Tuesday, June 15, 2010

Bookkeeping: Short Celanese (CE)

This rally has finally starting waking up some of the stocks on my limit short list and got them moving up.  Celanese (CE) has a fantasticly low risk short set up as it has been slapped back each time it rallies to the 200 day moving average the past 6 weeks.  Obviously in 'student body left' trading if a V shape move is afoot all shorting will be mocked, and buying anything (with a dart) will be worshiped.  It does not seem to be so much about individual equities anymore as I have written non stop for a few years.  That said, since the market is moving in such extremes - with much of the movement overnight, I'd rather use individual stocks as hedges for now.

I have a nice entry of $29.01, and I'll only risk a 1.5% loss with a stop out @ $29.45.  (1.5% allocation)  It either breaks over the 200 day moving average (and 50 day) or does not.  It's as simple as that.

Since my 'short book' has filled nicely the past 24 hours, I will consider adding some long exposure in individual equities a bit more aggressively but until we get over S&P 1120 I will focus on the index plays - since once again so much of the movement of late is violent, news driven, and/or overnight. 

As for index longs I added on this break over 1108, I am hoping for a big squeeze of shorts into the close in the remaining 30 minutes so I can dump much of it.   Then if the economic data is "good" tomorrow I'll jump back in over 1120 but frankly the market is up almost 70 straight points so we are switching from oversold to overbought right quick!  (just a note, I am using JULY SPY calls, not JUNE for my index speculatio since the latter expire in 72 hours)

Short Celanese in fund; no personal position

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