On a day like today, you can’t really do anything but check your ammo, clean your guns, and get a good night’s sleep. If you are a conviction trader, then you have to stick with that conviction, or risk going crazy. This kind of “spring is busting out all over” rally has happened before, and I knew it would happen again. Somehow, I’m a little more peaceful about it this time.
Make no mistake, there are still dents in my wall, as my beloved [[SKF]] visits its recent lows, and all that shiny money I’d made in [[FXP]] and [[EEV]] melts away. Still worse are my many bank shorts, which are knee-capping me like an IRA Provisional in a Belfast alleyway.
As well, my Chesapeake Energy Corporation [[CHK]] fib gamble (remember $45 being the 61.8% retrace?) treads water. Even my alleged “hedges” weren’t much help today, with bio-babies Auxilium Pharmaceuticals, Inc. [[AUXL]] , Valeant Pharmaceuticals International [[VRX]] and Amgen, Inc. [[AMGN]] doing “meh” at best.
Why I held off grabbing some Humana Inc. [[HUM]] I don’t know why. I also like Rage’s Almost Family, Inc. [[AFAM]] idea as well, as it follows the “Collect the Old Fugger/Soylent Green” revenue model like Humana.
In the “Firefly’s Ass Bright Spot” Department, thanks goodness for my The Mosaic Company [[MOS]] short, which I thought was a disaster as it soared past $130 the other day, only to see it tumble to below $104 today (out at $106).
But overall, the trend is still down, and the only option I see is continue to focus on what’s falling off, here. My thesis continues to be that this is a commodity pullback rally, resulting from a combination of weak economy and “nothing left to sell.” There may be some dollar fuckery in there as well, but I don’t believe it’s going to last with the way we are exchanging “good money for bad” at the Fed window, and our trading partners being forced to raise rates due to incipient inflation they cannot afford to ignore. No, we’ll probably see this commodity cycle turn as soon as Ben has enough excuse in his pocket to lower rates once again — in an emergency bank saving gesture.
I don’t see things getting better for retail, banks and capital manufacturing here. What we may see is opportunistic acquisitions, as cash rich companies pick off competitors rather than invest in new plant and capital. “No-drill” Nancy may come back in September with another “Congressional bag o’ sweetmeats” in hand in the form of yet more helicopter checks, but I think we’ll be farting into the hurricane at that point.
Unlike in the “old days” (read: mid-nineties) all that excess printing press cash doesn’t go to fight Chinese/Indian deflation anymore, but rather pushes prices up worldwide as inflation is declared the winner in the end. The result — “Here’s your shitty $600 check, that’ll be $428.49 for that loaf of Wonder bread, please.”
Even the most hapless fuckwit knows there’s only so many 28% cash advances he can take off his credit cards before his shiny new appliances start disappearing. That means the retail trains is losing it’s wheels, even as it thinks it’s winning. I will have my vengeance on Abercrombie & Fitch Co. Abercrombie & Fitch Co. [[ANF]] once again.
Your thoughts are appreciated, either on the above, or the “Mournful Song of the Night,” one of my faves. Off to football practice.
[youtube:http://www.youtube.com/watch?v=OYQWCB4rkDI 450 300]
Comments »
