Tuesday, June 29, 2010

Bookkeeping: Closing Valassis Communications (VCI)

Valassis Communications (VCI) simply seems to be the victim of student body left trading... when the market was benign or even going through the selloff in May, it was holding up well.  Now it seems unable to withstand the pressure.  Since I never really got the chance to build this position up, I let a nice gain in this one turn into a loss.  (I would have taken some incremental gains along the way, but my position size never grew large enough to bother)

With the stock below the 50 day I am going to part ways with the a 7% loss on the 0.6% exposure.  As always, of course this one can turn right back around and rally, but the greater probability now lies with failed rallies and more downside as support is broken.

As an aside, we are being held up at S&P 1040s level which everyone and their mother knows is support.  Again, my conviction is, it will not hold this time so I've bought some downside hedges (just some light SPY puts for now).  The same traders who were buying aggressively on the long side in the S&P 1080s Thursday on Realmoney.com now say today is a "washout" and we can buy again.  I disagree again.  This time the bounce off 1040 is going to be an opportunity for shorts IMO.  Like a broken clock eventually this cadre of traders telling us to buy here, there, or everywhere is going to be correct.  But gosh, quite a bit poorer by the time they are 'right'.

[May 25, 2010: Bookkeeping - Beginning Valassis Communications]

No position

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