Buyers Beware

Obviously The PPT is oversold now. But that’s not what’s interesting. Today’s close tied the lowest technical score ever. The last time we were this oversold was 2/17/09. Shortly after 2/17, the market traded way the fuck lower, in “fuck you, you’re dead” fashion. It’s one thing to be oversold, but another to be dangerously oversold. The market is whispering something to us, ever so quietly.

For the record, I do not want a collapse and do not stand to gain, being net long. However, let’s face it, we have nothing to run on anymore. For over a year we ran purely on POMO and Ben Bernanke’s beard. Now we have to run on cheap stocks and a good economy. Get it?

I guarantee you policy makers will throw the kitchen sink at this debt crisis and at some point the market will scream higher. Because of this, I will not be shorting anything. As a matter of fact, I will be a buyers of basic materials at the right time. My list will be furnished inside The PPT.

Today’s sales were in tech. I cleaned out of VMW, AMD, MU, CIEN and FFIV. For all intents and purposes, aside from CIEN, they held up well during this meltdown. Had I went long some basic materials, I would have lost a lot more. I kept AG, GSVC (illiquid), WNR (less than 2% position now) LCC and will liquidate into rallies.

My buy list encompasses the most battered basic material stocks, with the best fundies and highest % of shares sold short. I want to own stocks that are heavily shorted because the short sellers offer support underneath the stock, via covering. Also, they provide excellent tinder when the tide turns.

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