Sequenom (SQNM) which we love fundamentally (see earlier post today) is now at it's early November peak - we will assume it stalls here and creates a double top (from which it would fall). If I'm right, we'll rebuy at a lower price; if I'm wrong (which never happens) we'll rebuy at a higher price.
I am cutting Sequenom (SQNM) down from a 2.1% stake to 0.5% stake, with sales in the $20.70s. The chart remains excellent so I want to reiterate, if this level of fantastic strength continues we'll be happy buyers at a higher price point. We'd want to see November highs cleared - the stock hit $21.02 on November 5th. So something like $21.50ish means this move has a new leg up (and as Ahnold says - we'll be back) But for now, with the stock up from $16 to $20.70s (30%) in 5 trading sessions we will take (most) of our marbles and shove it into our cash pile.
Again, I don't trust this market and the more I read about 2009 the more I am aghast at what is coming to this economy. For every "negative" story as I post in the blog, I read about 5 more that I don't post. Depressing stuff - but I want readers to realize what's coming down the pike. But that's Main Street and this is Wall Street which spins in its own alternative reality universe. For now the stock market is insistent to ignore everything - "it's all priced in and even if its not the Federal Reserve has our back". It's just a game of chicken - stick around talking about Santa Claus rallies and hope everyone else sticks around to so we can all create a higher market (Ponzi scheme). Frankly, the more I read the more I see everyone is counting on a Santa Claus rally which now makes me worried we won't get one after all. Too many people are expecting it. So we're going to take profits and lock them in (which we have done repeatedly the past two weeks) and keep building cash into the year end. Either reality hits Jan 1, 2009 or Jan 21, 2009 (day after inaguaration) - when reality returns we are going to make money on the short side - I think we have the chance for a serious wave down in the first few months of 2009 - it's easy to say "unemoployment is baked into expectations" and "states going broke is baked in" - I don't think so. It's one thing to say it's baked in but when unemployment hits levels people under the age of 45 have never seen in their adult lives, it's going to be another thing. Bond market continues to scare me. But for now we continue this charade as "bulls" ;) climbing a wall of worry - but "bulls" who are locking in profits every day as our stocks jump.These past two weeks have created many excellent trades, we are catching them left and right. But I don't want to be the last guy at this party which is based on dreams and hopes.
Long Sequenom in fund; no personal position
