Wednesday, March 10, 2010

Bookkeeping: Closing Potash (POT) - Will Look to Deploy into Another Commodity

I only have 2 commodity plays and I am disappointed in the relative performance of Potash (POT) of late.  I had mulled moving into an iron ore (CLF) stock or coal stock over the past month and in retrospect that would of been a very smart thing to do but missed the boat.  Considering the price increases announced lately in those spaces, the potential for very nice upside in earnings is strong while the fertilizer market is more or less ho hum right now.  With that said, the stock of CLF is up 50% in a month so it's not like the market has not re-adjusted the price of the stock accordingly.  I appear the last person on Earth not to chase into these stocks, but for now I will sell the small amount of Potash we have left and either buy a coal or iron based stock in the future to replace it.

There is nothing wrong with the Potash stock here either - just more of a strategic decision for the intermediate term.

As for the greater market we are right back to where it was around 2 pm yesterday, over 1140 and making a move towards 1150.  I will be putting on the same trades as I did yesterday on the indexes with the same strategy - stick with it until / unless S&P 1140 is broken.  Sell at 1150, rebuy it all around 1153 if and when.  I was unfortunately whipsawed out of my positions yesterday but that happens.  Volume finally picked up yesterday but only because the "bailed out babies" were running - Citigroup, AIG, Fannie, Freddie.  Normally when stocks like Fannie and Freddie start ramping up in volume you have yet another red flag, but this market could care less about flags, unless they are green.

No positions

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