Many of you query “hey Fly, if the market is so bad, why don’t you short stocks? (heavy Brooklyn accent)”
Before I answer your question, let me just re-warn you of retardation taking place in the Empire of Accounting Fraud: China. Met coal prices are plunging and the global growth story is in jeopardy. Very soon, you will be tempted to own stocks with low multiples. Moreover, you will feel a certain sense of instant gratification upon short term runs in these commodity names. Before you know it, BAM, the homo-hammer of certain death and destruction will crack your skeleton in half.
Look at ANR, ACI, CLF, AKS and X– all very attractive no? Those stocks can easily lift 20% from current levels, or continue their fucked up trip to hell and drop by another 50%.
Right now, I have a net 15% short position. My cash position is around 70% because we are very oversold. I am a firm believer in the “rubber band” effect and have seen markets run hard in the most arduous of circumstances. All we need is one positive headline and this market is going to decapitate all of the newly minted bearshitters. I am not ruling out adding to short positions; but for now, I am purposely opting for the safer route via cash.
My original intention was to hold cash until the market got hammered, in order to step in and buy names. However, now I am starting to think it makes greater sense to wait for a rally and sell it short. We are in a very difficult market and selling short isn’t for the faint of heart. I do believe there will be a run on a number of hedge funds who are long commodity names, which is why they are getting hit the hardest.
In closing, I cannot justify buying stocks in size until the S&P touches down below 1,000.
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Indeud
You think S&P is going under 1000? Really?
100%
If we should be so lucky.
Agreed on everything, especially the “buying in size” portion.. Though, you could select some large cap names to buy so you can have the liquidity to get if needed?
Much easier for the zeeco and thinkorsinkers to play the ranges here, unaffected by liquidity issues (to a point)
Hard, hard call to buy divvy stocks. I am not sure they are havens.
Bought long SMH @ 28.45.
And added to the BAC I bought at close on Fri.
Got ave. now of 6.12.
Hey Ma. Look at me.
I’m a swing trader.
I am with you Caddy on BAC trade with new buy today at 6.05, avg 6.12 since last week.
We are either a couple of Mensa potentials or certifiable.
On the other hand one could be both.
If BAC $6.00 52 week low doesn’t hold then bombs away…line in the sand.
Own any Danish bonds? Better to own Danish blondes.
No matter how bad you think it is here, in the U.S., they will always “outstupid” you in Europe.
Excerpt:
(RTTNews) – Denmark’s new Prime Minister Helle Thorning-Schmidt has unveiled a 23-member coalition Cabinet.
Thorning-Schmidt’s Social Democrats have 11 Ministers, including the key Finance, Justice, and Defense Ministries, held by Bjarne Corydon, MorJen Boedskov and Nick Haekkerup respectively.
The Left-wing Socialist People’s Party, making its debut in government, was allotted six Cabinet posts with its leader Villy Sovandal heading the Foreign Ministry. Fellow party member 26-year-old Thor M. Pedersen, the youngest in the Cabinet, was given the taxation portfolio.
(That should work out well. –ed)
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The idiots are introducing a tax on foods high in saturated fat- http://www.bbc.co.uk/news/world-europe-15137948
Completely misguided and harmful to parents with infants and toddlers. Milk??
I love this sat fat tax!
Of course you would.
Sarcasm dude…sarcasm.
You had me confused. I was certain you were smarter than that.
Hard to express “tone” in written form.
Perhaps why FLY is so misunderstood by many?
Cramer pump on MS=disgraceful
Reminds me of his 2008 plea– “Bear and Lehman are A-OK! Buy! Buy! Buy!”
Whatever happened to that little skinny guy from Mississippi who used to torture Cramer on youtube?
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Any thoughts on shorting the QQQ’s? 1020 support is coming up soon on SPX.
Tech is down only 3.5% YTD.
1120…I mean
VXX and TLT pulling back…hmmmm
Yo Fly (brooklyn style accent)
tanks for da post, 1000 on Sp fo’ shu’ maybe even 750-800 I tinkin’
With all the cash on the sidelines, the mother of all short squeezes is possible.
Fly, I was thinking the same thing about Sub 1000 but no matter what way I turn everybody is talking 950 – 1050 … Advice would be waffling on about how everybody is wrong.
Contrarian me thinks you are…
On the one hand, the $RUT has never been down 6 months in a row. It has been down 5 months in a row on 2 separate occasions;
May 2011 thru Sept 2011 and (coincidentally enough) May 2002 thru Sept 2002
On the other hand, Oct is statistically one of the worst months for the $RUT;
Over the last 24 years, 12 have been up and 12 have been down. The avg returns during the up periods has been 3.7% and during the down period has been -7.6% for an expectancy of -1.9%.
So, will this October be up thus keeping intact the never been down 6 months in a row mantra or will this October be down in keeping with the pattern developed over the last 24 years?
still so suprised at thew ‘underflying’ optimism/bullish considerations when…the panic selling still hasnt started!
there is no ‘news headline’ that is gonna change the flurry of global downgrades/EU mess..and continued weakness in the U.S economy now. We just made the turn ”lower” as even monthly SP slips over the zero line.
I trade currency period – and the stage is ‘more than set’ for continued dollar strength/stock weakness right thru Oct and early Nov. AUD and NZD as well have only ‘just now’ truly broken major areas of support – and with CHF outta the picture as safe haven coupled with massive GLD proft taking event….this one is in the bag.
Short stocks / long dollar guys.
Bobby,
Markets never really do the same thing twice..or 3 times or 4 times. This is the trap that ‘stats’ can play with you. In fact…as you’ve outlined – ‘all the more reason for it to NOT DO WHAT YOU EXPECT’.
I’d trade what you see ma man – and want what the market wants…and take whatever it gives to you.
Fact of the matter is…..we’ve never been here before….and never will be again!
The combination of fundamentals and technicals are rarely reproduced twice – exactly the same. Expectancy of -1.9%?
So by that I read that YOU are expecting to lose 1-9% this month! – You’ve already done it then! Tough to beat those odds – once you’ve got that as expectancy.
I expect to make boatloads.
hope it helps.
Riser,
I’m trapped in a moderate sized postion in URTY since $RUT 760 on 8/2. 800 shares, avg cost basis $67ish. Thought the 11% decline from the 858 high on 7/7 was just about over so I scaled into the URTY position. Turns out we went even lower to $RUT 650 just 6 days later.
Haven’t done anything since due to the volatility. Was looking to put on some option positions to help me worm my way out of that URTY position but it’s been too dangerous. The expectancy is just (the number of down periods as a % total periods the avg loss during a down period) plus (the number of up periods as a % of total periods times the avg gain during an up period).
Gotcha Bobby.
Sounds like you’ve more than got things under contol, considering your current position.
Good luck in your trading.
Shorting now is MUCH harder than in 2008. Back then it was like shooting fish in a barrel.