North American
potash producers were left with a record low inventory of
825,000 tonnes of the fertilizer at the end of August, an RBC
Capital Markets analyst said on Tuesday.The month-end inventory was down 21 percent from the end of
July and 33 percent below last year's level, said Fai Lee in a
research note, quoting industry data."Given tight potash supply conditions and strong
agricultural fundamentals, we expect potash prices to remain at
elevated levels," Lee wrote."The latest inventory data is consistent with industry
reports that recent visitors to the Port of Vancouver have
indicated the potash warehouses were 'effectively empty'," Lee
wrote.
But for now, US homebuilders are the new fertilizer - so I'm adding to Lennar (LEN) just under $13 to make this a 5.5% position. Remember this is just a trading vehicle - we have no belief in any imminent housing rebound but the market still does. Basically it's my "airline and homebuilder and the consumer is back" trade in one stock.
Sequenom (SQNM) has the first stage results of its large scale Down Syndrome's test next week and I expect it to be very bullish - it has pulled back to its 50 day moving average of $20. I'm buy right above it and taking this to a 3.8% stake
I almost bought PNC Financial (PNC) as a proxy on banks (great chart) Wells Fargo (WFC) is also now the "golden child" and the chart is unbreakable- instead I am adding to Ultra Financial (UYG) as a trade. Believe it or not, some commercial banks have among the best charts out there. I don't usually break out the hedge ETFs as trades but since this will be a very large contrary buy I am listing it here. It is now a 5.2% stake up from 0.6%.
I've cut back my short exposure materially (for now). I'll add it back if we go below S&P 1165. We're ping ponging back and forth 1165 to 1175 all day. It must break one way or the other soon.Remember, I've cut back the number of positions significantly over the past month, with a selling climax last week - this way it is easier to manage and I can make the positions I keep of larger size. This is a trading environment not an investing environment, so everything is now a trade. Easier to do with a lot less positions on the book. If the market collapses here, it is a lot easier to get out of a handful of positions than 15. But considering I want to turn off the computer and not look anymore, that strikes me as contrary - so I'm buying. (cognizant I can be wrong and have to reverse course quickly - admitting defeat is key in this market)
Long all names mentioned in fund; long Ultra Financial, Sequenom in personal account
6 comments:
Does everything that tanks one day somehow reverse on the next (and visa-versa). I'm beginning to play with my "investments" based on that strategy.
Is this the same reasoning you are using for buying uyg?
Thanks
if it were that simple we'd all be millionaires.
I like the charts of the former two and the latter is just a contrary play
I suppose if Morgan and WaMu and Goldman go out of business in the next 3 days it could be a bad move. We'll see. UYG is only 16 points away from zero so the downside is limited ;)
Ballsy move! Good luck. I also like UYG here.
Well we've had two 4% down days in a week. The world could be ending. But that's still the low probability outcome. Even for a pessimist like me.
By next Tuesday the short sellers will have to locate their stocks so it will be interesting to see where we are a week from now. I expect a lot of small caps to lift. Maybe not tomorrow but within a week.
I could be wrong but it sounds like the basis is: a big drop leads to somewhat of a correction. I'm going to write a book on that strategy and make lots of money - until people decide that fundamentals actually matter.
Link,
Well there's been a big drop across the board so you could start looking for 'value' in companies that have good fundamentals. I've been doing that and have been taking it on the chin in the short term. Unless we are in an end of world scenario fundamentals will eventually rule the day again.
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