Thursday, September 16, 2010

Bookkeeping: Covering Texas Instruments (TXN) Short

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I am very unsure of the market direction here... we are overbought and almost all the positive action right now is in large caps (or precious metals)... whereas I am seeing some weird blow ups in random spots in small and mid cap world.  The yen trade got blown up by intervention and the bond trade is not working out like I had hoped.  We are stuck in S&P 1116 to 1126 and it is 50/50 which way we break out.  A break over 1131 would bring in buyers en masse, but that is so obvious - so will it be that simple?  Yet we have two gaps below at 1110 and 1090.  Overall I am confused ... no shame in that.  Sometimes the market whips you into a pretzel and sometimes it feels like you can do no wrong.  I feel the same as in mid March - mid April when the market remained overbought for 4 weeks and could not selloff no matter what measure said it should.  Until finally it did, late April.  It will get easier eventually but right now I paint myself perplexed.

Texas Instruments (TXN) has gone nowhere from where I reshorted it earlier this week, but ... it's looking a tad bit better on the chart now, especially if it closes where it is trading as of 2:10.  This is another 50/50 outcome and if the market breaks up, it will go with it as it does not have the overhead issues it was facing a week or two ago.... or as many.   I am going to get a little bit smaller (less exposed to the market) until things become less murky.  I am covering for "flat".



I also cut back my TNA/BGU shorts by the same amount I increased them earlier this week - they remain very small positions that I do not believe can be expanded until we break below S&P 1116 or a "fake out break out" over S&P 1131 happens.  TNA is actually having a bad day because while the broader market is buoyed by large caps, small caps are being harassed. (actually seeing how bad small caps are doing today, I cut TNA short to near nil)

Short TNA/BGU in fund; no personal position

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