Saturday, July 29, 2006


The strength in the tech sector finally came - but I missed the low by quite a bit so I am making money in most my names but getting killed in DELL even though its bounced back. Certainly after the last 2 weeks even in the face of all the middle east trouble it was quite an impressive rally. Front month vol in SPX is very cheap -13 and even septemer is only around 14. I personally think that especially with another fed rate hike coming in August its a great time to load up on downside protection. Im looking to trim my tech holdings where I can next week.

My CFC puts have worked out well - got somewhat of a dead cat bounce and I am going to buy some MFX puts (MFX index closed at 94.56 and I will buy some puts Monday.

The other thing I am looking to increase is my nat gas position for a few reasons. First I continue to think that the yield is fantastic (10% is easy to get) so that can help you through and pain. Second I think that with oil headed up - and possibly even higher people will start looking to nat gas more and more. Finally I think there is going to be a lot more consolidation in the space particularly if you can get into the small cap names (PVX I am going to start building a long term position 12.23 last)

Friday, July 21, 2006

Middle east

Someone pointed out to me that if you look at recent history what is happening in the middle east now has been happening for a while. Hes pretty right I suppose - many wars regligious conflicts....this is really more of a norm. It still is scary - news reports say India has evidence pakistani ISI is behind he train bombings a few weeks ago.

There were some pretty good tech earnings last night, MSFT, GOOG and some bad: DELL which is shifting my tech positions around a bit. They havent performed well needless to say but I am almost back to break even in MSFT ($24) and DELL im hurting. I bot some SDS at 72 yesterday to hedge myself a bit (its and ETF which is 2x inverse of market so its a downside play) and its also the start of my market short.

My CFC puts are a good hold and i am bout even on the position and finally are my INTC calls - I keep waiting for the dollar pop but cant seem to catch it. The overall market is hanging around - I think its only a few weeks before we test 1200 again and I think well see it well before we see 1300 again. I also am starting to look more at natural gas, especially the canadian trusts because I like the divident and the fact that they are paid in canadian funds.

Thursday, July 06, 2006

Jim Cramer

Im so tired of this guy - I think hes pretty brilliant at least for his concept and ability to speak on several hundreds of sectors and positions. I cant help but feel that his show coincides with the peak of the stock market. If some guy screaming and playing sirens and cash registers isnt the biggest sign of the publics regained interest in the market then please point out a better one. I m trying to find evidence of his peak ratings which I think have already happened...havent come across it yet but will post when I get a chance.

Summer Days

Its pretty quiet now as summer finally kicks off. The market is pretty rangebound and I am hoping the NASDAQ (2155) can get a little pop so that I can peel off some of my tech holdings. Also being pretty into the energy space I find natural gas pretty fascinating. Almost all tech tools indicate that it is a major sell - but at 5-6 bucks how much lower can we go? On top of that we have $75 oil and hurricane season rapidly approaching. I am long some SJT at 37.50 and it yields about 11% so I feel fairly comfortable with that position.

I am going to wait a few weeks to start to leg into my SP short position as well I continue to expect a little market bounce. But in the long run when you consider the current condition things are in I dont see how you can be in long this market long term. North Korea, Iran, Nigera are all major hot spots right now which could have major economical impact in the US (at least the latter) and North korea could very well tip off a war with Japan and Taiwan looking to test some missiles too.

Finally a long term chart on the 10 yr bond was pointed out to me today...this snapshot doesnt do it justice but i think the point is served. Its a secular bear market in bonds which - Im told is not typically good for equities. This brings me to a final point for the night. I think what we are about to face is a bear market across all asset classes. I think we are going to enter a period where money flows out of everything Bonds, stocks, commmodities. As I try and build out this thesis I keep thinking about deflation and where to try and hide out. I guess some say buy physical gold - Im not sure if thats that way to go or not. I certainly think some type of currency diversification going to enter the equation Im just not quite sure what.

!0 Year Yield

Sunday, July 02, 2006

Longterm thoughts

I keep feeling like we are headed toward a major recession and that we will see inflation followed by deflation. I think about this a lot - and I think we are starting to see the start of things via the housing markets decline which is obsessively talked about. With these higher rates mortgages obviously get tougher - again thats not secret to anyone. When you take a second and see what large financial co's exposure is to mortgage debt is pretty staggering.

One thing that many people dont talk about, and that I think is going to be a major turning point or mark in our history is the recent rejections of foreign co's trying to purchase US businesses. (china/unical dubai and the ports) (also see this its kind of interesting: China and Dubai are two very very large holders of US debt and continue to finance our economy. They are long dollars, and choose to invest them back into the US to which we say get outta here. I think that we have seen the peak of the dollar - at least in the near term.

I hate sounding like I think the US is going to 0, I just think rough times are ahead. Im getting short the US stock market, and also trying to hedge against a dollar drop most likely via gold.

Post Russell

Kind of seemed like the Russell was a non event at least compared to the previous years. Volume just didnt seemed to be there especially with the quarter end there as well. I think a lot of hedgies have lost a lot of money over the last week and - while we may get a short term pop the overall theme is lower.

Right now im long some tech names via stock and calls: MSFT, INTC, DELL. Also long some SJT off of both the income (10% div) and a nat gas punt. Im also long CFC Countrywide financial puts - there are a little futher out as I feel like foreclosures are going to keep increasing its just something that is tough to time. Also im thinking about building my short position via some of the new ProFund ETF's SO etc.