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Monday, March 3, 2008

Hit Low End of Our Recent Range

Posted by Mark at 10:23 AM TweetThis
We hit the low end of our recent range, S&P 500 went to 1322 (1320 has been the floor of late) so I lightened up across all my Ultrashorts, anticipating a bounce. If we break back down below this key level to say 1315 or so I will buy these positions back at slightly higher premiums and await a more frantic selloff.

I have done some purchases this AM of $4-$6K variety in names that were hit 3-5% or fell to some support levels: fertilizer name CF Industries (CF), Indian copper Sterlite Industries (SLT), Indian bank HDFC Bank (HDB), Brazilian oil Petrobras (PBR), and Chinese solar LDK Solar (LDK). I still am wary of the solar business but the sell off in LDK Solar is simply overdone. The other names I have more confidance in...

Again, if this bounce is not true, I'll be remounting the short positions I sold off Friday and this AM. I am now at my lightest short exposure in a long while. I guess Buffet-palooza didn't say anything to make the market happy. Let me emphasize every time we test this sort of level on the chart, we are at a potential inflection point. So it is the time to be most flexible. If this level holds, one turns short term bullish; if it breaks one turns bearish. All due to 10 S&P points, one way or the other. My cash position is very high now so I await the outcome.

Commodities continue to be on fire...I continue to feel I don't have enough...

Long all names mentioned in fund; no personal positions

Posted by Mark at 10:23 AM Comments (6) | Edit This Post | Create A New Post

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6 comments:

Raphael said...

I guess this story is what drives LDK down today. http://tinyurl.com/2jnxz9

March 3, 2008 11:48 AM  
Raphael said...

Upps, just realized this issue is around for quite a while. Not following this stock closely.

March 3, 2008 11:59 AM  
cm202bc said...

OT: I lurk on the Yahoo STP board, so I know you have been interested in the impact of the recent Chinese weather on crops. This comes from an American acquaintance that teaches at a University in Nanning, southern China. Climate is described as tropical.

"The cold spell has ruined a significant part of the
winter crops so that food prices are predicted to rise
further. We have seen this in the local market.
Students have returned to campus from their vacations
with first-hand accounts of what the weather disaster
did in their hometowns. One girl, whose peasant
family grows sugar cane, reported that the cold had
severely damaged and stunted this season＊s crop,
which will have a big impact on her family. It is not
clear whether she will be able to remain in the
university. Another student from an orange-growing
part of this semi-tropical province told of oranges
turning black on the trees, just a week or two prior
to harvest time. The entire crop was unsalvageable,
not even for juice or animal feed. The peasants in
that village will probably leave the village to seek
employment in an already overloaded labor market. The
government had promised that food prices would remain
stable during the Chinese New Year holiday, which they
did 每 pretty much. Now the pressure is off and
prices 每 not surprisingly 每 are going up."

The website of the provincial government carries a brief statement regarding "enormous direct economic loss." Grain production comprises 2/3 of the provincial acreage, tho I cannot find the specifics on what types are grown or how they take the cold. Reports began to hit Western papers in the last few days of January, DBA has risen about 13% since then. I would guess a substantial increase in Chinese imports are not yet priced in.

March 3, 2008 12:48 PM  
TraderMark said...

Raphael, I am amazed how many times LDK can go down on the same piece of news. This stock has been my personal demon; lost a lot riding this one for the fund. Can't believe it's under 20x trailing earnings for this type of growth. I seem to be a sucker for pain with LDK - the chart is atrocious.

March 3, 2008 1:40 PM  
Wan said...

LDK chart is bad

March 3, 2008 2:01 PM  
TraderMark said...

bad is an understatement; as I wrote above I prefer atrocious.

Case study of why not to buy falling knives, but the siren call is so strong on this one. I like to offset all my gains by losing on TSL and LDK ;)

March 3, 2008 3:47 PM  

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