Tuesday, March 16, 2010

Bookkeeping: Stopped Out of Vulcan Materials (VMC) Short

Not surprisingly the never ending melt up is taking away some short exposure... as noted yesterday the advantage in shorting Vulcan Materials (VMC) was it was just below a very close by stop out point, in this case $46.00.  I gave it an extra 10 cents to provide me some leeway, and that kept us in for most of the morning, but the breakout in the S&P 500 has launched this stock, among many others I am sure. "Student body left trading".

The entry yesterday was $45.30, stop loss $46.10.  Hence we lost 1.75% on 3% of the portfolio - no big deal.

The only question is how much longer the other 2 shorts entered yesterday will stay alive.  I doubt much longer.

One of these days we are going to get the mother of all head fakes as everyone seems to be doing the exact same trade on the indexes, and they just are far too textbook.  But I've been saying that for about 9 months in a row, incorrectly. 

As I thought about the state of affairs last night, I think this market is discounting a "census filled", "make up for February snowstorm" jobs number that is coming in a few weeks (early April).  It could be +250,000 jobs (+100-125K census, +75K to make up for February snowstorms) and since no one in the markets other than economists read anything other than the headline number, the euphoria should be extreme.  This could be part of the explanation for the non stop move here the past month.  It will also make for a very interesting fall 2010 when the census jobs go away.

No position


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