Wednesday, August 25, 2010

Bookkeeping: Covering Global Payments (GPN) Short Out of Boredom

I figured Global Payments (GPN) had low beta, but this is ridiculous.  Despite a big swoon in the markets my "hedge" has been effectively useless the past week and a half.  I am walking home with a massive 1.5% gain.  While the chart is still poor and the setup "good" for a breakdown, the volatility in this stock is non existent so I am going to cover and attempt to find something which will actually provide some benefit during downturns.  This was my first foray with the stock long or short - I assume it will be my last.

I was looking/hoping for something with action more like this so I'd actually have a true hedge helping me out:

Don't forget there is still an upside gap at S&P 1067 we need filled.  It actually would be funny if weekly claims fell to 485K and we celebrated that with a gap up tomorrow.  Four weeks ago that number would have been considered awful.  But anything below last week's 500K can now be called "2nd derivative improvement".  Or maybe we can use the revision of GDP down to 1.6% as an excuse - still pathetic but better than worse case estimates of 1.3%.  Another alternative is Bernanke's left eyebrow twitching during his Jackson Hole speech, and obvious sign to markets QE2 is coming and it will be huge.  Any excuse will do. ;)

As I wrote earlier today we are in between some very obvious technical levels - look at those computers take the market right from 1040 to 1057, almost to the decimal point.

No position


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