Raised Cash Today

I thought today's tape was going to be red from the opening but I was delighted to sell into strength early this afternoon...I thought that Friday's tape (249) was a premonition of what is to come over the next 2-3 quarters i.e aversion from the "risk trade" that has taken hold since early march.. I too was caught up in the short dollar buy risk trade, as commodity related equity positions such as PBR, MOS, SLB seemed like they would reflate forever..I have since paired these positions down to a miniscule amount, and kept my two overweight positions of MO and MCD intact as I believe they will outperform my aamazzing 1.15% mmy going forward.

My head is still digesting the hours of reading I have put in over the past two days, as I felt Friday was the start of an inflection point in the markets (equity,commodity,currency,gold) and a "relative" end to the March 7th buy risk trade. As I type this today's tape is now red, erasing an earlier 130 pt gain in the Dow.

There are many Macro Variables that are behind my reasoning which I will try to break down in my next post. With so much "noise" in the financial markets and accompanying literature I must trust those whom make sound macro economic sense..

Today's Hat tip; Bob Janjuah

Read Bob Here

Market Sentiment: Raise Cash

Easing out of UNG

Sold 40% of my UNG position during today's giant 7% gain, as Natural Gas storage numbers according to the EIA came in less than analyst expectations. eia Output, rig count, and drilling down nearly ~50% yoy according to a cnbc report...is this 40 cent move attributed to short covering? Of course, so tomorrow through next week will be vital to see whether these levels can be held...I initiated this position on June 16th at a price of $15.87 and have averaged down the falling knife ever since.. I must look back to my investment thesis of a possible abc bottoming pattern on heavy volume and the fundamental aspect that nat gas was at its highest spread in relation to crude oil since the early 1990's.

UNG 1 year, note the spike in volume in mid June UNG

Where to from here? Maybe a run to the 50dma, i will not be greedy, i will continue to average out and raise my stops as I do not foresee a forthcoming improvement in nat gas fundamentals...once again i am too early to the party

Back to posting

Havent posted since March 19th which coincedentally nearly aligns with the March lows and the subsequent 3-month bear market rally that followed, a rally that is retreating with each passing day...Apparently Easter weekend was the cure all for banking sector's woes...Earnings season will bring volatility back to the market place as the economic deterioration further materializes into company balance sheets...Is the bottom in? I believe so because I dont think that the market would give that many investors who have been on the sidelines since March the second chance of a lifetime. Economic indicators are improving but expectations for this recovery are still very elevated.

I have been thinking about purchasing on a longer term basis. I would love to initiate positions in companies with growing ties to China but not within the grasp of the Shangai Stock Exchange.. Ideas include Brazilian Petrobras (PBR $35.79), YUM! Brands ~$34, as well as in the Ag space via DBA or MOS ... I will begin to purchase these companies intermittenly if the major indexes and commodities continue to pull back..

Focus on: Bellwethers Fed Ex & Cisco Systems, as well as bank writeoffs in each banking division

Taking a gain

Learning from my last trade to get out in the green because I dont know what next week will bring, closed out at ~$127..

Fighting the trend

I was stopped out of my short Oil DUG trade earlier in the week ending slightly lower,...taking another contrarian approach with the SKF today at $113..more to come

DUG

I initiated a position in the DUG yesterday before the markets close while Oil rallied on China Stimulus Speculation and less domestic supply. I left the trade open through tomorrow with a +10% cushion, I still think Oil at $43.70 is at the top end of the 6 week trend...I expect Oil to continue to sell off tomorrow especially considering the extreme weakness in the US equity market and lack of clarity surrounding further stimulus in China...Well also see another unemployment number tomorrow and if jobless claims are once again higher than expected it will only expedite the sell off..

Today T. Boone Picken's said well see $60 oil before we see $39, obviously my money is on the $39 mark but well see..

As far as equities this extreme freefall looks like it will take us to 600 level in the S&P... 50 on the S&P Earnings x a 12 Multiple gets you 600, still a giant leg down to go...

More SKF

Bought some SKF yesterday at $125.73 yesterday while it traded down ~ 18% as BAC, WFC, MS, and C rallied 15-20% on BAD bank speculation...Cringed as the SKF continued downward and closed at $120, now at ~$130 and positive territory I will see how long it can go before I close out by todays bell...