Bookkeeping: Ringing the Register

I don't have anything earth shattering to report on these sales, I just want to build more cash and lock in more profits in my layer in, layer out approach. These are names I have not taken any profits on of late, so I am going to begin now. Mechel (MTL) always seems to lag the other domestic names in iron/coal etc by a few days, so its finally making its move, so I am taking a bit off here; same with Cleveland Cliffs (CLF) which despite an "ok" quarter jumped post earnings - it seems people are willing to excuse any bad results in anything in the steel (or related) sectors at this point, and a bit off National Oilwell Varco (NOV).

I reversed this week's earlier buys of Potash (POT) and Mosaic (MOS) for small losses (yes I'm a flip flopper - the charts looked ready for a breakout but now are looking more iffy). I still see that gap at $110 on the Mosaic chart and thing we're going there. The ag charts just act tired as if they need a "cleansing" sell off - I could be wrong, just a gut feel. They still have the best fundamentals bar none - but the hedge funds want to sell them now, so you have to respect it. We'll be buying in scale on significant pullbacks.

I remain bullish on all these names, but we haven't had a "scary" type of selloff in a long time in the commodities area so I think that could remain a possibility. I'm also looking for a broader correction in the general market, at least to S&P 1370, or upper 1360s. We have now run out of multinationals earnings to cheer about and unfortunately are stuck with a bunch of companies that rely on Americans. Boo. Hiss.

As for retailers... well you know the story we have been advancing since last fall - the pooring of America continued - Walmart (WMT) BJ Wholesale (BJ), Costco (COST), Big Lots (BIG) win - most everything else loses. Either the deepest discounters or the warehouse clubs remain the main winners. Again let me stress same store sales or any retail figure does NOT take into account inflation. So if a store reports 3% same store sales and most of their products are going up by 5-10% (read: food) that means unit sales are falling. So by nature of inflation alone same store sales especially in food (or gasoline) must rise just to stay flat. Walmart is now turning into a de facto grocery store as are the warehouse clubs. The middle and lower class continue to get beaten over the head with a club. Don't buy the hype of "better than expected store sales" spin. These Q3 and Q4 estimates for most in this group are so off the mark (way too high) it's going to bring some serious pain later in the year when reality is faced.

Interesting fact 1: (on how wrong analysts are in their Kool Aid) Perkins estimates earnings for the industry will decline by 14.9 percent, compared to a projection in January of 5.3 percent profit growth (for you Get Smart fans... "Only missed it by that much") Just imagine how wrong they are on the back half of the year. ("it's all priced in though")

Interesting fact 2: (we touched on this a month or so ago - retailers are now seeing sales surge around payday and then tail off around the end of the next pay period as people literally run out of money) In a statement Thursday, Eduardo Castro-Wright, Wal-Mart Stores U.S. president and CEO, said the "economy continues to get tougher" and that customers increasingly are unable to stretch their dollars to the next pay day. "As money gets tighter for them toward the end of the month, sales drop more than we have seen in the past," he said.

Long all names but the retailers in fund; long Mosaic, Mechel in personal account