Friday, January 25, 2008

Bookkeeping: Trimming Some Positions

Posted by TraderMark at 9:49 AM TweetThis
Well we are having quite a day today - where the action underneath the indexes is far more positive than the indexes indicate. Essentially all we are doing is making up a lot of lost ground... ground that we had no right to lose in many of these names in my opinion. So making up for "panicked" times. But apparently all the fears are gone just like that. What I am essentially doing today is selling down some positions to raise cash; positions bought during the panic lows and now locking in those profits.

At this point, as mentioned yesterday, these long positions have been so unfairly beat down I don't want to liquidate too much since they can rebound quite a bit just to get to fair value - which appears to be happening yesterday and today. If we have 1 more day like this Monday I will become more aggressive. Next week we have aside from Fed meeting the "all important" monthly jobs number Friday - a number that is useless but definitely moves the markets. Jobs are a trailing indicator plus in this specific report the birth/death adjustment can move the report 100-150K in any direction anyhow, so I don't take any stock in it, but since the market does, you have to be cognizant of it.

Again my transaction rate is going to be increasing in the near term as I believe we are simply setting up for another fall, so I am going to simply continue to sell off bits and pieces into these rallies.

I've taken some profits in Mosaic (MOS), Potash (POT), Consol Energy (CNX), Mercadolibre (MELI), Blue Coat Systems (BCSI), Peabody Energy (BTU), Riverbed Technology (RVBD), and Research in Motion (RIMM)

When all is said and done I will still be keeping the fertilizer names at the top of the portfolio, just in smaller scale than they currently are - as we saw this past selloff, nothing is immune in panic - even the best sectors who are recession proof. Hence I don't want to walk into a buzz saw with a 9% allocation in Mosaic (MOS). Last, I am assuming we will sell off - I certainly could be wrong on that too, and the "bottom is in" etc etc. But until we make new highs over previous highs I will continue on this assumption.

I'll continue to look for candidates to trim today through Tuesday.

Long all names in fund; long Mosaic, Potash, Research in Motion in fund

Posted by TraderMark at 9:49 AM Comments (5) | Edit This Post | Create A New Post

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5 comments:

T-Rader said...

Wow... talk about selling into a rally. I guess everybody has the same idea. I should have dumped those MSFT calls at the open. Oh well.

Hey so what are your thoughts on the rumors that the futures being down huge on Monday was caused by Societe Generale unwiding the damage of some rogue trader causing the FED to make an emergency cut.

January 25, 2008 11:23 AM  
TraderMark said...

Doesn't make much sense to me considering the China bank disclosure that they had subprime exposure was the thing that caused Asia to melt down 7-8 hours earlier. I am sure its possible it could of exaggerated the move though if its true but I also find it inplausible that 1 trader could lose $7 billion. It sounds like a cover up for something else. Risk controls cannot be that bad in any major bank..

I think the whole market is quite nervous and I still hope for a more meaningful move up. But just in case I don't want to be caught so poorly positioned as I was the past 1.5 weeks. Which I am sure is the same for many others. If I look at chart after chart, what I see now are stocks that had broken down to near their 200 day moving averages quickly in 2.5 sessions rally to just under their 50 day. I can see this in about 20 different positions in the fund. Now the question is do they fall back? Or burst through the 50 day and move upward? THe most likely scenario is retreat but who knows. Sadly market timing is half the battle in this environment since fundamentals are quite ignored. But you can see what stocks are ramping hard once the market has any sort of semblance of normalcy so its good to see these stocks rebound so well. At least confirms people want to be in these stocks when the coast is clear. Question is, when will the coast truly be clear?

January 25, 2008 11:39 AM  
T-Rader said...

I was expecting a sell off today but not until the latter half of the day. I thought the good earnings from MSFT, CAT, and HON would drive a small rally, not a sell off.

What is going on with MHS? I know they just did a split but it hasn't been participating in the rally at all.

January 25, 2008 11:59 AM  
TraderMark said...

The day to day gyrations in the market are just very hard to game. No one really does it successfully over the long run - but it doesnt matter most of the time, but in periods of huge angst or for daytraders it does matter.

Not sure on MHS, I cut it back to a tiny position - MO Is also stinking so I assume now that all recession fears are taken care of these stocks are useless? lol. I saw ESRX which is MHS peer was weak before MHS weakened. Maybe something in the industry. Thats the problem with safe havens - they all have their own specific issues.

January 25, 2008 12:18 PM  
hieunguy said...

Mark,

You are very lucky with today action, part of it is because your holding is in the best sector, everybody is position on these same names, so they can rally to the 50 days, the next trip down, these name will have a brutal haircut. Look at the metal sector, like FCX, PCU as a roadmap for pot and mos. Another poster have this point on another blog that i find very accurate after reviewing many charts.
"All large down moves begin with a compact top a 5 point reversal with a subsequent breach or probe,followed by a euphoric rise back into the neckline area.This rise gives way to collapse .The key is not in looking at the averages but individual stocks that were in blowoff tops ie leaders such as GOOG,AAPL,RIMM,GS,DE,BA,3M ect.There charts embody the outright speculation found at great tops as in 2000 in the Nasdaq leaders."
Think about it and let us know, if your current plan is good enough for this environment.

January 25, 2008 7:11 PM  

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