Tuesday, December 15, 2009

Couple of Quick Notes

I have been working a quite a few things of late before year end so my apologies for lack of posts.

Dubai World got a stay of execution with a 10 billion injection from Abu Dhabi, which in my view is a pittance given it's total debt, but then why would off balance sheet items matter in a world of denial. Heck, the major houses are right, why even waste any time on this issue as a Dubai default (yes readers, they will default), is a non-event, an outlier and is completely contained. Just like sub prime was or wasn't, I cannot remember. Nothing to see here, please move along

Short term rates, by this I mean 1 month, 3 month, 6 month, 1year rates, (take your pick) are at or below levels when the S&P was south of 700 back in March. Something out there is scaring the heck out of the bond guys and gals and yet the equity crowd seems to dismiss, content to parade around touting stocks with abandon.

Bearish sentiment readings are at levels they were back in the fall of 2007 with the Dow north of 14,000 alongside the fact that i
nsider selling numbers are absolutely annihilating the buying. Would we have it any other way?

Banks and financials are in a mad stampede, almost tripping over one another to issue equity into this rally. You think this is a good omen ? If so then you are fully qualified to run fund of others money. But don't worry if you missed participating in any of these issues as the manager of that equity fund you have in your 401k and IRA has got your back. Dollars to doughnuts he/she has undoubtedly bought you in. Yes dear reader, smart money.... smart money for sure.

A quick note to the bulls regarding gold -on which I have been quiet, content to be long my some physical as insurance- in particular the GDX, please note the very tight flag being formed currently. Heavy volume on the down move from the recent high of $55.40 (the pole). Light volume as the stock moved consolidated sideways between $47.50-49.40 (the flag). A break of the flag's lower bound of $47.5 would imply a target of $39.5 given the pole is worth 8 pts. For what its worth.

Housekeeping notes;

I was stopped out of my VNO short position yesterday at $70.72 for a loss of about 2 1/2 pts.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 1 unit Ultrashort Xinhua China ticker FXP @ $8.32
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 1 unit Direxion Tech 3X Bear ticker TYP @ $10.68
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80

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