Sold Some Focus Stocks

I’m starting to see some cracks that are turning into breaks.

Lo and behold I got some sell signals today.

An ample number of my focus stocks are getting bludgeoned with hickory axe handles. The portfolio, last time I checked (between shots of tequila), was down 2.57% and fading fast. What concerns me is that these stocks are in some of the strongest industries…energy, coal, steel, fertilizer.

Sold:

[[MOS]] @$144.79……+$17.81 gain

[[AKS]] @$66.50………-$2.49 loss

[[MEE]] @ $87.62……..+$29.12 gain

[[CLR]] @$65.89………+$13.99 gain

[[EAC]] @$70.29………+14.77 gain

I hate to pay ST cap gains, but if you make it, you have to pay it.

I’m hoping I pay an egregious amount of taxes this year.

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Just for S&G’s

[[MA]] 11:22am

 

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Ok. So you can’t get your hands on a DeLorean to make the conversion to a time machine. It doesn’t matter. If you don’t have a flux capacitor, you can fuggetaboutit.

Take heart. For $29.95, I can send you the plans to construct a simple, yet elegant, time machine of your own. That’s right. If you respond in the next hour, I will send you the complete plans for just $29.95 (monkey wrench not included).

Aiiight, so I’m messin’ with you.

Seriously, though. We all have our own basic, stripped down version of a time machine right under our noses. Maybe it doesn’t have the plush velour heated seats, and the gold inlaid steering wheel with the diamond IBC logo like the Fly’s, but hey, it’ll do your basic prognostication.

What’s this mysterious time machine in front of our now happy faces?

Remember freshman year, Econ 101, when you were sitting way in the back fantasizing about “doing it” with the cute blonde in the front row? Then you were suddenly jerked out of your pornographic stupor by the words: “leading economic indicator…stock market.”

As you all know, the market is a leading indicator of the economy. It usually discounts this 6 – 12 months in advance. So, based on what is going on with the market, what might that tell you about the state of our economy a year from now? Will the banks be out of the credit crisis? Will homeowners start buying McMansions and overpriced baubles and shit again?

Here’s the wild card….the election is several months away. We have one of the presidential candidates who is 15 points ahead of the other, based on recent polls of your average street person. This same candidate has flat out said that he wants to raise taxes.  And, he has the backing of many of his colleagues and hordes of naive, and smitten with charisma, constituents.

So is raising taxes good or bad for the economy? Keep in mind that taxation is simply legalized confiscation of an individuals assets. Plain and simple. It’s taking more money from productive people and handing it out to unproductive people.

Bad for the economy.

Well, enough of the “subliminal” political rant. Back to the time machine.

As we get closer to November, if this same presidential candidate appears that he may win the prized asshat award, how do you think the market will begin to discount the subsequent 6 – 12 months?

When do we hit rock bottom in this “slowdown”? Is there more bad stuff coming down the road?

By the way, you can also put the time machine in reverse and if you have a good idea of what the economy will look like 1 – 2 years from now, you might be able to have the time machine calculate where the stock market will be by turning the dial to “6” or “12” using the backtest function.

However, it’s much harder to figure out where our economy will be 1 – 2 years out. For that, you’ll need the DeLorean and the flux capacitor. 

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“What we’ve got here is… failure to communicate. Some men you just can’t reach. So you get what we had here last week, which is the way he wants it… well, he gets it. I don’t like it any more than you men.”

                                          —-Captain, Road Prison 36, from “Cool Hand Luke”

Sometimes it’s just hard to get through to some people.

Have the perma bulls figured it out yet? I mean, what is going on in their minds? Do they actually think we will recover anytime soon? 

One of the things that is crucial, whether you are a trader or an investor, is to face and accept reality. Don’t be in denial. Don’t run away. Don’t make excuses. Deal with it.

My focus stock portfolio took a 2% hit today. These are stocks in the strongest sectors that are beginning to break. I’m going to have to make some decisions on what to sell tomorrow.

If you are down a little for the year, don’t hold out thinking you can breakeven anytime soon. It’s not in the cards. Besides, the market doesn’t give a rats ass if you breakeven —-ever.

People, realize that this market may be going down for the remainder of the year now. It will be like Chinese water torture, only drier. Put some hedges on for Pete’s sake. Go to cash, short weak stocks, buy puts, use inverse ETFs. Do something!

I keep hearing about upgrade this, buy that, bank buyouts, etc. First of all, nobody has any money. Where will they get it? From the other banker down the street? Deals will have to be in stock, if any, backstopped by the Fed at $10. There will be no delusions of granduer. There will be no more armies of IB’s. There will be no more big deals this year. Earnings at the IB’s will be going down. Take note and forward this memo on to your broker.

I’ve got a close friend in the IB business. He can’t find any deals. There are none out there. That business  has dried up, according to him. Another guy at a VC firm told me that there’s nothing going on at his shop. The deals are getting put on hold, delayed indefinitely, or nixed altogether. People are getting scared, capital is drying up and the machine is grinding to a halt. 

Just today, I almost bitch-slapped someone in my office for suggesting that we ought to look at buying some “beaten down names” here. WTF???

To make matters worse, some asshat analyst on a conference call starts talking tech. Tech that, tech this. If he had ever followed up his comments spouting “buy with both hands”, I mean it….if it was physically possible, I would’ve reached through the conference call phone line and choked him silly.

What is wrong with people? Do they like losing money as the market churns in a shithole?

In short, I am ordering you not to go long any “value” stocks. It’s for your own good. Listen to me now and believe me later.

 Face and embrace the reality.

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I think it sells off more from here.

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I’m hoping for a washout to below 11,000 so I can put some money to work on the long side. This penny ante short one day, buy the dip the next day shit is not my cup of earl grey.

Once the BPNYSE dips below 30% (oversold territory) and crosses back over that level, will be the time to get the offense back on the field and score some major points. That’s the low risk point, where people can get crazy and buy just about anything on breakouts and bank easy coin. In the meantime, I’m hedged and drinking Margaritas.

The bulls are still holding out for a recovery here. Everytime the market is up, even a little bit, they get all hopeful, saying shit like, “we’re putting in a bottom”, “oil is going lower”, and “it looks like the market is turning around—time to buy”. That tells me we still have more downside left.

I’m eyeballing 11,000 Dow or  lower before this will happen. The BPNYSE is sitting at 42% as of yesterday.  The trend is down. I think we’ll get to below 30% sometime this summer.

Don’t delude yourself into thinking the market is oversold. It isn’t. Not yet. It can get worse. Embrace the pain, as they say in the Chinese work camps.

Until then, I’ve got the defense on the field via [[DBA]], [[USO]], [[SKF]], [[FXP]], [[SZK]], [[DGP]] and [[GSG]]. I also threw some cash at [[FXA]] because I like Crocodile Dundee. More shrimp on the “barbie” coming up.

Btw, MA just triggered a sell signal for me. Time to watch it closer. I’ll probably cut it loose today so it can wander the halls of financial darkness. The fuckers should have raised the credit limits and put more commercials on TV. How about ordering consumers to rush off and buy stuff within arms reach? Did that occur to you, guys? Now look at what’s going to happen to the stock.

Idiots.

 

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