Today Hosni Mubarak surprised pretty-much everyone when after all expectation, he again refused to step down from power in Egypt. In other news, Cisco Systems warned that their sales to governments may continue to decline because of the weak finances of same. The stock was hit 16.5%. They didn’t sell the stock – they took a sledge-hammer to it. That’s a big hit for a blue-chip. So my take-away from this is that tech stocks are increasingly vulnerable to bad news, and that equities in general may get a rough ride tomorrow as uncertainty and anger increases in Egypt.
Today the gold position stopped out on the early morning market dip that followed relatively large down sessions in Asia. The S&P once again rallied, and closed up a point on the day. Sucks to be on the sidelines when gold will probably respond to the Egypt situation. I also had a stop-buy to go long crude oil, but it didn’t trigger. Oil will likely rally again on the middle-East situation, so I may or may not have a decent entry point tomorrow morning (I’m not big on chasing gaps in range-bound markets).
I’m looking for trading opportunities that might hold up on the long side regardless of which way the general market goes. To that end, grains, T-Bonds, and precious metals still look interesting. Grains have gone up a lot since the summer, but I think they, of anything still have potential to keep running due to shortages from recent weather-related events around the world – a different driver than the currency-debasement macro stuff that’s driving most other markets. T-Bonds are hitting new lows every day, but would ultimately be a go-to choice for flight-to-quality if stocks and/or commodities correct. (Does anyone notice that these new lows in bonds are actually a form of interest rate increase? – bondholders are demanding a higher inflation and/or risk premium). And precious metals had already come off and looked like they were starting a nice rally – though that could come unglued if stocks correct. So given all that, today I took entry signals and positions in 2x grains ETF DAG, and 3x short tech stocks ETF TYP. And I’m waiting for that re-entry in gold.
I’m still short copper, and that was going the right way today until the market again started to rally. With the tightening in China, copper seems to be at some kind of a cross-roads. This one’s murky. It could continue on the global supply-deficit theme and follow gold on geo-politics, or it could in fact have a sharp correction if stocks do same. Obviously I’m betting on the latter, but it’s not so clear-cut. This particular ETF is very thinly traded (HKD on Toronto), so I’m using a mental stop for this position.
Some disappointments? Getting tripped out of the gold position today (though I’m following a tighter trading discipline after my Feb 2 hit and want to stick to it), not getting the long fill on oil, and watching EnCana gap higher by 4% out of nowhere despite a weakish stock market, and outright crappy nat gas market. And being right on emerging markets and getting my large EDZ short ETF position tagged out on an intra-day spike last week a few cents from the low. If that position held I would have recovered my Feb losses and then some by now. And yesterday my broker Questrade once again screwed up with their software blocking my buying power. They’ve made changes to their platform and obviously there are glitches. Yesterday I had buy orders in for DAG and Rubicon Technologies (RBCN) that were rejected and so never filled. RBCN is up over 10% in two days.
So going into tomorrow I’m oddly positioned long grains and pharma stock Merck, while short copper and tech stocks.
| TRADING | 10-Feb-11 | UPDATE | 463 | |||||
| # | Trade | Qty | Stock | Symbol | Price | Acct | ||
| 41 | Sold | 13.9% | Newmont Mining | NEM | @ | $57.23 | 2 | |
| 57 | Sold | 15.6% | HBP Glb Gold 2X ETF | HGU | @ | $14.69 | 3 | |
| 59 | Bought | 7.4% | Drxn Tech 3x Sh ETF | TYP | @ | $19.50 | 1 | |
| 25 | Bought | 7.3% | DB Agriculture 2X ETF | DAG | @ | $16.56 | 1 | |
| Qty % is the portfolio weighting | ||||||||
| S&P500 | 1321.87 | 0.99 | 0.07% | ||
| CURRENT POSITIONS | |||||
| STOCK | SYM | LAST | CONTRB | WGT | Trd # |
| CASH | 70.6% | ||||
| HBP Copper 2X Sh ETF | HKD | $8.07 | -0.33% | 7.9% | 71 |
| DB Agriculture 2X ETF | DAG | $16.43 | 0.56% | 7.3% | 25 |
| Drxn Tech 3x Sh ETF | TYP | $19.21 | -4.12% | 7.3% | 59 |
| Merck | MRK | $33.04 | -0.03% | 7.0% | 72 |
| Directional Bias | Long | Short | Net | ||
| 14.3% | 15.2% | -0.9% | short | ||
| CONTRB is total contribution to profit of all closed, and current open, positions | |||||
