Bookkeeping: Cutting some Solar Exposure

Cutting back on 3 names in the solar basket as they all have the identical chart - broken down stocks that just surged 10%+ to the first resistance area, the 20 day moving average or close to it. Yingli Green Energy (YGE) was the only one of the 3 to push through. Instead of focusing on any 1 of these very volatile stocks I've changed tactics the past 8 weeks, and created a basket and consider them to be "one stock" especially those of the Chinese variety because that seems to be how the market treats them, despite their obvious differences. I have not touched Energy Conversion Devices (ENER) because its one of the few stocks in this market holding its 50 day moving average through thick and thin.

For Trina Solar (TSL), Canadian Solar (CSIQ), and Yingli Green Energy (YGE) the plan is identical - either buy back on a retrace to lower levels and or pay up if this is indeed a "real move" over and above the 50 day moving average. I'll post one chart - but they all look very similar.


Crossing north of the 200 day moving average would signal real strength but for most of these stocks, that level is located in a different universe. All this weakness must be due to all their exposure to subprime mortgages - that's the thing with this market - 100% growth at 15 PE ratios don't even protect you - every stock has subprime exposure I guess.

As a "basket of 3" I've cut these from 4.0% to 3.1% of fund. Despite what I assume must be breathless excitement on CNBC all we've done this week is get back to where we closed Friday in the markets - one huge day down, one huge day up ... and that pretty much summarizes the random walk down Wall Street of late. Nothing changed in 24 hours except Merrill signaled to the rest of the financial system you have some huge write downs coming. And that is "good news" because it's now clear that the end of the write downs are here (for the 98th time). No conviction, no direction. Until we get north of S&P 1275 we are going nowhere fast. I continue to build cash in every stock that rallies that shows the "broken" formation above. One day these stocks will continue to chug upward and going to cash will be the "wrong" decision, but when a real sustained move happens, we'll miss the first part and catch the rest of the move.

As I keep saying, until a trend forms that lasts for more than 3-4 days this is a market only for daytraders. I do expect Thursday to bring "excitement" as I am sure the Gross Domestic Number will be "better than expected" and then Friday is the random wild card that is the useless labor report.

Long all names mentioned in fund; long Trina Solar in personal account