Friday, October 22, 2010

Bookkeeping: Transactions in Baidu (BIDU), Riverbed Technology (RVBD), and Acme Packet (APKT)

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The POMO/QE2/WEAK DOLLAR meme is everywhere - I have never seen the market discount the same information (that everyone knows) over and over and over.   At some point news everyone knows is not supposed to cause the same action... strange days.

I am making some transactions this morning...

1) Riverbed Technology (RVBD) surged out of the gate and is up 13% 14% 15% 16% on the open.  I am selling about 1/3rd of the position into the euphoria.



2) To replace Riverbed Tech exposure in 'networking' I am restarting Acme Packet (APKT) which I sold a few weeks ago when it broke support and I thought the general market was ready to roll over.   Obviously the market held on, and Acme Packet has staged a tepid rebound... frankly the chart looks identical to Riverbed pre earnings report.   I am only creating a 1.1% exposure since the company reports next week (28th) - this way if it disappoints my position size is not terminal.



I am also keeping an eye on F5 Networks (FFIV) but it still looks challenged, although perhaps improving today.



3) I added back what I sold yesterday ahead of earnings to Baidu (BIDU) ... I'm "chasing" it here, but my long exposure is low and it is either going to form a 'double top' here or begin a new leg up.  With the market so overextended you would think double top (bearish) but I am going against my gut, and act George Costanza and buy.



Other than that I am waiting to put on the same trade as I did yesterday - that is buy SPY calls on the 'breakout' over 1184/1185ish - based on POMO history we should get a surge a bit after 10 AM as manipulated 'free markets' reign.*  Again let me come full circle on this piece - when EVERYONE knows something in the market, it is not supposed to work anymore.  That's how it used to work anyhow....this is like Wiley Coyota buying stocks in egregious manner, knowing the Acme Co. anvil is going to fall on our head at some point, but not knowing when the Road Runner is about to unleash it.

*if POMO does not do the trick, remember during this run (and much of 2009 and 2010) everytime we struggle with technical resistance as we are now, it is usually surpassed in premarket on a Monday morning - hence we have a great set up to get through 1184/1185 on "Mania Monday".

Long RVBD, APKT, BIDU in fund; no personal position


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