Monday, October 18, 2010

Bookkeeping: Weekly Changes to Fund Positions Year 4, Week 11

Year 4, Week 11 Major Position Changes

To see historic weekly fund changes click here OR the label at the bottom of this entry entitled 'fund positions'.

Cash: 64.9% (v 62.5% last week)
19 long bias: 29.8% (v 19.1% last week)
5 short bias: 5.3% (v 18.4% last week)  [Note: Long bond, & long dollar positions considered 'short']

24 positions (vs 27 last week)

Weekly thoughts
The non stop rally continues.  While there were some economic reports last week, and the beginning of earnings season nothing mattered other than QE2.  The FOMC minute meetings Tuesday confirmed this was the direction, and a Ben Bernanke speech Friday put a rubber stamp on it.  Everything else is just details to this market which believes in the healing of QE2 on all asset prices.  Just as in 2009, 2008, 2007, 2002, 2001, 2000 and any number of other years the "Fed will save us".  No one mentions the Fed is usually the reason we got here in the first place, and the damage from them 'saving us' is always the nexus of the next catastrophe - but that's an issue for another quarter / year as the giddy bulls repeat the same game over and over.

Usually rallies begin to tire at this point out from inception but this one continues despite some divergences last week, especially in the bond market.  It is is a one way orchestra of computerized algo's played by the master conductor.  No matter the weakness in banks, a NASDAQ which has lost a lot of its leaders the past 2 weeks, but content to suckle at the teat of Apple, Google, speculation in nonsense stocks, a rumor mill that puts just about any stock on the planet 'in play', or any other factor.  It continues, until it ends.

Bogeys are S&P 500 13 day moving average (1164), and 5 day moving average on the dollar - neither of which have been punctured during this entire move.


In the week ahead earnings season reaches the heart of the matter. Most of the focus will be on being surprised by the beat by Apple.  Economic news will be released but has been completely irrelevant for the past month as good news = good news and bad news = QE.

Monday:  Industrial Production (9:15 AM)
Tuesday: Housing Starts (premarket)
Wednesday: Beige Book (2:00 PM)
Thursday: Weekly Unemployment Claims (premarket), Leading Indicators & Philly Fed (10:00 AM)

A lot of fed heads speak - Fisher Tuesday, Lacker & Plosser Wednesday, Bullard & Hoening Thursday.



Another week of sitting in quicksand.  I am at a loss of what to buy with all of our favorites either in parabolic moves with little to no rest, or looking damaged after some breakdowns the past few weeks.  I moved into some second tier stocks as a replacement but some of those broke out, and then reversed back down late last week even as the general market held in, causing losses.   On the short side, are you kidding me?  I had 5 short positions on last week and each one was stopped out within a handful of sessions... hedging techniques are mocked.  Overall I am finding it difficult to make any progress right now despite a market that seemingly can only go up.

For the portfolio I was stopped out of a bevy of individual short positions, and gave up on one hedge (volatility).  On the long side I bought some breakouts in secondary type names which looked solid until giving up the ghost Friday.  I also bought a solar stock just to make sure my magic touch was still there (the ability to crush the sector the moment I get involved) - I am still good on that front.

On the long side:

  • After being stopped out of shorts on Whirlpool (WHR) and China Automotive Systems (CAAS) Monday morning, I decided to try them long
  • I started to move into some secondary long positions, a "chicken" energy play with Kinder Morgan Energy Partners (KMP) which at least yields 6.3% if nothing else. 
  • Tuesday, not liking the 'action' in the cloud space - I closed out positions in F5 Networks (FFIV), Acme Packet (APKT), and (CRM).
  • Added to Rovi (ROVI)
  • Restarted a stake in Baidu (BIDU)
  • Started a stake in commercial real estate stock CB Richard Ellis (CBG) as it had broken out of a long held range. 
  • Wednesday I bought some SPY Calls (4.5% exposure) as S&P 1180 was breached; for the day this was a winner but by the next day it was a loser where I sold out the incremental exposure. 
  • Thursday, I restarted Trina Solar (TSL) as a test to see if I could stop the sector in its track as per my history - test succeeded. 
  • Sold 1/3rd of Home Inns & Hotel Management (HMIN) for a 10% gain. 

On the short side:

  • Monday, stop losses of Whirlpool (WHR) and China Automotive Systems (CAAS) were triggered. 
  • Volatility has been sucked out of the market as complacency reigns - hence the VIX has been crushed, and with that the very poorly constructed ETF that tries to track VIX has been doubly crushed; I sold the last of iPath S&P 500 VIX (VXX) with a 17% loss. 
  • Stopped out of OpenTable (OPEN) for a 2.8% loss. 
  • Wednesday, stopped out of Prudential Financial (PRU) as it broke over the 200 day moving average. 
  • Thursday, stopped out of Shanda Interactive (SNDA) as it broke over the 50 day moving average. 

Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012