Saturday, March 22, 2008

Russell 2K update

If you have the time please take a trip over to Karl Denninger's blog Market Ticker. Seems he went toe to toe with Dick Bove of Punk Ziegel regarding his call on Bear Stearns along with his 'generational buy' call on the banks. Please check it out his most recent posts, its worth your time.

I want to bring your attention again to the Russell 2K ishares, AGAIN !

Please don't think I'm trying to beat a dead horse. But I see nothing wrong with this cup and handle on the chart. Now that I am out and unbiased, I find it just as, if not more, compelling. I had a look at the Spiders, ticker SPY, and they are showing the same thing.

I intend to use this 'Bove rally' to get back involved in this trade again using my preferred vehicle the ultrashort Russell 2K ticker TWM. Due to the fact the TWM is 2x the underlying I will use the most recent reaction highs on the IWM as my stop point, these were 68.83 and 68.93.

Remember I said a few days ago that I thought the Fed would end up with egg on it's face regarding the Bear Stearns/JP Morgan deal. Well this might just be the start of it. Congress sniffing around never ends well, for anyone!

And on the lending front. I noticed CIT drew down their lines of credit. Expect more of this, wouldn't you if you thought your bank was gonna pull it. Maybe beleaguered homeowners(oxymoron if their ever was one) will do the same. Oh yeah, I forgot they did that already via HELOC's, etc. I'll take the under on CIT's bankers ever seeing a nickel of this back !

On the housekeeping side of things, I am adjusting some stops. Do not interpret this as waffling in any way. I am intent on keeping some profits and constantly increasing the equity in my account.

I am adjusting my stop on the ultrashort Xinhua China, ticker FXP, staggering them. So 1 unit at $84.85 and 1 unit at $96.65. Just protecting some profits and not get shaken from a well insulated position.

Also moving my stop on 3 units long of ultrashort Emerging(submerging?) markets, ticker EEV, to $82.65. Again not wanting to let a winner turn to a loser while attempting to let the winner run.

Livermore was so right when he said sitting is the hardest thing. Most speculators have the urge to sell their winners and tuck their small minuscule profits in their pocket, only to watch the stock go flying to the upside. He always counselled to be calm when you have a profit and nervous when you have a loss. Most do the opposite.

Good speculating to you all.

Open Positions:
Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 2 units Ultrashort China25 ticker FXP @ $84.55 stops at $84.85/$96.65
Long 4 units Ultrashort Dow 30 ticker DXD @ $58.00 stop at $53.10
Long 3 units Ultrashort Emerging Mkts ticker EEV @ $82.15 stop at $82.65
Short 3 units of Deutsche Bank ticker DB @ $117.15 stop at $119.40
Short 2 units of AGCO ticker AG @ $60.15 stops at $58.10/$56.65

No comments: