Bookkeeping: Morning Transactions

The S&P 500 continues to hang around the all important 1270 level even with all the forces aligned against it. Quite amazing to watch. In one respect with last night's move the Federal Reserve has now essentially put the call out they are willing to backstop all the investment bank assets; this is probably saving Lehman Brothers (LEH) from falling off a cliff as it appears the next to potentially go. Ironically, this selloff is nothing like the one in mid January due to our favorite rogue French trader, although the news flow now is a lot worse. I almost pulled the trigger on buying Goldman Sachs (GS) here in the $145 range which is the area I have been targeting but with earnings tomorrow and a potential $3 billion writedown expected I still took the conservative route.

If/when the S&P 500 breaks 1260 or so I will add more short exposure, but for now I am selling off about 8% of my 20% Ultrashort exposure - selling across all 6 names I hold due to the relative strength I am seeing. I was using 1265 as an earlier bogey but with the extreme volatility and news events I am widening that price target to a bit lower. I said many times that S&P 1270 will be defended with all the King's Horses and all the King's Men and all the firepower spent since last Tuesday with multiple historic Federal Reserve moves shows this. Once again let me stress, if we break below 1260 or so I will buy back all these positions at higher prices as this would mark a new leg down. We just don't seem to be able to put in that washout bottom with all this interference...

I am buying, again in layers of $4-$5K, and hoping for even lower prices - but I have to say this is some sort of resilience. I am focusing on companies either based overseas or with customers mostly overseas ... avoiding the US as usual. Or a focus on commodities.

1. Indian copper Sterlite Industries (SLT) @ $17.80s, down 6%
2. Indian bank ICICI Bank (IBN) @ $35.50s, down 11% (just opened a NYC branch!)
3. Indian bank HDFC Bank (HDB) @ $89.30s, down 6%
4. Fertilizer CF Industries (CF) @ $110s, down 4%
5. Fertilizer Mosiac (MOS) @ 103s, down 3%
6. Solar Trina Solar (TSL) @ $29.10s, down 5%
7. Coal Arch Coal (ACI) @ $42.70s, down 5%
8. Coal Consol Energy (CNX) @ $65.30s, down 5%
9. Brazilian oil and exploration Petrobras (PBR) @ $104.30s, down 4%
10. Brazilian homebuilder Gafisa (GFA) @ $34.30s, down 4% (this was actually a larger buy as the stock was nearing 200 day moving average)
11. Bulk shipping DryShips (DRYS) @ $56.90s, down 4%
12. Chinese drug outsourcing WuXi PharmaTech (WX) @ $22.40s, down 6% (this replaces the batch I sold post earnings last week)
13. Chinese travel Ctrip.com (CTRP) @ $49.90s, down 5%
14. Iron ore Cleveland Cliffs (CLF) @ $114.50s, down 3%
15. Russian iron/coal/steel Mechel (MTL) @ $129s, down 5%
16. Crop commodity, Powershares DB Agriculture Fund (DBA) @ $40.10s, down 3%
17. Infrastructure Foster Wheeler (FWLT) @ $55.70s, down 5%

Similar to last week, if these stocks rip higher on tomorrows .5%, .75%, 1%, 1.5%? 3%??? Fed cuts I'll be cutting back. Simply put there is so much liquidity being thrown at the system with so many Federal mandated backstops in the financial system, you have to be willing to buy some short term Kool Aid. But free markets, as we've been saying for months, in the US are truly a joke. When push comes to shove you see the hypocrisy - a country that tells other countries in finacial crisis to not interfere and let free market forces take over, takes the exact opposite tact itself.

Again, S&P 1260-1270 is a key area. Will be watching that area. I still am stunned we are not seeing any sort of real selloff with all this bad news... the belief in the power of the Fed in this country is quite amazing. I am keeping ready cash ready to apply to the short side if we ever get to reality. But in the meantime, I'll suspend disbelief and try to make some money.

Long all names except Lehman Brothers, Goldman Sachs in fund; long Mosaic, Foster Wheeler, Trina Solar, Sterlite Industries, ICICI Bank, Gafisa in personal account