Waiting on Even More Winship

I am taking a risk by waiting for my stocks to work. Generally speaking, if you need to wait for your stocks to work while the market is ripping, you’re in the wrong stocks. In the big scheme of things, as long as I am outperforming the SPY, everything is in order.

I caught a huge break when FRO lifted to $2.35+ on heavy volume, which allowed me to sell. I timed my purchase of OWW and FWM perfectly and have made up all of my lost ground. But, I am sitting in some monster sized positions, IMMR, GS and O, that are trading sideways for weeks. Well, they’re not exactly flat. Their two week gains range from 2-7%. I want moar.

I’ve been looking at the refiners, since they’re down so much. Look at WNR, CVI, ALJ and HFC. They are in strong downtrends because the WTI-Brent spreads have tightened. In order for the refiners, especially mid-continent plays like WNR and HFC, to be meaningful, they need the WTI-Brent spread to be in excess of $10. At the height, the spread was north of $25, so you could imagine why the industry is so cold with the spread only $4.

If you are buying refiners here, you are taking a huge risk. This is a classic boom and bust industry that can push the envelope to the downside further than you think. I am sure many of you pencil eaters never thought AKS, CLF and WLT would trade down to the levels they’re at today. Right or wrong?

My last purchase of SCTY pushed me even further into leverage. I am stuck in my positions until winship occurs.