Made Some Sales Of NADL

I sold off some of my NADL position for $5.96. I had added these shares on 10/15 for $5.43. This locks in a quick 9.8% gain on a small position sizing. It brings my cash position to 5%.

I’m sitting pretty here. So far, I dodged sizable losses by going to 45% cash in August. I also bought what looks like it could be the bottom in the oil and gas space, on margin to 115% of my account. I’ve since sold this bounce down to a 95% long position.

Plenty of my recent purchases are underwater, but I have a healthy profit margin baked into many of them as a whole. I also am closing back in on 10% gains for the year again with lots of room from the highs.

My expectation remains for more volatility and a small pullback ahead. I wouldn’t be surprised if this gets labeled a stock market crash after everything – that fits well with the frequency of market crashes in the US (albeit resting on a small data sample).

As for the oil and gas sector (of which I have a majority of my assets invested at this time) I think we’re near the end of the correction with perhaps room for one last shakeout.

If we crash lower, I will consider adding on margin again. But it will be a slow decision given I am basically fully invested.

It will not happen immediately, surely. There will be more volatility and panic. But rest assured that the rout in the oil market will be unmade soon enough.

HCLP is already back to $54. You could have purchased shares for $40 just last week. The markets were scared, but then HCLP announced a 9% hike to its dividend. Now all is forgiven.

BAS is back to $15 from $11.50 last week.

ETP is above $65 again.

NADL is flirting with $6.

VOC has regained $11.

Those are big comebacks. I told you, the scare was not about a looming slowdown in the oil and gas space. It was more about frightening you into loosening your grip on the precious. Now that Jimmy’s friends have loaded up the trucks, we’re free to stop pretending like that Saudi Arabia rumor was ever anything more than the flapdoodle it was.

For the day I’m already up another 2%.

The EURUSD is not confirming the move, and oil prices have retraced. Yesterday’s powerful follow through into this morning has suckered people into the funnel.

For the moment, I don’t know if I want to sell any more. But one thing is clear to me – unless Europe can get its act together, we are going down.

I couldn’t bring myself to sell all the way to 20% cash. The waterfall left too many of my purchases underwater still and the hope of follow through pins me to my seat.

But I took quick profits in HCLP, VOC, BAS, and SXCP (I still own all four names, I just pared down sizing) ranging from 5-12%, and then I completely sold my BTU position for a 22% loss. That will lower the tax bill. I like BTU but it’s time to start thinking of April.

Despite having little cash, this lowers my risk profile substantially. The margin was worth it and if the oil and gas space has any sort of meaningful follow through, I’ll be back at new highs by Thanksgiving.

Gobble gobble.

Here I find myself, anxiously pacing up and down the width of the 9th floor in ferocious concentration on the ground just in front of my stepping feet.

What to do?

I have made almost 7% in one day, putting me back in the black for the year. My timing could hardly have been any better.

In August, animosity led me to sell down my longs to a 45% cash position, at the highs of the market. The oil names that were so mercilessly cut down; I had escaped them in sublime manner. Not that I was spared. I watched in shock as a 20%+ year devolved into a small loss. Rather, what marked this as exceptional was the losses I avoided.

I began to buy back what I had sold, and more…

I soon found myself holding a 115% long position on margin. I will not try and hide from you that I was beginning to get most nervous this morning, when the clamor was loudest and the fear the most potent.

So what do I do now? I can hardly exclaim victory – I’m 20% shy even from an acceptable sigh of relief.

Today was a big move. But I remain worried. The EURUSD is stuck at 1.28. Europe is the hidden driver of this selloff; not ebola or white noise in Fed data.

We could continue much higher. Or, I could be savagely knifed and lose my year entirely.

I think that settles it. I am raising cash back to 20% by taking profits on the names I bought at the lows, and completely selling off BTU for tax loss write offs.

Yeah, like I said, there really wasn’t any reason to be selling those oil stocks.

You were had, son.

HCLP +11.2%
BAS + 7.3%
VOC + 5.5%
BTU + 5.0%
SXCP + 4.5%
ETP + 4.0%
NADL + 2.0%