I am using 2 proxies - Google (GOOG) and the S&P 500. When the former fills its gap (remember I said it was an excellent short in the $540s range) at $460, or the S&P 500 falls to 1170 we'll deploy more to the long side. S&P 1200 will be a psychological level that should provide some interim support but it's just one of those "round numbers" that doesn't mean much in reality. S&P 1170 takes us back to October 2005 levels; and kills off nearly 3 years of gains for all those index fund fans. I'm remaining patient so I have some cash to deploy once the turn really happens - keeping the lessons of January 2008 in mind. We have about 14% short exposure (I added a bit on that nonsense spike yesterday morning) - I'll liquidate that and start to turn more long once we start to see those washouts named above.
I'm looking to add to either our best of breed names at the top of the portfolio or some of those Haynesville natural gas plays when/if we reach either of these levels. I might even go and get some Google (GOOG) back into the portfolio @ $460. I guess seeing the Haynesville natural gas plays fall hard would be a "3rd tell" as well. [Jul 9: Haynesville Natural Gas Plays Refuse to Sell Off]
The inability to short individual names is simply killing me - so many opportunities we have named but cannot take advantage of. :)
7 comments:
The volatility is just insane. CLF - down 7% today to $105. Still above its price of 94-98 last week. Someone is making huge amount of money here trading the market. This is a nice trader's market. Where do you see companies like MEE, ANR, MTL, WLT, CLF headed? It seems we're over-weight with Coal and Mining stocks. These will probably correct some more in the near term, but should still do very well in the next 12-18 mos I think.
Also, S&P 1170? eeek...haven't seen that in a long while.
Nothing is immune in the last stages of panic - natural gas, coal, and fertilizer included.
I'm not worried about their long term prospects. And if we get to 1170 I'll be converting the short exposure into purchases so I do hope they sell off.
yea goog is a screaming short. only crazy thing is their earnings, which could throw a wrench in things and pop that thing either way (fill the gap or gap back up).
i've got an options strangle on that badboy 560 calls and 480 puts. bought it yesterday when goog breached 520 to the downside. fully expect earnings to be the catalyst to fill the gap. but either way you've gotta be hedged to go into earnings so this is how i'm playing it.
oh btw MOS sold the saskferco nitrogen segment. 1.6B was the price i believe. sorry dont have any links right now it was just in the news segment from my streaming quotes
I started to buy SSO from 59, then 58, 57, 56, 55 and I got it for 54 today...amazing. Hope this is the end.
Oa,
when anything "Ultra" works against you, it is not a pretty site. But excellent for trades - you just have to scale in them, in and out. They can be quite vicious.
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