there.
Sunday, January 13, 2008
Weekend Review
This market is mortally wounded. Frankly I'm somewhat surprised we got hammered the way we did on Friday. Obviously, I had been anticipating a more extended bounce. It may still play out that way but, on the other hand, if we take out 12,500 on the DOW it's incredibly ominous.
Speaking of Friday, mine sucked. We dropped 246 pts on the DOW and I was flat on the day. Awful. I have consistently made money on these big downdrafts and feel as if I missed out. To be honest, I have to admit to losing focus last week. Wednesday afternoon I was up 3% for the day when we rallied hard off the 12,500 level -completely erasing those gains. Anticipating follow through on the bounce I took down a lot of my short exposure. For the rest of the week I basically sat on the sidelines instead of putting my cash to work.
Too much defense being played on my part. Time to be a man and claim my stake.
Going forward, we are heading into earnings season. Next week we have economic news in the form of CPI, PPI and jobless claims. A handful of financials report, including C, JPM, MER and WM among others. I'll be watching for IBM, a name I'm currently short, to report on Thursday.
The watchlist is ripe with (primarily short) candidates. As I went through the list this weekend the opportunities were just jumping off the page at me. I expect the upcoming week to be a good one. I'm a terrible trader really but my substantial predictive powers seem to be at their peak.
If I had to guess, I'd say we bounce higher early next week. Should that be a poor guess I will look to get aggressively short on a break of the lows. Hoping for a bounce that sets up the shorting opportunity of a lifetime. Could happen or could just be wishful thinking but I'm relatively certain of the end game.
Speaking of Friday, mine sucked. We dropped 246 pts on the DOW and I was flat on the day. Awful. I have consistently made money on these big downdrafts and feel as if I missed out. To be honest, I have to admit to losing focus last week. Wednesday afternoon I was up 3% for the day when we rallied hard off the 12,500 level -completely erasing those gains. Anticipating follow through on the bounce I took down a lot of my short exposure. For the rest of the week I basically sat on the sidelines instead of putting my cash to work.
Too much defense being played on my part. Time to be a man and claim my stake.
Going forward, we are heading into earnings season. Next week we have economic news in the form of CPI, PPI and jobless claims. A handful of financials report, including C, JPM, MER and WM among others. I'll be watching for IBM, a name I'm currently short, to report on Thursday.
The watchlist is ripe with (primarily short) candidates. As I went through the list this weekend the opportunities were just jumping off the page at me. I expect the upcoming week to be a good one. I'm a terrible trader really but my substantial predictive powers seem to be at their peak.
If I had to guess, I'd say we bounce higher early next week. Should that be a poor guess I will look to get aggressively short on a break of the lows. Hoping for a bounce that sets up the shorting opportunity of a lifetime. Could happen or could just be wishful thinking but I'm relatively certain of the end game.
Thursday, January 10, 2008
These Things Happen
For the most part, my defensive action in the face of yesterday's rally was the right move (everything covered trades higher this morning). The exception? BKS. Must say I was not pleased to see it open down 9%, having covered it. After the big gap lower it traded back up and tested support from below ($32)- which is where I re-entered the trade. That's working nicely but I still missed the bulk of the move (2 pts. on 400 sh.= $800 left on the table).
Wednesday, January 9, 2008
Bears Sacked, Fumble, Bulls Recover
We rallied (on the DOW) from 12,500 to 12,735. In under two hours. Closed up 146 pts. Damn. Now that's the kind of rally I've been expecting. This is it, the big set-up. My expectation (and projecting the indexes is not my game) is that the DOW trades to 13K. Bottom to top- 500 pts. Point is: we go higher.
It doesn't really make much difference to me how high it trades. I got out of the way. To be specific, I was 3%+ (for the second day in a row) this afternoon when the rally began. Two hours later I had given every single cent back. As bad a taste as that leaves, the important thing is that I gave back TODAY'S profit not yesterday's profit or last year's profit. Really should have went long an index right away to hedge but did not do so.
Still expect that my account will be under attack just because I have a bearish bias, but I have no intention of standing on the train tracks net short just to get ran over. Just because I'm stubborn or something. Nope. I closed my beloved, recently doubled down BKS position (and a bunch of other shorts). My broker makes a bunch of money off of me and I should get better service.
The idea is flexibility. Especially on the short side where I'm quicker to take a profit. The longer you sit there telling yourself you're right while losing money the bigger the mistake becomes. When you go to cash you can think clearly. Maybe you were rightly positioned to begin with, in which case you can always re-enter.
Those who do not have the possibility (inevitability) of being wrong built in to their plan are losers.
I've been a loser before. It sucks.
My emotion is indignation. Don't fuck with me Mister Market. I'm keeping my profits.
Today the enemy brought significant reinforcements to a battle I was winning convincingly. My portfolio is a small force of like 50 insurgents, half of which have guns, mostly small sidearms. The shoes on our feet are worn through or made of leather. Our uniforms are disheveled and we're sleeping bivouacked in the mountains. We run when overwhelmed because we want to live to fight another day. Not die in a last stand.
Tonight I've got a ton of cash. Net long. Within a sneeze of my best month ever. Time to trim the account and pay myself a bonus. No time for a vacation though, I'm plotting my next attack.
It doesn't really make much difference to me how high it trades. I got out of the way. To be specific, I was 3%+ (for the second day in a row) this afternoon when the rally began. Two hours later I had given every single cent back. As bad a taste as that leaves, the important thing is that I gave back TODAY'S profit not yesterday's profit or last year's profit. Really should have went long an index right away to hedge but did not do so.
Still expect that my account will be under attack just because I have a bearish bias, but I have no intention of standing on the train tracks net short just to get ran over. Just because I'm stubborn or something. Nope. I closed my beloved, recently doubled down BKS position (and a bunch of other shorts). My broker makes a bunch of money off of me and I should get better service.
The idea is flexibility. Especially on the short side where I'm quicker to take a profit. The longer you sit there telling yourself you're right while losing money the bigger the mistake becomes. When you go to cash you can think clearly. Maybe you were rightly positioned to begin with, in which case you can always re-enter.
Those who do not have the possibility (inevitability) of being wrong built in to their plan are losers.
I've been a loser before. It sucks.
My emotion is indignation. Don't fuck with me Mister Market. I'm keeping my profits.
Today the enemy brought significant reinforcements to a battle I was winning convincingly. My portfolio is a small force of like 50 insurgents, half of which have guns, mostly small sidearms. The shoes on our feet are worn through or made of leather. Our uniforms are disheveled and we're sleeping bivouacked in the mountains. We run when overwhelmed because we want to live to fight another day. Not die in a last stand.
Tonight I've got a ton of cash. Net long. Within a sneeze of my best month ever. Time to trim the account and pay myself a bonus. No time for a vacation though, I'm plotting my next attack.
One Idea a Long Time in Coming
Here is one I'm watching: BKS.
In a recession who the hell is going to be spending money on books?
Whatever. The fundamental analysis is totally inconsequential to me. What I see here is a ton of support just below where this issue is currently trading. I'm anticipating a breakdown. Along those lines I just doubled my short position (one which is already nicely profitable).
To be clear, should support hold I'll be long gone. In the meantime I'm willing to risk the profits I already have on an idea I've been waiting a long time to develop.
In a recession who the hell is going to be spending money on books?
Whatever. The fundamental analysis is totally inconsequential to me. What I see here is a ton of support just below where this issue is currently trading. I'm anticipating a breakdown. Along those lines I just doubled my short position (one which is already nicely profitable).
To be clear, should support hold I'll be long gone. In the meantime I'm willing to risk the profits I already have on an idea I've been waiting a long time to develop.
Late Christmas Present
The day after Christmas I shorted ATI @ $88.98.
Covered it this morning @ $73.98.
That's 15 points in 10 trading sessions! Whether it trades lower from here (likely) or not is now irrelevant to me. I have declared victory.
Early Mornin' Stoned Pimp
Net short. Market averages higher across the board (up a hundy at one point as measured by the DOW). Yet I'm up again. Odd, no?
Believe it or not my longs are doing the heavy lifting today. GENZ is breaking out- as I said it would. My small RAI position is up 3% and the metals are looking to turn positive after spending the morning in the red.
My shorts are also contributing despite the green hue. YHOO which I aggressively shorted within a half hour of claiming to respect the bounce (as I said here yesterday) is down another 3%. YHOO is making new lows and remains on borrowed time as far as I'm concerned.
My expectation is for a choppy market here as the bears become increasing emboldened and the bulls try harder to deny reality (recession, bear market). Additionally earnings season is just kicking off and the market will react to the vagaries of earnings season. No time to be a hero. Took down a few insanely profitable shorts just to bank some profits and remain flexible.
If I were to be a hero, which I already stated will not be the case, I would short the living hell out of the dog they call YHOO.
Believe it or not my longs are doing the heavy lifting today. GENZ is breaking out- as I said it would. My small RAI position is up 3% and the metals are looking to turn positive after spending the morning in the red.
My shorts are also contributing despite the green hue. YHOO which I aggressively shorted within a half hour of claiming to respect the bounce (as I said here yesterday) is down another 3%. YHOO is making new lows and remains on borrowed time as far as I'm concerned.
My expectation is for a choppy market here as the bears become increasing emboldened and the bulls try harder to deny reality (recession, bear market). Additionally earnings season is just kicking off and the market will react to the vagaries of earnings season. No time to be a hero. Took down a few insanely profitable shorts just to bank some profits and remain flexible.
If I were to be a hero, which I already stated will not be the case, I would short the living hell out of the dog they call YHOO.
Tuesday, January 8, 2008
'Subprime' Named Word of the Year
Forgot to mention yesterday that linguists as represented by the American Dialect Society have named 'subprime' as the word of the year for 2007. Link.
In 2008 the word of the year will be 'litigation'. Ha.
Runner-Up: 'change'. But we hear that every four years.
In 2008 the word of the year will be 'litigation'. Ha.
Runner-Up: 'change'. But we hear that every four years.
Welcome to Your 2008 Bear Market
So much for the bounce. That lasted all of a day and a half before the bulls were utterly annihilated.
It's safe to assume that every index has broken convincingly through key support. Welcome to your 2008 bear market. For anyone not paying attention, we are already in a recession. Not technically, but if you were to use real inflation numbers instead of the government's bullshit numbers we have been in a recession for awhile now.
Ofcourse, having made so much so fast on the short side I'm wracked with anxiety. The bounce I allowed for off of the lows can now be expected to take place from a lower level. My expectation is that at some point probably soon we will test the key support levels from below. A failure at that point (should it play out that way) could present the shorting opportunity of a lifetime. No exaggeration.
My advice to you (again). Take cover.
It's safe to assume that every index has broken convincingly through key support. Welcome to your 2008 bear market. For anyone not paying attention, we are already in a recession. Not technically, but if you were to use real inflation numbers instead of the government's bullshit numbers we have been in a recession for awhile now.
Ofcourse, having made so much so fast on the short side I'm wracked with anxiety. The bounce I allowed for off of the lows can now be expected to take place from a lower level. My expectation is that at some point probably soon we will test the key support levels from below. A failure at that point (should it play out that way) could present the shorting opportunity of a lifetime. No exaggeration.
My advice to you (again). Take cover.
Treading Water
Not afraid of this bounce (nor a believer in it) but I'm going to respect it. I have exited a couple short positions just to be safe. Frankly, this bounce seems weak but these are key levels we are flirting with and there is nothing more dangerous than a wounded bull. Live to fight another day. I've had an incredible run and don't plan on giving anything back.
Today is another profitable day (thus far). Closed out my CROX position this morning at $28 and change. Somewhat disappointed initially as it had traded lower but now with it bouncing back over $30, well, I'm OK with it. I'd like to short that dog again but have other ideas more appealing for now. Hope to revisit it.
There are opportunities to be had now. However I will play it a bit safe. I'm not going into bunker mentality as in December after a fast start but I will operate primarily to preserve profits in the short run. If January does not continue my winning streak I will have done something drastically wrong.
Today is another profitable day (thus far). Closed out my CROX position this morning at $28 and change. Somewhat disappointed initially as it had traded lower but now with it bouncing back over $30, well, I'm OK with it. I'd like to short that dog again but have other ideas more appealing for now. Hope to revisit it.
There are opportunities to be had now. However I will play it a bit safe. I'm not going into bunker mentality as in December after a fast start but I will operate primarily to preserve profits in the short run. If January does not continue my winning streak I will have done something drastically wrong.
Countrywide on Thin Ice
Apparently CFC was halted shortly after 1pm est so they could deny rumors of impending bankruptcy.
A Short I Should Have Stuck with Longer
CFC is down almost 18% today and now has a six handle. Ouch. Pull up a chart of that one.
Under Attack
Big picture: we are literally perched on the precipice. This market has no margin for error here. A couple bad news items and we are going over the edge. With earnings season coming up we'll have no lack of news. The outlook for the upcoming year will be what market participants are listening for. How good can the outlook really be?
In the meantime this is the bulls last chance to turn this thing around. We are now bouncing for the second day in a row. Today is a bit more convincing than yesterday.
I am net short again. Haven't done much this morning other than give some profits back. I've trimmed a bit but I'm trying to hang in there. Although if this market is going higher short term I will be forced to take cover. Hesitating to do so is a mistake I cannot afford. The profits I've made are mine and I will not give them back.
Let's see what the bulls can muster.
In the meantime this is the bulls last chance to turn this thing around. We are now bouncing for the second day in a row. Today is a bit more convincing than yesterday.
I am net short again. Haven't done much this morning other than give some profits back. I've trimmed a bit but I'm trying to hang in there. Although if this market is going higher short term I will be forced to take cover. Hesitating to do so is a mistake I cannot afford. The profits I've made are mine and I will not give them back.
Let's see what the bulls can muster.
Monday, January 7, 2008
Damn Those Shoes Are UGLY
Sticking with my CROX short despite the fact it closed down a hefty five bucks on Friday has worked out pretty good. I covered half of my smallish position this morning at $30/share- for a profit of ten plus points. The other half has traded as low as $27 and change this morning. At the lowest point down another five bucks on the day. It has bounced some since. At this point a bounce would be nice. Thereby allowing me too short this dog again.
The market as a whole opened strong this morning- and I was up. The market coughed up it's gains- and I was up even more. Really hoping for a bounce since I'm now underexposed to the short side but I do have dry powder.
The market as a whole opened strong this morning- and I was up. The market coughed up it's gains- and I was up even more. Really hoping for a bounce since I'm now underexposed to the short side but I do have dry powder.
Sunday, January 6, 2008
Longest Watchlist Ever
My watchlist for this week is 264 stocks. Jeez. That's a lot. If there are opportunities to be found I'm going to dig them up.
Going through the master list I noticed many opportunities missed owed to the fact that I didn't quite have enough capital to short 150 different stocks. That's alright. There are new opportunities every week and I will get mine.
Overall I'm pleased to see many opportunities still exist here and now. Just not near as many as before the mauling of last week. Still plenty of names yet to break support.
One to watch? YHOO. Looking for this perennial dog to take out support so I can get involved with an old name which has been good to me in the past.
Tech generally has just started to work on the short side. Many tech names are just now breaking down as the market realizes the idea that you can hide out in tech during a recession is pure fantasy.
Going through the master list I noticed many opportunities missed owed to the fact that I didn't quite have enough capital to short 150 different stocks. That's alright. There are new opportunities every week and I will get mine.
Overall I'm pleased to see many opportunities still exist here and now. Just not near as many as before the mauling of last week. Still plenty of names yet to break support.
One to watch? YHOO. Looking for this perennial dog to take out support so I can get involved with an old name which has been good to me in the past.
Tech generally has just started to work on the short side. Many tech names are just now breaking down as the market realizes the idea that you can hide out in tech during a recession is pure fantasy.
Late Night Musings
To quickly recap Friday: the bulls got mauled.
As a bear I'm figuring that the eventual bounce will be extremely violent in nature. Worthwhile to keep that in mind to prevent yourself from getting too aggressive on the short side. Ultimately this market is headed lower. No surprise on my part.
The first three days of 08 have almost been too good to me. Huh? Well I have that sinking feeling that I'm about to be severely corrected. Call it a conditioned response. Make a bunch and give a bunch back. Growing in fits and starts is my trading history. But I've had the sinking nervous feeling over and over for months yet have not crashed.
Halfway through my weekend homework I see fewer opportunities than in previous weeks. Serious damage has been done and many names no longer offer favorable entry points. Naturally every idea I didn't play last week worked beautifully. Fully invested there was not much I could do to initiate new positions. Close something just to move it to something else is a matter of getting too cute.
Profits have been booked. Capital has been raised.
Again I left money on the table by downsizing my commercial real estate shorts modestly towards the end of last week. It's instructive to point out mistakes and such as the purpose of this blog is to continue to grow as a trader.
Back to work. Carry on.
NOTE: CROX closed Friday down five bucks.
As a bear I'm figuring that the eventual bounce will be extremely violent in nature. Worthwhile to keep that in mind to prevent yourself from getting too aggressive on the short side. Ultimately this market is headed lower. No surprise on my part.
The first three days of 08 have almost been too good to me. Huh? Well I have that sinking feeling that I'm about to be severely corrected. Call it a conditioned response. Make a bunch and give a bunch back. Growing in fits and starts is my trading history. But I've had the sinking nervous feeling over and over for months yet have not crashed.
Halfway through my weekend homework I see fewer opportunities than in previous weeks. Serious damage has been done and many names no longer offer favorable entry points. Naturally every idea I didn't play last week worked beautifully. Fully invested there was not much I could do to initiate new positions. Close something just to move it to something else is a matter of getting too cute.
Profits have been booked. Capital has been raised.
Again I left money on the table by downsizing my commercial real estate shorts modestly towards the end of last week. It's instructive to point out mistakes and such as the purpose of this blog is to continue to grow as a trader.
Back to work. Carry on.
NOTE: CROX closed Friday down five bucks.
Friday, January 4, 2008
Just for the Record
I'm short CROX...and loving it. They make what have to be considered some of the ugliest shoes ever made. I'm clearing out some positions but not this one.
Whew!
What a week it's been. I stayed hot. Matter of fact today is my third big up day in a row. One hell of a way to start this new year. Coming in short I must say it's been rather enjoyable watching the market get killed all week.
So after a great run I will continue to take down risk as I've done all week. Raising some fresh powder and banking some profits. Killing all the men and burning the villages as I fall back into the mountains.
I've taken down two short positions, now three, entirely and also covered some of my CCL short which has worked so well so quickly. I suspect after crashing through this last bit of support that it has much farther to fall. Still positioned to benefit with my remaining position but I'd like to think that I'll get another shot to get bigger in the name.
Having covered all these shorts I find myself surprisingly net long. Net long? Barely. Gold and silver are getting beat on today but I have fresh powder should I decide to buy more next week. Additionally, GENZ is looking pretty sharp and could be breaking out to new all time highs soon.
No need to get greedy or be a hero. I have initiated almost no new positions this week while focused on raising cash. Don't plan to do much this afternoon. The market can go ahead and close now as far as I'm concerned. I'll enjoy my weekend and come into next week with fresh powder and a fresh perspective.
So after a great run I will continue to take down risk as I've done all week. Raising some fresh powder and banking some profits. Killing all the men and burning the villages as I fall back into the mountains.
I've taken down two short positions, now three, entirely and also covered some of my CCL short which has worked so well so quickly. I suspect after crashing through this last bit of support that it has much farther to fall. Still positioned to benefit with my remaining position but I'd like to think that I'll get another shot to get bigger in the name.
Having covered all these shorts I find myself surprisingly net long. Net long? Barely. Gold and silver are getting beat on today but I have fresh powder should I decide to buy more next week. Additionally, GENZ is looking pretty sharp and could be breaking out to new all time highs soon.
No need to get greedy or be a hero. I have initiated almost no new positions this week while focused on raising cash. Don't plan to do much this afternoon. The market can go ahead and close now as far as I'm concerned. I'll enjoy my weekend and come into next week with fresh powder and a fresh perspective.
Thursday, January 3, 2008
These Things Happen
So literally five trading sessions ago I placed a trade with my broker. The order, to short 100 shares of NILE at the market just after it had tickled $75/share, did not fill as my broker did not have the shares available to borrow. I did nothing further and haven't revisited the idea. I might need more than one broker.
Position Closed, For Now
Covered SLG short just now @ $90. Taking precautions ahead of employment report Friday in the likelihood that the market could swing a couple hundred points in either direction on the back of that report.
Ninety bucks looks like the last remaining support for SLG between here and sixty. Wouldn't be surprised to see it attempt to hold these levels in the short run. Ultimately this dog is going lower and I'm not done chaining it to a tree and beating it with a stick but having made seven points in six days I'll play it safe and bank some profits.
Ninety bucks looks like the last remaining support for SLG between here and sixty. Wouldn't be surprised to see it attempt to hold these levels in the short run. Ultimately this dog is going lower and I'm not done chaining it to a tree and beating it with a stick but having made seven points in six days I'll play it safe and bank some profits.
Easy Money for the Patient Among Us
This is the sort of long term consolidation pattern that eventually leads to significant gains. Observe the resistance at the $52.50-55 level and how long it has taken to surmount that level (it sits close to $55 right now).This particular pattern, in NFX, looks to be very close to resolving itself to the upside. I doubled my long position this morning. The only problem for me with a pattern like this is the length of time it takes to resolve. I want to trade patterns that work now, not eventually. In this case there will be some waiting involved which is the only factor keeping me from buying hand over fist.
Expect that once resistance is cleared this stock will rocket higher save for a potential retest of that key level from above which will, if it happens, create an even better buying opportunity.
Wednesday, January 2, 2008
Killing It
Picking up right where I left off. Closed out a non-preforming short in NIHD and covered PAYX for a fat profit. Raised some cash and put it right to work. Bought SLV and quadrupled my CCL short. We'll see if it works this time.
Funny. As a younger trader I would get very excited on a big up day like today. Now I get nervous and anxious. Rest assured- this is my year.
Funny. As a younger trader I would get very excited on a big up day like today. Now I get nervous and anxious. Rest assured- this is my year.
Frustration
Entering 08 with little dry powder leaves me scrambling to find some already. I want to buy gold and especially silver hand over fist. Silver has not yet broken out so I'm anticipating the move somewhat. It's a risk I'm willing to take considering the potential reward.
Also I'm looking to tangle with CCL again (I have a smallish position already). I've been on the wrong side of this name several times in the last year but I still want to sell the shit out of it under $44. Which is about where it sits right now.
Also I'm looking to tangle with CCL again (I have a smallish position already). I've been on the wrong side of this name several times in the last year but I still want to sell the shit out of it under $44. Which is about where it sits right now.
In Case You Hadn't Noticed...
...you want to remain long oil and gold. Keep an eye on silver for the impending breakout. Catching the break could be quite lucrative.
Tuesday, January 1, 2008
Back to Work
Welcome to the new year folks. Tomorrow marks the first trading day of the year. I go in net short. The markets seem to be coiling up here and there will be a decisive break sometime early in 08. Considering the backdrop the break should be lower but that's not the business of the day.
Short term we get Fed minutes on Wednesday and then it's employment report Friday. Not too concerned about the short term market action and will look for opportunities in individual names long and short. The watchlist has mostly short candidates but my favorite ideas are balanced between the two.
The plan is to remain somewhat defensive. Not looking to give back last year's profits. I'm heavily committed now but ideally can scale back to accrue some fresh powder. 08 will provide numerous opportunities and there is no reason to press my bets in January. As always I will "stay in the game".
My current analogy for trading is guerrilla warfare. The idea is to attack the market where it is most vulnerable and to risk as little as possible.
Short term we get Fed minutes on Wednesday and then it's employment report Friday. Not too concerned about the short term market action and will look for opportunities in individual names long and short. The watchlist has mostly short candidates but my favorite ideas are balanced between the two.
The plan is to remain somewhat defensive. Not looking to give back last year's profits. I'm heavily committed now but ideally can scale back to accrue some fresh powder. 08 will provide numerous opportunities and there is no reason to press my bets in January. As always I will "stay in the game".
My current analogy for trading is guerrilla warfare. The idea is to attack the market where it is most vulnerable and to risk as little as possible.
46%
It's official. Another year in the books. My trading account had a whopping, ridiculous, outsized total return of 46% in a year when the broader market as represented by the DOW was up a measly 6.5%. A sideways market with increasing volatility as the year went on.
To be blunt my performance was nothing short of spectacular. It really is that simple. I'm one college dropout that should be trading for Soros. Maybe not yet.
My year started off slowly though. Real slowly. Found myself basically flat (up a touch) on July first. Then I proceeded to knock the cover off the ball. The final six months of the year I did no wrong, 6-0 down the stretch.
In August when the market got hammered my trading account soared 12% for the MONTH. Yet when the market rebounded sharply in September I was up another 8.5%. November saw another swoon but I was up again, 8.6% this time. So in the second half when the markets gyrated violently in one direction then another I profited regardless of direction- though mostly on the short side.
Reading everything within reach related to trading over the years I have developed a theory. Trading is a lifelong challenge. Traders will tread water for years. Many will blow themselves up or give up in frustration while others may lack the discipline necessary to become consistently profitable in the markets. Some of those who stay in the game will at some point maybe after 10 or 20 years have it just "click". It all slows down and starts making sense and you essentially turn the corner into the promised land of consistent profits.
Like a second or third year NFL quarterback who talks about the game slowing down. You've thrown some interceptions, gotten hit and now with experience and maturity have a better understanding of the game. Some traders are Ryan Leaf, never maturing. Others are like Rich Gannon who was a journeyman who shined late in his career. John Elway is one in a million talent and those are your odds at that kind of success.
So there have been a couple of times over the years when in the midst of a big winning streak I wonder to myself if I've "clicked". Very shortly thereafter I proceed to blow myself up with a series of awful trades.
Well here I am again.
This time there are some key differences. I have in the second half been banking coin on many different positions long and short whereas before it was a big bet on one good idea. Basically position sizing. No one thing is going to blow me up so I have eliminated risk and taken some of the volatility out of my returns.
Secondly, when a trade is entered my primary concern is risk not profit. Risk should be defined beforehand. I'm generally unwilling to risk much and have cut my losers religiously.
I've worked harder and been more disciplined then ever before.
So entering 2008 I'm filled with anxious anticipation. We'll soon find out whether or not it has "clicked" for real. Furthermore the market backdrop is dramatic and the scene is set for some very serious fireworks. I just love what I do. Can't wait to see what happens next. We are absolutely living in a period of time that will make the history books of the future.
If I should spend the early months of 2008 destroying my trading capital crashing back to earth it will only be a temporary setback because I sense that I'm getting closer all the time.
To be blunt my performance was nothing short of spectacular. It really is that simple. I'm one college dropout that should be trading for Soros. Maybe not yet.
My year started off slowly though. Real slowly. Found myself basically flat (up a touch) on July first. Then I proceeded to knock the cover off the ball. The final six months of the year I did no wrong, 6-0 down the stretch.
In August when the market got hammered my trading account soared 12% for the MONTH. Yet when the market rebounded sharply in September I was up another 8.5%. November saw another swoon but I was up again, 8.6% this time. So in the second half when the markets gyrated violently in one direction then another I profited regardless of direction- though mostly on the short side.
Reading everything within reach related to trading over the years I have developed a theory. Trading is a lifelong challenge. Traders will tread water for years. Many will blow themselves up or give up in frustration while others may lack the discipline necessary to become consistently profitable in the markets. Some of those who stay in the game will at some point maybe after 10 or 20 years have it just "click". It all slows down and starts making sense and you essentially turn the corner into the promised land of consistent profits.
Like a second or third year NFL quarterback who talks about the game slowing down. You've thrown some interceptions, gotten hit and now with experience and maturity have a better understanding of the game. Some traders are Ryan Leaf, never maturing. Others are like Rich Gannon who was a journeyman who shined late in his career. John Elway is one in a million talent and those are your odds at that kind of success.
So there have been a couple of times over the years when in the midst of a big winning streak I wonder to myself if I've "clicked". Very shortly thereafter I proceed to blow myself up with a series of awful trades.
Well here I am again.
This time there are some key differences. I have in the second half been banking coin on many different positions long and short whereas before it was a big bet on one good idea. Basically position sizing. No one thing is going to blow me up so I have eliminated risk and taken some of the volatility out of my returns.
Secondly, when a trade is entered my primary concern is risk not profit. Risk should be defined beforehand. I'm generally unwilling to risk much and have cut my losers religiously.
I've worked harder and been more disciplined then ever before.
So entering 2008 I'm filled with anxious anticipation. We'll soon find out whether or not it has "clicked" for real. Furthermore the market backdrop is dramatic and the scene is set for some very serious fireworks. I just love what I do. Can't wait to see what happens next. We are absolutely living in a period of time that will make the history books of the future.
If I should spend the early months of 2008 destroying my trading capital crashing back to earth it will only be a temporary setback because I sense that I'm getting closer all the time.
Friday, December 28, 2007
Those Shorts they Stuck
Every last one except for a mid morning stab at AMZN. Yesterday I reestablished shorts in commercial real estate. The aforementioned SLG again and another as well as beefing up my position in IYR. Today I shorted with impunity. Still have some longs so I'm not entirely lopsided. Although maybe it's time to get lopsided because I see shorting opportunities in bunch of names. The watchlist is now full of them. Not only the ones I've liked recently but all the old favorites are back in play.
I salivate and all of the sudden need more money in the trading account to fulfill my plan for world domination. In 2008 I will rape and pillage.
Financials are going down again. Stayed away from shorting them recently for fear of a bounce. It's not coming and these stocks are making new lows. It will continue in waves and some exposure there is necessary. Leaning towards playing individual names as opposed to the XLF. Remember that the financials have been a market tell with great reliability.
The market got bashed. Dollar down hard. Bhutto assassination (Hello- Pakistan has nukes). Economic numbers continue to suck. Trannies are ugly. Metals flat to down.
Watch your ass here. If you are a bull you better plan to play defense. Like Boston Celtics defense. You better hold it down because the bears are coming with pitchforks and molotov cocktails. Good luck to you.
I salivate and all of the sudden need more money in the trading account to fulfill my plan for world domination. In 2008 I will rape and pillage.
Financials are going down again. Stayed away from shorting them recently for fear of a bounce. It's not coming and these stocks are making new lows. It will continue in waves and some exposure there is necessary. Leaning towards playing individual names as opposed to the XLF. Remember that the financials have been a market tell with great reliability.
The market got bashed. Dollar down hard. Bhutto assassination (Hello- Pakistan has nukes). Economic numbers continue to suck. Trannies are ugly. Metals flat to down.
Watch your ass here. If you are a bull you better plan to play defense. Like Boston Celtics defense. You better hold it down because the bears are coming with pitchforks and molotov cocktails. Good luck to you.
Thursday, December 27, 2007
So Here We Are Again...
...flirting with 1490 on the SPX. The shorts I put on yesterday seem to be sticking for now.
Wednesday, December 26, 2007
Today I Sat and Watched the Paint Dry
This is the time where so-called professional money managers paint the tape. End of quarter. End of calender year even better. This type of open secret is reflective of the fact that there is little to no regulation by oh say, the SEC.
There are more longs on the watchlist lately. Oil names. Gold. Which by the way is breaking out of it's consolidation and awaiting the confirmation of new highs. Silver should also be watched closely for the big breakout. Silver could go nuts to the upside. Added more gold on Friday. My intention is to get bigger.
As for the market as a whole the bulls remain in control for the moment. Wait until the volume returns in January and we'll get a definitive direction one way or the other. The SPX and RUT sit at or near key levels.
We could go higher from here. I hate to say it but it could happen. It wouldn't take much to break the bears now. We are teetering. I'm ever so slightly net short. The financials could bounce and that is the key. Need to be more selective in shorting those names.
The consensus however now anticipates a January swoon. Financials get hammered again. If we get that scenario this market will break and it will be time to press your bets on the short side. The point is to have a plan for either scenario. Take what the market gives you and swim with the tide whenever possible.
Regardless of the near term machinations next year will be very interesting. Of that I'm certain.
There are more longs on the watchlist lately. Oil names. Gold. Which by the way is breaking out of it's consolidation and awaiting the confirmation of new highs. Silver should also be watched closely for the big breakout. Silver could go nuts to the upside. Added more gold on Friday. My intention is to get bigger.
As for the market as a whole the bulls remain in control for the moment. Wait until the volume returns in January and we'll get a definitive direction one way or the other. The SPX and RUT sit at or near key levels.
We could go higher from here. I hate to say it but it could happen. It wouldn't take much to break the bears now. We are teetering. I'm ever so slightly net short. The financials could bounce and that is the key. Need to be more selective in shorting those names.
The consensus however now anticipates a January swoon. Financials get hammered again. If we get that scenario this market will break and it will be time to press your bets on the short side. The point is to have a plan for either scenario. Take what the market gives you and swim with the tide whenever possible.
Regardless of the near term machinations next year will be very interesting. Of that I'm certain.
Monday, December 24, 2007
BAH HUMBUG
Friday I took multiple punches to the groin. It's important to remember that even if we get a bear market and the right side to play is the short side, when the bounce comes you had better respect it because it's likely to be violent. Caught net short Friday morning I did not respect the bounce. Instead of moving my feet I stood still on the tracks and got run over. A mistake for sure that has cost me a good deal of my monthly profit. Not acceptable. I do not like to lose.
It does you no good to fall in love with your positions. If you are getting hurt you need to move your feet. Period. Rule Number One: Control Your Losses. Obey this rule above all others. Close the damn position. Take your money and run when necessary. Any position closed can be re-opened under different circumstances. I've lost more money than I count being afraid of "missing the move". Screw that. Live to fight another day.
Five trading days left. I intend to preserve my profits (and keep my longest ever winning streak alive) if I have to close every single position I have. Period. No room for stubbornness- certainly a fault of mine.
It does you no good to fall in love with your positions. If you are getting hurt you need to move your feet. Period. Rule Number One: Control Your Losses. Obey this rule above all others. Close the damn position. Take your money and run when necessary. Any position closed can be re-opened under different circumstances. I've lost more money than I count being afraid of "missing the move". Screw that. Live to fight another day.
Five trading days left. I intend to preserve my profits (and keep my longest ever winning streak alive) if I have to close every single position I have. Period. No room for stubbornness- certainly a fault of mine.
Friday, December 21, 2007
Assume the Position
Bent over. I'm waiting for my shorts to be eviscerated at the open. Looks like there will be more meat on the bone when it's time to get aggressively short again. Currently sitting tight with a lot of capital on the sidelines. Don't see how this market is going much higher with the fundamentals deteriorating rapidly.
Some of this pop is RIMM. Some is OP/EX games.
Some of this pop is RIMM. Some is OP/EX games.
Thoughts on Gold
This is looking more like consolidation then the pullback I expected. Consolidation could lead to higher prices. The idea is to wait for the consolidation to conclude then trade in the direction of the breakout. I could potentially get very bullish if we break higher.Long Ideas? I've Been Drinking; It's Almost 3AM
Felt out of rhythm the last couple days. Giving back some profits. Pulling back on trade size and risk exposure. Playing safe, I guess. Today was better and tonight the watchlist is pregnant with potential. Initiated two shorts, one long- SCHN is a trend line play. Shorted some FNM. Actually the position might be a touch big because I really just want to send out a scout position. See if it sticks.
and
This one I've been long for awhile. Takes time for one of these long term consolidation patterns to play out.
Tonight and last the watchlist has many more long ideas. Here are a few.
andThis one I've been long for awhile. Takes time for one of these long term consolidation patterns to play out.
Here is one I'm waiting for. Anxiously.
Now for some of my mistakes. You won't believe it but I sold the below stock on Monday. The day before the +15% moonshot. Monday afternoon just randomly throwing shit into the fire. Well imagine my surprise Tuesday morning when gapped up four bucks. Then proceeded to go higher all day. I literally thought to myself when I sold- shoulda waited until it hit $48.50 on the downside since that was the plan. The plan- remember that hotshot? A bit more pain but no I figured I was wrong prematurely. Just throwin' it in the fire to watch it burn.
The sin on CRM is one of inaction. I've watched the stock closely and traded it successfully in the past. One of my better long trades of the year- pure rocket fuel. As soon as it cleared 57 1/2 it was flashing on my watchlist. Jumping off the page at me. I sat and watched. Sat and watched. Today it happened- the explanation point.
Screw Christmas. I'm ready for next year to start. Consider all these long ideas to be my holiday cheer because once that wears off the market is going to get creamed. Maybe it's all the booze in my coffee. Still net short but backing off a touch. The edge is close. Tangling with CCL again, stop is tight. Planning to close out my best year ever strong. I'm sprinting to the line after jogging the last mile. In 2008 fortunes will be made and lost.
Tuesday, December 18, 2007
No Vacation Here
Many traders have closed up shop for the year. Booked gains and made reservations. Not me. While others are enjoying a holiday vacation from the markets I am right here hard at work. I'm like Floyd Mayweather in the gym on the treadmill at 2 AM while his opponents are sleeping.
Next year is going to be very interesting. I'm going to bring my A-game.
Next year is going to be very interesting. I'm going to bring my A-game.
Friday, December 14, 2007
Ben "Dover" Bernanke
Releasing the information the way they did this week our Federal Reserve was intentionally manipulating the markets. With no clear mention of it Tuesday when they made their scheduled rate decision they come back Wednesday and drop a bomb on traders. For good measure they leaked the information. Right before the market open in a deliberate attempt to jam the futures. Which they did to a degree to which I've seldom ever seen. Bam! Just like that. You can bet somebody got carried off the trading floor on a stretcher.
This is just some shady, sleazy and unethical stuff here. I don't appreciate it and I was glad to see most of the gains come off as the day wore on. These sort of things increase the already substantial risk of being short in this market. But I for one sure as hell don't want to be long.
Bernanke shot his weapon this week. He has more ammunition but the Fed is losing credibility and it's about time. Again, they are a joke. This sort of underhanded delivery in addition to a plan lacking in transparency undermines confidence in the market place. This place is a banana republic. We need to see what the damage is- who is insolvent?- but the only efforts being made by the Treasury and Fed work to further obfuscate.
Today's (Thursday) action was nondescipt. Down big this morning only to rally back to flat- more or less. I covered some at the lows only because I was carrying a lot of risk (and they were down big) but I feel confident in my positions for the most part. Generally though I would prefer to have less skin in the game going into year end simply to preserve gains.
Yields have shot up this week and that bears watching. Dollar also bouncing. Metals got creamed today and I remain short term negative on them. Maintain insurance sized position but nothing speculative. Don't forget the highest month over month gain in the PPI since the 1970's. Whew! That's hot. Fed in a box. Friday we get CPI data.
If we are up much on the indexes I may be forced to take cover and live to fight another day. As much as I want to be banking coin while other traders are going on vacation- working hard when others aren't- wouldn't mind declaring victory and going kayaking.
This is just some shady, sleazy and unethical stuff here. I don't appreciate it and I was glad to see most of the gains come off as the day wore on. These sort of things increase the already substantial risk of being short in this market. But I for one sure as hell don't want to be long.
Bernanke shot his weapon this week. He has more ammunition but the Fed is losing credibility and it's about time. Again, they are a joke. This sort of underhanded delivery in addition to a plan lacking in transparency undermines confidence in the market place. This place is a banana republic. We need to see what the damage is- who is insolvent?- but the only efforts being made by the Treasury and Fed work to further obfuscate.
Today's (Thursday) action was nondescipt. Down big this morning only to rally back to flat- more or less. I covered some at the lows only because I was carrying a lot of risk (and they were down big) but I feel confident in my positions for the most part. Generally though I would prefer to have less skin in the game going into year end simply to preserve gains.
Yields have shot up this week and that bears watching. Dollar also bouncing. Metals got creamed today and I remain short term negative on them. Maintain insurance sized position but nothing speculative. Don't forget the highest month over month gain in the PPI since the 1970's. Whew! That's hot. Fed in a box. Friday we get CPI data.
If we are up much on the indexes I may be forced to take cover and live to fight another day. As much as I want to be banking coin while other traders are going on vacation- working hard when others aren't- wouldn't mind declaring victory and going kayaking.
Wednesday, December 12, 2007
Sorry Ben Try Again
Banks red. XLF red. Dow up only 75 points. S&P under 1490.
FLIP. FLIP. FLIP. FLIP.
GAME OVER.
FLIP. FLIP. FLIP. FLIP.
GAME OVER.
Pump Fading
So this morning we were reassured by the Fed that they will take every precaution to avoid the pain. Just what the market wanted to hear. The details aren't important. It was reason to celebrate. And celebrate we did, up 2% across the board at the open.
However as the day wears on the pump is fading. The air is slowly being let out of the balloon. As I type we are sitting right on the key level for the S&P. 1493-ish. This must hold for the bulls. If not the bears may be back in control.
Considering my positioning coming into today I should have been taken out and shot at the open. It wasn't a pretty picture but I expected worse. By 10:30 it wasn't looking too bad. The loss at that point was manageable. I shorted a bit more. By 11 o'clock I had turned green on the day. Shorted some more. Now I'm solidly green and increasingly nervous (as the next bailout could come any time).
When you feel like you should be down HUGE and you aren't usually it's best to stick it out. We have these big up days where I should be getting killed but my losses are manageable. Tells me to be patient through the pain. Today, I feel as if Bernanke personally and deliberately tried to screw me. Has the feel of a hail mary. If anything the action today has emboldened me. I need the key support levels to fall or else I may regret putting so many chips on the table.
However as the day wears on the pump is fading. The air is slowly being let out of the balloon. As I type we are sitting right on the key level for the S&P. 1493-ish. This must hold for the bulls. If not the bears may be back in control.
Considering my positioning coming into today I should have been taken out and shot at the open. It wasn't a pretty picture but I expected worse. By 10:30 it wasn't looking too bad. The loss at that point was manageable. I shorted a bit more. By 11 o'clock I had turned green on the day. Shorted some more. Now I'm solidly green and increasingly nervous (as the next bailout could come any time).
When you feel like you should be down HUGE and you aren't usually it's best to stick it out. We have these big up days where I should be getting killed but my losses are manageable. Tells me to be patient through the pain. Today, I feel as if Bernanke personally and deliberately tried to screw me. Has the feel of a hail mary. If anything the action today has emboldened me. I need the key support levels to fall or else I may regret putting so many chips on the table.
Bulls Demand Investing Be Risk-Free
So just when you think that the Fed has grown some balls and stood up to the crack addicts on Wall Street (yeah, right) we hear rumors of another inter-meeting discount rate cut. Maybe by week's end. What an absolute joke our Fed is. The market didn't like dosage so less than 12 hours later we're already demanding more crack. Market participants are DEMANDING that investing be RISK-FREE. There are no free markets. These bulls are all out blaming the Fed for their losses yesterday. Again, what a joke. If you lose money in the market the only one to blame is yourself. Not the Fed, not some conspiracy, not the sun the moon and the stars.
The powers that be will pull out all the stops to keep this market elevated. Every crack in the dam will be met with another bailout attempt. There are no free markets. Comrade Bernanke will just make shit up if he has to. How about we buy up all the bad debt at par? Comrade Paulson will rewrite all the rules. Why don't we just throw out 200 years of contract law and rewrite contracts by government decree? These guys will purposely screw the short sellers.
Hence, money management will be key for bulls and bears alike. I can't stress enough how dangerous of an environment this has become for all market participants.
I, for one, still don't see how this can end well. There are delicious shorting opportunities everywhere but today may belong to the bulls as we look to retrace some of yesterday's big downdraft. I'm net short again and would look to get more aggressive if the bulls can't keep the ball.
Good luck folks. Be careful out there.
The powers that be will pull out all the stops to keep this market elevated. Every crack in the dam will be met with another bailout attempt. There are no free markets. Comrade Bernanke will just make shit up if he has to. How about we buy up all the bad debt at par? Comrade Paulson will rewrite all the rules. Why don't we just throw out 200 years of contract law and rewrite contracts by government decree? These guys will purposely screw the short sellers.
Hence, money management will be key for bulls and bears alike. I can't stress enough how dangerous of an environment this has become for all market participants.
I, for one, still don't see how this can end well. There are delicious shorting opportunities everywhere but today may belong to the bulls as we look to retrace some of yesterday's big downdraft. I'm net short again and would look to get more aggressive if the bulls can't keep the ball.
Good luck folks. Be careful out there.
Tuesday, December 11, 2007
Bears Back in the Driver's Seat
We literally crashed through all meaningful support today. This market is like a crack addict. The addict needs more and more rate cuts to get high. 25 bps wasn't enough.
After high sticking and checking the bulls into the boards today I'm shutting the computer off and going to a hockey game. When I get home I'll have 4 or 5 hours of homework to look forward too. Then maybe I'll have a chance to post some further thoughts. Or perhaps not.
After high sticking and checking the bulls into the boards today I'm shutting the computer off and going to a hockey game. When I get home I'll have 4 or 5 hours of homework to look forward too. Then maybe I'll have a chance to post some further thoughts. Or perhaps not.
Monday, December 10, 2007
Further on the Freeze
From the San Francisco Chronicle :
"But unfortunately, the "freeze" is just another fraud - and like the other bailout proposals, it has nothing to do with U.S. house prices, with "working families," keeping people in their homes or any of that nonsense.
The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value - right now almost 10 times their market worth.
The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.
And, to be sure, fraud is everywhere. It's in the loan application documents, and it's in the appraisals. There are e-mails and memos floating around showing that many people in banks, investment banks and appraisal companies - all the way up to senior management - knew about it."
"But unfortunately, the "freeze" is just another fraud - and like the other bailout proposals, it has nothing to do with U.S. house prices, with "working families," keeping people in their homes or any of that nonsense.
The sole goal of the freeze is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value - right now almost 10 times their market worth.
The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.
And, to be sure, fraud is everywhere. It's in the loan application documents, and it's in the appraisals. There are e-mails and memos floating around showing that many people in banks, investment banks and appraisal companies - all the way up to senior management - knew about it."
Saturday, December 8, 2007
Brief Summary of Last Week's Trading
Monday night my watchlist was ripe with short candidates. Monday had been good to me and Tuesday was great. Still net short when Wednesday news of the big mortgage bailout started to gain traction. I got plowed and took down a lot of risk. The bulls had gained the advantage and bears like myself were on the run. By Thursday I was almost flat. If not flat, unlevered and market neutral. That was the day the bulls gained a significant advantage in that we catapulted through all of the key resistance levels on the DOW and the S&P.
Big week for the bulls. Apparently the market is convinced that the bailout will make us all whole. We may have to throw out two hundred years of contract law but as long as the bull remains intact it all be OK. Sure. As a seller, this all leaves me feeling pretty demoralised. Hence my decision to basically go flat and sit on my hands after the big ramp job Wednesday.
Not thrilled to be net long. Not in any meaningful way but it's more or less a reflection of having covered nearly all my shorts. Good thing too. Nothing more dangerous than a wounded bull.
The short side was the right trade and I feel like I got de-balled by some bullshit bailout. But this sort of thing is to be expected if we are undergoing a trend change (and that's not a certainty at this point). The bulls will pull out all the stops to keep the run alive and staunch the selling. The averages will gyrate back and forth through the 200-dma until the psychology changes and reality sinks in. Don't underestimate our government's ability to dream up half-baked bailouts. This is two bailouts now (including the SIV bailout proposal).
Net-net I didn't make much of anything this week. Some beer money. Had I refused to acknowledge that the bulls had gained the advantage I could have lost myself a small fortune. Wednesday alone I gave back the equivalent of Zambia's GDP. So discipline won out over emotion and from that alone I derive comfort. I actually have some longs I'm excited about.
At some point I decided to ease off until year end and reflect. Unlikely that will stick but it sounds appealing after all of the nonsense last week. The market has unhitched itself from reality but that doesn't mean we can't go higher still. The consensus is that we will rally until January. Seems too cute and convenient to me but I'm in no mood to take the other side of that trade right now. It's been a phenomenal year. No sense in getting gored.
Big week for the bulls. Apparently the market is convinced that the bailout will make us all whole. We may have to throw out two hundred years of contract law but as long as the bull remains intact it all be OK. Sure. As a seller, this all leaves me feeling pretty demoralised. Hence my decision to basically go flat and sit on my hands after the big ramp job Wednesday.
Not thrilled to be net long. Not in any meaningful way but it's more or less a reflection of having covered nearly all my shorts. Good thing too. Nothing more dangerous than a wounded bull.
The short side was the right trade and I feel like I got de-balled by some bullshit bailout. But this sort of thing is to be expected if we are undergoing a trend change (and that's not a certainty at this point). The bulls will pull out all the stops to keep the run alive and staunch the selling. The averages will gyrate back and forth through the 200-dma until the psychology changes and reality sinks in. Don't underestimate our government's ability to dream up half-baked bailouts. This is two bailouts now (including the SIV bailout proposal).
Net-net I didn't make much of anything this week. Some beer money. Had I refused to acknowledge that the bulls had gained the advantage I could have lost myself a small fortune. Wednesday alone I gave back the equivalent of Zambia's GDP. So discipline won out over emotion and from that alone I derive comfort. I actually have some longs I'm excited about.
At some point I decided to ease off until year end and reflect. Unlikely that will stick but it sounds appealing after all of the nonsense last week. The market has unhitched itself from reality but that doesn't mean we can't go higher still. The consensus is that we will rally until January. Seems too cute and convenient to me but I'm in no mood to take the other side of that trade right now. It's been a phenomenal year. No sense in getting gored.
Thursday, December 6, 2007
Dennis Gartman on Mortgage Bailout
"We wonder who it shall be that will make the decisions involved as to which mortgagee shall be helped out and which shall be left behind. What shall become of those mortgagees who had paid up their mortgages; accepted the newer, higher rates; and have been consistent in meeting their obligations? Are they to be sacrificed, while those who've been late or moved to foreclosure shall be given aid from the government? Are we about to shower benefits upon the profligate, while denying those who've followed the rules?
"Are contracts no longer to be viewed as law, but rather are to be viewed as nothing other than mere whim? If we are to allow mortgagees who are in trouble to stand down and have their problems taken up by taxpayers, what then of contracts anywhere? Can we demand foreign governments, or foreign companies, or foreign individuals to stand by their commitments to Americans if Americans will not stand by their commitments to one another?
"No one wants to see people put out from their homes. No one wants to see the television photo-op of poor people pushed from their homes at Christmastime, or in the depths of winter. No bank wants to take delivery of a foreclosed-upon home when it could be left in the hands of the former home owner, with the mortgage shortage to be worked out over time. But to have the government step in and mandate that homeowners be allowed, under penalty of law, to remain in their homes and for banks to be forced to accommodate is legal and philosophical madness.
"This is a country of law, which believes in the sanctity of contract agreed upon by those who've consented to the binding nature of that contract. If the parties involved wish to change the contract, and if agreement can be reached to do so, then it can and should be done. But to have government force the issue -- and worse, to mandate [that] taxpayer funds be used to do so -- is morally wrong, with implications that shall redound into any and all other economic concerns."
"Are contracts no longer to be viewed as law, but rather are to be viewed as nothing other than mere whim? If we are to allow mortgagees who are in trouble to stand down and have their problems taken up by taxpayers, what then of contracts anywhere? Can we demand foreign governments, or foreign companies, or foreign individuals to stand by their commitments to Americans if Americans will not stand by their commitments to one another?
"No one wants to see people put out from their homes. No one wants to see the television photo-op of poor people pushed from their homes at Christmastime, or in the depths of winter. No bank wants to take delivery of a foreclosed-upon home when it could be left in the hands of the former home owner, with the mortgage shortage to be worked out over time. But to have the government step in and mandate that homeowners be allowed, under penalty of law, to remain in their homes and for banks to be forced to accommodate is legal and philosophical madness.
"This is a country of law, which believes in the sanctity of contract agreed upon by those who've consented to the binding nature of that contract. If the parties involved wish to change the contract, and if agreement can be reached to do so, then it can and should be done. But to have government force the issue -- and worse, to mandate [that] taxpayer funds be used to do so -- is morally wrong, with implications that shall redound into any and all other economic concerns."
Tuesday, December 4, 2007
1-800-Hail-Mary
See the animals in the stream. That's the bulls right now. They haven't been burned yet but how are they going to take this market higher with the hills around them set ablaze? They should be frightened. We all should be cautious.
Today was modestly red. Financials were weak. That may be the tell again. Yen was strong against the dollar. Mo-mo names were weak led by RIMM. The real action though was the unveiling of the big "keep 'em in their houses" campaign by Treasury secretary Hank Paulson.
1-888-Give-Me-Break
All we really needed was a hotline and a rate freeze although that part is a little vague. The idea being that if you bought a house you can't afford you just need to talk to a debt counselor. The banks are in on the plan. What's in it for them? Something I'm sure. Maybe it's just a matter of getting the message out to pay what you can rather than mailing them the keys.
Couldn't bring myself to watch the whole charade on CNBC. We got a little rally off of it but that didn't hold. Apparently, the plan is not to use taxpayer money. Yeah right.
The reality is that house prices need to come down. Period. Anything that delays or inhibits the natural clearing of the dead wood is detrimental to those who acted responsibly. Any bailout is a penalty to those who were most conservative and responsible. Just like all this rate cutting again punishes savers. You can bet the big plan benefits the big players.
I suppose there is also an element of political posturing going on here. Elected officials want to be out front of this and show their constituents they are doing something. However vain. Expect more pounding of the bailout drums.
Gold...Hmm?
Right up front. I'm concerned about a potential dollar bounce. Metals are sitting right at key levels. If they hold I may get optimistic but right now I still remain cautious. I'm concerned short term and perplexed long term. Find myself in the process of reevaluating my view based on new information. Right now I hold an insurance policy position in the trading account aside from what's in the vault. Short term I want to be long cash. As in, cash in my wallet and under my mattress. Better than keeping it in some shady bank who could potentially be insolvent.
There is more to say on this and other subjects but I'm losing all ability to function at 1:56 AM. Good. Night.
Monday, December 3, 2007
And the Week Begins Anew
Friday was a big ramp job in the morning followed by waning enthusiasm as the day wore on. Whether or not we have seen the bulk of this run is undetermined but I used Friday's strength to go back to work on the short side. We shall find out soon enough if that was wise.
Going through the watchlist this weekend left me feeling sort of agnostic in regards to near term market direction. The bulls have the potential for myriad exotic bailouts on their side and the bears have reality on theirs. Either can win in the short run.
Going through the watchlist this weekend left me feeling sort of agnostic in regards to near term market direction. The bulls have the potential for myriad exotic bailouts on their side and the bears have reality on theirs. Either can win in the short run.
Friday, November 30, 2007
Dipping a Toe
I'm cautiously dipping my toe back in on the short side. 600 points in three days has put some meat back on the bone. We'll see. I'm re-entering things slowly for now.
Airlines and commercial real estate stocks seem vulnerable.
Airlines and commercial real estate stocks seem vulnerable.
The Fuse Has Been Lit
Just wait, there will be more.
MORE:
Other states are experiencing similar problems on a smaller scale.
The Montana Board of Investments, which manages the state's money, has seen $247
million withdrawn by local governments in the past three days from a $2.5
billion money-market-like fund called the Short Term Investment Pool.
"We've had some local government withdrawals in the past few days because of reports
about Florida's problems," Carroll South, executive director at the Montana
Board of Investments, said in an interview on Thursday.
Rating agency Standard & Poor's warned last month that it could downgrade a $4.8 billion
investment pool run by King County, Wash., because of potential subprime exposures.
MORE:
Other states are experiencing similar problems on a smaller scale.
The Montana Board of Investments, which manages the state's money, has seen $247
million withdrawn by local governments in the past three days from a $2.5
billion money-market-like fund called the Short Term Investment Pool.
"We've had some local government withdrawals in the past few days because of reports
about Florida's problems," Carroll South, executive director at the Montana
Board of Investments, said in an interview on Thursday.
Rating agency Standard & Poor's warned last month that it could downgrade a $4.8 billion
investment pool run by King County, Wash., because of potential subprime exposures.
Preview
"The nation's subprime-mortgage crisis is prompting Florida cities, counties and agencies to pull billions of dollars out of a state-run investment fund.
They fear they could have lost their money because a state agency invested it in funds backed by loans to homeowners with questionable credit -- the same loans that have triggered an international credit crunch.
Governments and agencies typically take money intended to pay for such basics as teacher salaries or road repairs and invest it in the short-term state fund so they earn interest before the bills come due."
Here's where we are headed. The toxic waste is everywhere. I'm not kidding. Got to love Gov. Crist's response, which was basically, "Don't worry we'll bail you out."
Since Greenspan we've all become accustomed to bailouts. Seems like everyone gets bailed out. We have socialized risk. Meanwhile the profits are usually private. At some point this all becomes too big to bailout. Can we really bailout everyone at the same time? Who is going to bailout our government? China?
It's all one trade. The equity markets are at that same point, where we assume the bailout is coming to save us. The Fed will cut and save us. It always works right? Well I fail to see how problems that were created by easy money will be fixed by more easy money. Anyway here are the articles:
http://www.orlandosentinel.com/news/local/state/orl-bk-statefund112907,0,5698387.story?coll=orl_tab01_layout
http://www.orlandosentinel.com/news/local/state/orl-run2907nov29,0,138068.story
Thursday, November 29, 2007
Bears Get the Horns
Out was smart. For the moment anyway. I'm still out. Basically flat save for a small handful of positions. This way I'm not hostile and feeling under attack with the market going against me. Really I should have not only covered but went long today as well. Don't know why I felt it appropriate to be so arrogant as to shun easy low risk long trades. Bottom line is I don't trust the long side here. Our problems are just too big. It's important to be able to sleep at night.
Apparently the "Fed will save us" trade is back on in the equity markets. Strikes me as fallacy but the fallacy has the upper hand for the moment. No sense in fighting it. The more of a bounce we get the more meat on the bone come time to short again. Thing is, none of this will be easy. The coming bear market will be tough to trade long or short. Think volatility.
Wednesday, November 28, 2007
I'm Gone
Futures up huge again. Just like that. I'm wrong, I'm gone. This morning I will burn it all to the ground. No part of my trading plan allows for staying flat-footed while losing money. I'm gone. Maybe I'll get long. Yuck. Maybe I'll go lay on the beach.
Really I should have been out before the close yesterday but I was out of the office for the last half hour. Didn't expect such a big pump into the close. That will cost me. It hurts too. The best month ever for me is no longer. But I will admit when I'm on the wrong side. That is clearly now the case. I'll take my remaining profits and walk.
My watchlist for today has long ideas outnumbering short 2 to 1. Let me be clear though. This bounce has legs and could even last until year end. Does it change the big picture? No. I still think this is setting up the shorting opportunity of a lifetime. However, in the short run, you must trade the tape you are given. You are never smarter than the market.
Really I should have been out before the close yesterday but I was out of the office for the last half hour. Didn't expect such a big pump into the close. That will cost me. It hurts too. The best month ever for me is no longer. But I will admit when I'm on the wrong side. That is clearly now the case. I'll take my remaining profits and walk.
My watchlist for today has long ideas outnumbering short 2 to 1. Let me be clear though. This bounce has legs and could even last until year end. Does it change the big picture? No. I still think this is setting up the shorting opportunity of a lifetime. However, in the short run, you must trade the tape you are given. You are never smarter than the market.
Tuesday, November 27, 2007
Sucker Rally
Not convinced by the huge upside action today. Staying pat with my shorts despite the pain.
Monday, November 26, 2007
Back to the Bloodletting
Well there you go. That bounce didn't last long. One day of weak holiday volume. We gave back all of Friday's gains. And more. One giant flush this afternoon.
This market is damaged. No. This market is broken. Not technically though. Not yet. Soon enough.
The pain has just begun. Maybe the market can put in a double bottom here and vault higher. Though it feels to me that we are rolling over. A CLIFF!?
Tonight's watchlist provided 37 short and 13 long candidates. I'll be looking at the shorts and maybe adding to current positions. Cautiously now. The bounce is still out there waiting to trap the bears. Change in sentiment from uber-bullish to sanguine/nervous has me concerned but I don't yet smell fear. AAPL, GOOG and RIMM need to roll first. That may start real soon. Or not. I'll be watching those names more closely just the same.
Again the futures are being gunned upward tonight, speaking of a bounce. See, I'm scared. The short side has been too easy and when I'm hot, I'm nervous. Let's see if this one lasts any longer.
I had lots to be thankful for this year. Hope you did too. Even had Thanksgiving TWICE, on two different days, at our house and with me doing dishes.
This market is damaged. No. This market is broken. Not technically though. Not yet. Soon enough.
The pain has just begun. Maybe the market can put in a double bottom here and vault higher. Though it feels to me that we are rolling over. A CLIFF!?
Tonight's watchlist provided 37 short and 13 long candidates. I'll be looking at the shorts and maybe adding to current positions. Cautiously now. The bounce is still out there waiting to trap the bears. Change in sentiment from uber-bullish to sanguine/nervous has me concerned but I don't yet smell fear. AAPL, GOOG and RIMM need to roll first. That may start real soon. Or not. I'll be watching those names more closely just the same.
Again the futures are being gunned upward tonight, speaking of a bounce. See, I'm scared. The short side has been too easy and when I'm hot, I'm nervous. Let's see if this one lasts any longer.
I had lots to be thankful for this year. Hope you did too. Even had Thanksgiving TWICE, on two different days, at our house and with me doing dishes.
Wednesday, November 21, 2007
It's Everywhere!
