Trades: AMZN and VPHM

Thu Apr 16, 2009 5:15pm EST 5

Sold AMZN @ $77.08

Bot VPHM @ $4.98

Books for drugs. Gain/loss info posted in The PPT along with the rest of the portfolio holdings.

Optimal Alpha Portfolio up 49.59% since 03/16/09.

Carry on.

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Alpha Buy: SRS @ $30.224

Thu Apr 16, 2009 1:55pm EST 4

Due to my oppositional nature and hidden penchant for conflict, I bought back the 7,000 shares of SRS I sold not too long ago.

As of: 11:55 am MT

Ticker	Shares	Cost Basis/Sh	Cost	LAST	Total Position (FMV)	% ▲ Gain (Loss)	%CHG TODAY	$ GAIN (LOSS) TODAY
MAC	80,000	$8.28	$662,400	$12.98	$1,038,400	56.76	(0.92)	($9,642)
CBL	267,100	$2.65	$707,815	$4.55	$1,215,305	71.70	2.48	$29,410
BXP	18,900	$37.12	$701,568	$42.83	$809,487	15.46	(0.02)	($162)
SRS	33,000	$41.38	$1,365,680	$30.50	$1,006,500	(26.37)	(1.28)	($13,037)

			$3,437,463		$4,069,692	18.38	0.19	$6,569



	Long		$2,071,783		$3,063,192
	Short (effective)		$1,365,680		$2,013,000
	Net effective long(short)				$1,050,192

The public trial and execution of SRS has been delayed pending further developments.

(Warning: know the risks when trading in speculative issues and ultra inverse ETFs. It might help you to understand those risks, by simply placing a stick of dynamite in the microwave and setting the cook time for 4:00.)

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Selling DHI (Short)

Thu Apr 16, 2009 11:23am EST 2

This is one stupid housing market. The rate on foreclosures is picking up and the tsunami will crest the end of this year or next year.

So, why the run in the homies?

I sold shares of DHI @ $11.33, for S&G’s, obviously.

It looks like the guano is starting to hit the fan in Texas, as foreclosure activity is growing almost as fast as calls for succession from the Union.

DHI has big exposure to Texas.

YTD, DHI is up 57.8%.

Everybody and their gay cousin knows the biggest competition for the homies are foreclosure sales. Why buy a home at full price when you can get it for a substantial discount?

Yeah, that dog won’t hunt.

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CBL Upgraded by Goldman to Neutral from Sell

Wed Apr 15, 2009 4:08pm EST 8

Jonathan Habermann is one smart dude. Nice going J…..and thanks.

(Disclaimer: I have no inkling who this guy is, but he is now my new friend)

Hallelujah, let’s get the party started.

I will be holding a public trial and execution for SRS tomorrow.

Trade on.

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Mid-Day Comments

Wed Apr 15, 2009 12:51pm EST 9

As of yesterday’s close, the NYSE Bullish Percent Index stood at just under 60%. This should start to raise a little bit of concern if you are a trader and have been milking this rally.

As you can tell from the above chart, the last rally that ended on 01/06/09, saw the $BPNYA top out at 66%.

Also, we should be watching the 15 day MA, as this is defining key trading support for many stocks and indexes.

In addition, the SPX is working it’s way against resistance at these levels:

Clearly, this market has been in bullish mode, but a fall back to SPX 830 or below, could cause this trend to reverse itself.

By the way, the 15 day MA for the SPX is currently 829.60.

So bottom line, be careful on new ideas here. Many stocks are in advanced stages of this rally. That said, a number of positive divergences are currently characterizing this recent rally, such as what we are seeing in restaurants, retail, tech, metals, steel and energy. While this doesn’t mean we are starting a new longer term bullish cycle, it could mean that we are continuing the bottoming process here.

Don’t give up on this rally too soon. However, recognize that the outlook for this market is range-bound at best. This is good news for you gunslinging traders, but bad news for the “buy and hold” AARP crowd.

I think it is significant that XLF is now trading above $10. Further upside is probably coming in the next couple of weeks. Look for resistance in the $12-$14 range.

REITs are technically an interesting group, and many of you may have been following my hedged REIT strategy, featuring the egregious SRS as part of the mix. Although REITs have been lagging the financials in general, many of the names are exhibiting a bottoming out on their chart patterns and 30-day highs, as seen by AIV, AMB, CPT, DDR, and my favorite, CBL. Still, this remains a speculative sandbox to play in.

On the fundamental side, we should keep our eyes and ears open to the earnings front. My sense is that although earnings are probably still bad in absolute terms, the negativity and gloom that we saw in Q4:2008 is starting to subside.

I would pay particular attention to potential downgrades by analysts as compared to areas and sectors that could be potential upgrades. Right now, the only potential downgrade I see is for gold stocks.

Potential upgrades might be coming for retail apparrel, home improvement, O&G drillers, defense and cap goods. If we start to see more positive news in these areas, the rally will continue.

Look at that SPX point and figure chart again. Keep in mind that if SPX can break through 877-878 convincingly, there’s little resistance and a lot of upside until we get to 940.

Happy trading.

That is all.

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