Thursday, June 5, 2008

Punting Visa (V) and the Spiders via the SDS

Yes I know we are having a wonderful jobless claims, verizon/alltel, retail numbers driven rally. But the fly in the ointment here is the consumer is against the wall and I see no way out for him given his Houdini escape routine via this home equity is gone. Iwill use this strength in the Spiders (SPY) to get short via my preferred vehicle the Ultrashort S&P ticker SDS. I am getting long 1 unit of the SDS here at $57.10 with a stop at SPY $141.54


Visa has had a wonderful run and looks to be rolling over here at a lower high. I am prepared to punt 1 unit short here at $86.35 with a stop at $91.17

I have received some interesting e-mail regarding my post General Electric(GE)... Govern yourself accordingly. I obviously have tweaked some GE aficionados as many are questioning the rationale for my call. Now I am no forensic accountant nor do I have the interest to tear apart their books as I would leave that to others far more qualified than I. what I do know is that the longer term the chart (ie. Daily as opposed to hourly, weekly as opposed to daily and monthly as opposed to weekly) the more valid and reliable the signal. Therefore a weekly reversal carries much greater significance than an hourly one.

That being said, the action on GE I was commenting on is on a MONTHLY basis. Developments that occur on that time frame are not haphazard and should demand your attention, (it has mine!) I have heard all the arguments in favor of GE, big defensive name, great dividend, same recognition, diversified. These are wonderful thoughts but they are rooted in hope and nothing more. If you think the generous dividend will protect the stock in a downturn you only need look at the banks for evidence of what the market thinks of dividends when business conditions go off the rails. Remember what I think of people who measure bargains by how many pts it has sold off the top. Under that guise there are much better buys out there for you like Nortel, Cisco, et al.

Listen GE is a great outfit with a great solid long term track record. But you must ask yourself, will that be any consolation if, and I say if because I can have and will be wrong often, the stock does drop as I conclude it will. Don’t be like these institutional fund managers who choose their investments based on others perceptions, besides like politicians they believe there is safety in numbers. Misery always loves company, that way you can walk around and lament how you all lost money in a household name as opposed to some obscure unknown backwaters outfit.

Always remember that there is no such thing as an investor there are only speculators. So what is an investor you ask?
An investor is a speculator who made a mistake and will not admit it !

Good speculating to you all.

Open Positions:
Long 6 units Currencyshares Japanese Yen ticker FXY @ $88.55 stop at $91.40
Long 3 units Ultrashort Dow DXD@ $50.12 stops 2/1 at DIA $130.26/127.34
Long 2 units Ultrashort Financials SKF @ $103.90 stop at XLF $26.72/25.54
Long 1 unit Currencyshares Swiss Franc ticker FXF @ $96.25 stop at $93.82
Long 3 units Frontier Oil ticker FTO @ $28.35 stop at $27.82
Long 1 unit Ultrashort Real Estate ticker SRS @ $88.10 stop at IYR $71.08
Long 1 unit Ultrashort QQQ ticker QID @ $37.05 stop at QQQQ $52.24
Long 1 units Ultrashort S&P ticker SDS @ $57.20 stop at SPY $141.54
Short 1 units Daimler AG ticker DAI @ $86.20 stop at $82.48
Short 1 unit Brinker Int'al ticker EAT @ $21.25 stop at $22.44
Short 2 units Goldman Sachs ticker GS @ $191.53 stops at $184.43/180.76
Short 2 units Darden ticker DRI @ $36.35 stops at $36.37/$35.24
Short 3 units Lehman ticker LEH @ $43.70 stops at $40.54/$36.27/32.47
Short 2 units Deutsche Bank ticker DB @ $117.03 stops at $114.89/105.37
Short 1 unit HSBC ticker HBC @ $ 83.65 stop at $86.78
Short 1 unit of Visa ticker V @ $86.25 stop at $91.17

3 comments:

Anonymous said...

Your positions all seem reasonable, except I'd probably raise the FXY stop to around 93 or so.

I wouldn't be surprised in the near term to see a trend change in FXY, FXF, SRS, DAI, EAT or DRI.

Regards,

TerribleTerry

Harleydog said...

TT

thx for stopping in, appreciate your comments, will double check my stop on FXY. thx again

Anonymous said...

You're welcome. Maybe we can compare notes. Here are my current new short candidates: CPHL, CSGS, KLAC, NCV, NGLS, NILE, RTI, and UA.

Let me know what you think.

TT

PS: I'm still working on the longs.