The toxic waste is everywhere. Like I've been saying, it's in your money-market fund and it's in your pension. It's owned by your bank, your insurance company and, apparently, your state and local governments. This is going to be ugly when all these dead bodies manage to start floating to the surface.
Public School Funds Hit by SIV Debts Hidden in Investment Pools
By David EvansNov. 15 (Bloomberg) -
- Hal Wilson smiles at the blue numbers on his desktop screen. His money is yielding 5.77 percent. For the chief financial officer of Florida's Jefferson County school board, that means the $2.7 million of taxpayer funds he's placed in the state's Local Government Investment Pool is earning more on this October day than it would get in a money market fund. And Wilson says he knows the Florida officials who manage the funds of the 1,559-student district have invested them wisely. ``We're such a small school district,'' Wilson, 55, says. ``We don't have the time or staff for professional money management. They have lots of investment advisers. It's risk free and easy.'' It may be easy, but it's not risk free.
What Wilson didn't know in October -- and what thousands of municipal finance managers like him across the country still haven't been told -- is that state-run pools have parked taxpayers' money in some of the most confusing, opaque and illiquid debt investments ever devised. These include so-called structured investment vehicles, or SIVs, which are among the subprime mortgage debt-filled contrivances that have blown up at the biggest banks in the world.
Public School Funds Hit by SIV Debts Hidden in Investment Pools
By David EvansNov. 15 (Bloomberg) -
- Hal Wilson smiles at the blue numbers on his desktop screen. His money is yielding 5.77 percent. For the chief financial officer of Florida's Jefferson County school board, that means the $2.7 million of taxpayer funds he's placed in the state's Local Government Investment Pool is earning more on this October day than it would get in a money market fund. And Wilson says he knows the Florida officials who manage the funds of the 1,559-student district have invested them wisely. ``We're such a small school district,'' Wilson, 55, says. ``We don't have the time or staff for professional money management. They have lots of investment advisers. It's risk free and easy.'' It may be easy, but it's not risk free.
What Wilson didn't know in October -- and what thousands of municipal finance managers like him across the country still haven't been told -- is that state-run pools have parked taxpayers' money in some of the most confusing, opaque and illiquid debt investments ever devised. These include so-called structured investment vehicles, or SIVs, which are among the subprime mortgage debt-filled contrivances that have blown up at the biggest banks in the world.
Tuesday, November 20, 2007
Bad Day To Be a GSE
Interesting day in the markets, if you like stomach churning events, like say bad automobile accidents or current pop/celebrity culture. Up 120 on the DOW, then down 260 to the lows, then up 170 from the lows in a straight line into the close. For me today, that reads like down some to up a whole lot to up less than a whole lot. There you go, still net short as the bulls press back hoping for a bottom. I believe any bottom would be short-lived, should it come.
For your viewing pleasure today. I have a total horror-show. Blood. Gore. The whole nine.
This last one is more of a tell on the economy.
Monday, November 19, 2007
Where's My Turkey?
Pleasantly surprised to see the futures in the red this AM. What happened? I thought we were all supposed to buy stocks this week because of the calender. Hmmm. Well, I guess there is still a chance for the bulls to throw a party this week. I suspect they better hurry before the last level of support cracks and this whole market gets split open like a watermelon.
Three days and five hours until turkey.
Three days and five hours until turkey.
Saturday, November 17, 2007
Bring on the Turkey
Thanksgiving is the best holiday. Period. No gifts. Turkey and football. Excessive celebration of said holiday will be priority numero uno next week. As for markets I'll play defense.
Trading should be thin. Hopefully boring too. I've got stuff to do.
The consensus is that stocks will be bought based on the calender. Meanwhile the fundamentals are deteriorating around us. The weak bull case may win out in the short term. We could drift higher. Or not.
There are some stocks worth buying. Utilities and other defensive sectors look good. However, the warm fuzzy holiday market, if that's what we get, isn't likely to last long.
Full Disclosure: I hate Christmas.
Trading should be thin. Hopefully boring too. I've got stuff to do.
The consensus is that stocks will be bought based on the calender. Meanwhile the fundamentals are deteriorating around us. The weak bull case may win out in the short term. We could drift higher. Or not.
There are some stocks worth buying. Utilities and other defensive sectors look good. However, the warm fuzzy holiday market, if that's what we get, isn't likely to last long.
Full Disclosure: I hate Christmas.
Friday, November 16, 2007
Looking for the Rollover
One sector I want to watch closely and participate in from the short side is commercial real estate. These stocks have held up pretty well relative to other real estate/finance stocks. I'm looking for the rollover. Be careful these babies bounce hard.
There are a bunch of these stocks that have similar patterns though. So you have other choices. SLG, for instance, an old Ken Heebner favorite.
VNO is my favorite at the moment. If you look at the daily chart it's flirting with support.
There are a bunch of these stocks that have similar patterns though. So you have other choices. SLG, for instance, an old Ken Heebner favorite.
Agnostic
Feels like the easy money has been made on the short side. It may get a bit more complicated from here (in the short term anyway). I could make the case for a rally or another 300 DOW points of downside. I'm sort of agnostic. I'll try to stick with my shorts that are working but I want to be less aggressive on a Friday. My watch list is thin today. Two words: capital preservation.
Again, rally or no, there isn't much I want to buy here.
However, at some point here in the near future, I think silver is going to go nuts to the upside. It's marking time here. I feel no immediate urgency to add to my position but somewhere in this neighborhood is where I want to do so. The point is not to get too cute trying to buy at just the right time. Maybe I'll scale into some more SLV starting today. Maybe not. Just know that at some point the SLV is going to $200. I really want to be on that train in a big way. I've been waiting a long time for this breakout.
I remain short financials. Again, as we have observed previously, the market correction over the last couple days was led by financials. This has happened repeatedly. They are acting as a tell on the market as a whole. Continue to watch them.
Again, rally or no, there isn't much I want to buy here.
However, at some point here in the near future, I think silver is going to go nuts to the upside. It's marking time here. I feel no immediate urgency to add to my position but somewhere in this neighborhood is where I want to do so. The point is not to get too cute trying to buy at just the right time. Maybe I'll scale into some more SLV starting today. Maybe not. Just know that at some point the SLV is going to $200. I really want to be on that train in a big way. I've been waiting a long time for this breakout.
I remain short financials. Again, as we have observed previously, the market correction over the last couple days was led by financials. This has happened repeatedly. They are acting as a tell on the market as a whole. Continue to watch them.
Thursday, November 15, 2007
Perspective
My watchlist for today has 44 short candidates and 16 long candidates. Hmmm. It's a shame too. I'd like to be more balanced, and not leaning against this market so heavily, but the only candidates that really excite me are on the short side.
At midday the market seems to be rolling over here. Metals are getting creamed too. Should be an interesting afternoon. I guess I'll be rooting for more downside.
At midday the market seems to be rolling over here. Metals are getting creamed too. Should be an interesting afternoon. I guess I'll be rooting for more downside.
Where's the Fear?
I see none. AAPL up a couple bucks. AMZN upgraded. Buying the dip is apparently a difficult habit to break.
Wednesday, November 14, 2007
Late Day Plunge, Nice for a Change
No 2:30 jam-job into the close today folks. Nope. Today we plunged. Made my day.
What I saw today was a lot of stocks that had already made their moves back to overhead resistance (formerly support). Therefore, low risk shorting opportunities were abundant. And still are, some of them.
We made several attempts at the magical 1490 level on the SPX. The bulls were lobbing hand grenades and the bears were armed with kitchen scissors. Sure enough the bulls ended the day origami.
Metals were strong. Dollar spent the day trading lower before closing flat. Yen was off 1%.
Everything basically worked for me today. Even the lottery ticket (short AAPL) paid off. The balance of the week should be very interesting. Option expiration Friday. Heads up folks.
What I saw today was a lot of stocks that had already made their moves back to overhead resistance (formerly support). Therefore, low risk shorting opportunities were abundant. And still are, some of them.
We made several attempts at the magical 1490 level on the SPX. The bulls were lobbing hand grenades and the bears were armed with kitchen scissors. Sure enough the bulls ended the day origami.
Metals were strong. Dollar spent the day trading lower before closing flat. Yen was off 1%.
Everything basically worked for me today. Even the lottery ticket (short AAPL) paid off. The balance of the week should be very interesting. Option expiration Friday. Heads up folks.
Testing 1,2
Oh. Oh. Oh. I figured out how to put an image or chart on my page. What's up now?! Get up Estero! That only took 6 months. Bottom line is, and I often admit it, I have the mechanical aptitude of a 14-year-old girl. I'm pretty excited even though I'm probably still doing it wrong.
Thanks to Stockcharts.
Update
Couldn't resist. Took a position in the SDS this morning below 53. Small position. Limited risk. We get a close above 1500 on the SPX and I'm long gone. If it goes my way however the position will be increased.
Starting to dip my toe in on the short side again. Have lots of ideas.
Starting to dip my toe in on the short side again. Have lots of ideas.
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