I added to
- Mosaic (MOS) [replacing the portion I sold Friday]
- BHP Billiton (BHP) [replacing half I sold Friday]
- Ocwen Financial (OCN)
- Potash (POT) [replacing portion sold early last week]
- James River Coal (JRCC) [replacing portion sold middle of last week]
- AeroVironment (AVAV) [I had cut this to a 0.2% stake on the strength Friday so just replacing half of what I sold]
- HDFC Bank (HDB) [I had only a 0.1% stake going into the day so its back to the lower end of a recent range]
To offset this I've added about 3% in index shorts - still shaking my head I came into the week with sub 10% short exposure; mother market smirks at me.
Both the Brazilian ETF (EWZ) and the Chinese A Shares (CAF) are back to support - so those are intriguing plays down here; if you are a believer in the Chinese miracle this is where you'd want to make a stand. But once again it shows you - you simply cannot buy breakouts in this market because they are reversing so quickly. I cannot stress how counter intuitive this is - "signposts" that we used to trade on no longer work.
Missed opportunities include gold/silver and that short on Mobile Telesystems (MBT). Capital One Financial (COF) is an amazing chart of death.
I'm incredibly intrigued to see if the market completely ignores Obama's "savior" speech on housing tomorrow.
Interesting note ---> The S&P is down about 28% from the 200 day moving average. 25% used to be "extreme" divergence. (i.e. buying opportunity for "reversion to mean" aka snapback rally) We hit an all time peak of 37% on that dark day in November 2008. So depending on where you sit we're either at an extreme (based on historical averages) or have a chance for another 8% down to match the new "normal" extreme. Food for thought.
Long all names mentioned execpt EWZ, CAF, MBT in fund; no personal positions
4 comments:
Going long as well today on two of your positions, on the other hand, I'm long on MBT as well with an entry point around 21 :)
Do you think the likely Stanford scandal will have a fallout on the stock market in the coming days ?
http://online.wsj.com/article/SB123489071311201021.html?mod=googlenews_wsj
MBT is probably a good long here, its got a heck of a volatility curve to it! great for traders.
I have yet to really look at the story but I am sure as more of the tide goes out the more naked swimmers we will see. Madoff, for its size, was actually absorbed quite well by the market.
That said, its just another nail in the coffin to the individual investor thinking this whole stock market thing is a scam. As Obama says, we have lost our adult supervision in the "let them regulate themselves" attitude....
What about averaging into copper and steel? Copper prices seem to have bottomed.
Maybe NUE for steel since you get US stimulus dollars heading its way.
The market trades all commodities in a complex - as I wrote last week when I created new positions in BHP and Mosaic - I have archives by topic in the right side of the blog - I treat this as "1 position", because that's how the market does it.
When coal is hot, they move up copper stocks, which moves up fertilizer stocks, which moves up steel, which many times moves up dry bulk shippers and infrastructure stocks. It's "horde trading" as I call it. So basically I sprinkled some dollars into each of the 4 "commodity" stocks. You can pick another 4 and they will probably all move together en masse.
I like agriculture the best but really the way program trading is nowadays its all the same. BHP gives me some exposure to base metals. I'm not ready to get on the steel bandwagon here with cars in such bad shape.
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