Monday, November 16, 2009

Bookkeping: Stopped Out of E-House Holdings (EJ) Short

We continue to live in a student body left trading environment; the same since summer 2008.  Trying to short anything is just about as fruitless now as going long anything for much of latter 2008 and early 2009.  It's like stealing candy from a baby... except you are the baby.  Long - short strategies are all deemed useless.  Going "all in" is the only way.

We put a short on E-House Holdings (EJ) last Tuesday as our one sacrificial lamb and the market came and took our candy away, as our stop loss was triggered earlier today.

Since we are so lacking of short exposure, I thought I'd give it the college try since we have a low risk entry here.  I've put on roughly a 3% short position around $19.50.  We'll give this a 5% berth in terms of stop loss, which would also be a higher high than we saw this morning, i.e. $20.50ish.

And so we leave her; with earnings out tomorrow it is best this happened since we don't want to take the lemming risk.  Could be +/- 15% this time tomorrow.  On a relative basis this was a "win" as so many stocks have rocketed the past week while EJ has been butting its head against resistance and then constantly turned back.  But today, a rising tide of Kool Aid was strong enough to lift even the weak boats.

As for the greater market, it is  up every day but 1 in the month of November.  We are all geniuses here... I feel even smarter than I did in 1999 when I could buy any stock on NASDAQ and beat my chest.  Now the index is irrelevant, I can be a genius in any market; heck it doesn't even have to be stocks anymore.  Thanks Alan Ben.

I continue to hang out near the emergency exit door while amazed at the quantities of Kool Aid being drunken.  Even more amazed is as each punch bowl empties, a bearded fella in a suit shows up with a new barrel.  But as we take out layer after layer of (ahem) resistance... we have to keep moving up mental stops and not stand in front of a freight train.  Being intellectually correct in due time will be useless if we are flattened like Wiley Coyote.  Unless / until we take S&P 1100-1003ish back out to the downside... you know the drill.

Long E-House Holdings in fund; no personal position

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