Bookkeeping: Selling 2/3rds EnerNOC (ENOC)

The trade on EnerNOC (ENOC) worked out far more quickly than I anticipated... in no way, shape, or form is it normal for a stock to fall to its 200 day moving average and then turn on a dime and vault higher - especially a stock that has taken a beating for about 10 sessions in a row.  But much of the current market smells of not normal and we see the exact same behavior in the indexes over the past 6 months, so I guess I should not be too surprised.

As EnerNOC runs into some resistance we're going to take 2/3rds of the position we put on Monday off the table.  I had put a limit sell order out around $27.70 on Tuesday, not expecting it to hit anytime soon but here we are.

If the stock gets over $30, the chart will be in far better position and we'll most likely get back the 2/3rds we sold off.  Until otherwise proven, we assume it will falter before then.... happy to be proven wrong.

Long EnerNOC in fund; no personal position

S&P 500 Temporarily Falls to 20 Day Moving Average, Russell 2000 Back to "Broken"

Overnight, S&P futures had fallen all the way down to 1070, but as has been the case so many times the past year furious buying in premarket pushed the market higher in the 2 hours before the US markets opened.  Hence domestic markets launched far above the worse levels overnight.  The S&P has jumped as I write all the way back up to test its 20 day moving average from below (1090)... I had thought potentially last night that the "gap" at S&P 1070 would be filled (the hard way) this morning but I forgot about the "anxious buyer" - he who buys futures without regard to price in urgent manner whenever is needed.   Ironically a move to 1070 would not only of filled a gap from Nov 8/Nov 9 but this would of pushed us down exactly to the 50 day moving average, setting up for an excellent low risk bounce play opportunity... but that 'easy trade' never came.

Clearly S&P 1111(ish) has been the ceiling of late, and for now until some more folks "thankful" for any opportunity to get back into the market get us back over the 20 day, we're in the 20 to 50 day moving average band.   As I type this, buyers are already pushing the market out of this band and up, up, and away...

As for the Russell 2000 it is back in "not good" mode... once more the larger averages (NYSE, SP500) are masking a lack of follow through in the median stock.  This divergence continues week after week but has yet to "matter".

On a side note, the hedge we put on mid week betting on an increase in volatility is helping us out today... or WAS helping us out, but already giddy buyers are rushing into the market and the "what me, worry?" attitude is back.   VXX opened at its high and has sold off for 50 minutes straight... boo yah.

Long VXX in fund; no personal position

UK Telegraph: Greece Tests the Limit of Sovereign Debt As it Grinds Toward Slump

I've been reading quite a bit of handwring over Greece in the UK papers, and came upon this piece from one of my favorite writers, Ambrose Evans-Pritchard, early this week.  It was in the "to do pile" to put on the website, but I never got around to it.  It appears with events in the past 48 hours, there is no time like the present.

As you read this feel free to replace the word 'Greece' with 'America' and '2009/2010' with '2022-2025'.  If not for the fact the US still enjoys its role as the world's reserve currency, and has a central banker who has no qualms in throwing the savers of the nation under the bus to keep the mirage going, I would not be talking 2020s.  The US is playing the highest form of poker... but on current course, it only appears when, not if we're called out. [Nov 23, 2009 - NYT: Wave of Debt Payments Facing US Government]  Think it's impossible?  Tell me what you thought was impossible around April 2007.

• Greece is disturbingly close to a debt compound spiral. It is the first developed country on either side of the Atlantic to push unfunded welfare largesse to the limits of market tolerance. Euro membership blocks every plausible way out of the crisis, other than EU beggary.
• When the European Central Bank's Jean-Claude Trichet said last week that certain sinners on the edges of the eurozone were "very close to losing their credibility", everybody knew he meant Greece.
• The interest spread between 10-year Greek bonds and German bunds has jumped to 178 basis points. (it's jumped yet again, just since the article was published on the 22nd)  Greek debt has decoupled from Italian debt. Athens can no longer hide behind others in EMU's soft South.
• "As far as the bond vigilantes are concerned, the Bat-Signal is up for Greece," said Francesco Garzarelli in a Goldman Sachs client note, Tremors at the EMU Periphery.
• The newly-elected Hellenic Socialists (PASOK) of George Papandreou confess that the budget deficit will be more than 12pc of GDP this year, four times the original claim of the last lot.  (the United States of Debtors is now up to 13% of GDP due to "emergency measures to *save* the economy"... hmm, about 4x the normal range, imagine that)  After campaigning on extra spending, it will have to do the exact opposite. "We need to save the country from bankruptcy," he said.  (So the Keynesian theory no longer can work in Greece, even as it is "saving" the US)
• Mr Papandreou has mooted a pay freeze for state workers earning more than €2,000 a month. This has already set off an internal party revolt. "There is enormous denial," said Lars Christensen, emerging markets chief at Danske Bank. "They don't seem to understand that very serious austerity measures are needed." he said.
• Brussels says Greece's public debt will rise from 99pc of GDP in 2008 to 135pc by 2011, without drastic cuts. (US fast approaching 100% WITHOUT taking into account unfunded liabilities of Medicare and Social Security, at current pace just the budget deficit should be 200% of GDP by the end of the 2010s... again, putting our head in the sand regarding he unfunded liabilites which DWARF the budget deficit)
• Modern economies have reached such debt levels before, and survived, but never in the circumstances facing Greece. "They can't devalue: they can't print money," said Mr Christensen.  ("thankfully" we Americans can reduce the standard of living for our citizens by this action - all hail Ben) 
• Greece has long been skating on thin ice. The current account deficit hit 14.5pc of GDP in 2008. External debt has reached 144p (IMF). Eurozone creditors – German banks? – hold €200bn of Greek debt.

Key point below... by being inside the Euro Union, Greece was able to borrow far below where it should.  Instead of taking advantage of that, and paying off debt or realigning the economy, it squandered it by doing even more fiscally irresponsible behavior.  Sound familiar?  Just switch the phrase "by being inside the Euro Union" with "by having the world's reserve currency"....

• Athens squandered its euro windfall. For a decade, EMU let Greece borrow at almost the same cost as Germany. It was a heaven-sent chance to whittle down debt. Instead, the country dug itself deeper into a hole by running budget deficits near 5pc of GDP at the top of the boom.

And now they are in between a rock and a hard place... especially because they don't have their own central bank to "bail themselves out".

• Austerity may prove self-defeating, without the cure of devaluation. Greece risks grinding deeper into slump.
• .... the danger for EMU laggards is that the ECB will begin to tighten before they are out of trouble. It is German recovery that threatens to stretch the North-South divide towards breaking point.

Snap. Crackle. Pop.

• The EU can paper over this by transfering large sums of money to Greece. (works in America) But will Berlin, Paris – and London, also on the hook – feel obliged to bail out a country that has so flagrantly violated the rules of the club, not least by holding Eastern Europe's EU entry to ransom over Cyprus? That is neither forgotten, nor forgiven.
• During the panic last February, German finance minister Peer Steinbruck promised to rescue any eurozone state in dire trouble. He is no longer in office. The pledge was, in any case, a bounced political cheque even when he wrote it. Greece can assume nothing.