Tuesday, February 2, 2010

Pay Attention to the Volume

I know not how else to say this so I will just say it. If you still have significant exposure to the stock market you are being led to the slaughterhouse. Most every pension fund, hedge fund, mutual fund manager has a zealous belief in the following;

  1. the Fed has their back.
  2. the Fed is omnipotent.
  3. don't fight the Fed.
  4. liquidity is abundant
  5. there's safety in numbers (re. every else is in the market so I should to)
  6. get rich or die trying (re: my bonus is more important than your capital)
The same managers and talking heads you see on Bubblevision (CNBC) who, coincidentally never saw the debacle of 2008 coming, yet are eminently qualified to opine on how cheap equities are now. It would all be way too funny if not for the fact a substantial portion of people's accumulated life savings hangs in the balance of these ignoramus' decisions.

Mutual fund cash positions are at their lowest levels we have seen rivalling where they were in the fall of 2007 (market top coincidentally)

The bonds look to be holding firm here. If this was such a great dip buying opportunity for stocks (isn't it always!), why are bonds not tanking?

Well, because this is a rally that reeks of Fool's Gold.

PAY ATTENTION TO THE VOLUME ! or rather lack thereof. This rally is hollow.

Yes I am significantly short, so yes you could say I am talking my book, so to speak. Fortunately my book is my money! Not faceless, numerical balances on a ledger, other people's money, which is the bankroll for the majority of CNBC's expert guest list.

What I am NOT doing is telling everyone to get short.

What I am saying to get out of the market or in the least tread very carefully.

There is nothing wrong with cash.

Cash is king.

Cash becomes the king of kings as deflation takes hold and prices for most everything plummet lower.

There, just wanted to get that off my chest so there is no ambiguity about my stance.

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 2 units Ultrashort Xinhua China ticker FXP @ $8.49
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
Long 1 unit Barclays 20yr bond ticker TLT @ $91.25 stop $89.33

Short 1 unit Daimler ticker DAI @ $52.23 stop @ $52.23
Short 1 unit CurrncyShr Aus Dlr ticker FXA @ $89.65 stop @ $91.71

No comments: