What To Do, What To Do

I’ve been kind of back and forth today, contemplating what to do. On the one hand, I don’t want to sell into such oversold levels, preferring to sell into a bounce. On the other, I wrote last week how much I wanted out of my longs and was never given the chance, leaving me with today. Luckily, I had 50% cash so the pain isn’t too bad. I covered my CRM short for +10% and lost 2.75% on my VXX intraday short. The reason I covered VXX is because it looks ugly as fuck. I’m not about to fall victim to major funds selling no matter the price, just to avoid potential ’08 losses. The fear is still fresh in the minds of managers from that time period. That said, I do have some positions performing nicely. ARUN is down less than 1% and FFIV/GSVC/MU are in line with the Naz, despite the beta. I’m still holding this garbage CENX, and SCHN, two plays I’m not going to sell down here, but would first buy more. Today I added AGQ and UUP. They kind of compete with each other, but the AGQ is small, able to be built upon, and the UUP large, thus my interests lie with an increasing dollar.

Do not expect this to be a 1 day event. Should a rally even occur, it will be sold into by lots of overhanging supply, including mine. I’m interested in getting out of some of these longs, but only at better prices, for I cannot envision selling these stocks at these valuations.

I’m also interested in shorting stocks. Namely, insurance companies unable to achieve pension plan required results, banks with poor balance sheets, companies dependent upon EPS numbers and companies with poor debt situations. CRM is obviously on my list, as is MET, M and ALL. While you may be interested in names heavily owned by institutions, looking to capitalize on forced liquidations, be weary of those with high short interests, as you’ll be shorting someone else’s cover.

In the end, I don’t feel like writing the 58,784th blog about the headwinds and tailwinds and the positives and the negatives, etc, etc, etc. All I care about is putting a plan into motion.

SELL INTO RALLIES, SHORT INTO STRENGTH, CREATE A BALANCED BOOK. LONGS AT ATTRACTIVE VALUATIONS, SHORT THE COMPANIES WHO WILL SUFFER FROM ECONOMIC DOWNTURN THE MOST.

Today I’m down 1.3%. I sit at 37% cash, 15% UUP, 48% Long (MU, GSVC, SCHN, FFIV, ARUN, CENX, AGQ)