In 4 sessions this week we've almost completely obliterated the previous 2 weeks of losses. I am laughing at last week's employment report now - as if those things mattered. I proclaimed I'd be adding some short exposure as we got closer to S&P 1070 - I am mulling it here.
My strategy is to get short somewhere between 1070 to 1080, and then abandon ship on that side of the boat, if we break north of 1080 because that would mean a new leg up. Thus far its played out perfectly but I have deep hesitation to short here. We have the best of the banks reporting next week and since the entire American system has been subjudcated to make them profitable I can only imagine the cries of glee next week as Goldman Sachs and JPMorgan raise the heads of the shorts on poles with their massive profits. Remember we are pretending balance sheets don't matter anymore for banks since we changed a few accounting rules... so its a tough one here.
I have a ton of cash so rather than shorting for now I am going to follow the same strategy but instead of getting short, I'm going to simply sell some long exposure into the strength and use the massive cash hoards as a cushion against downfall.
Sold half of BHP Billiton (BHP) position; recall we bought a chunk lastt Friday when the monthly employment report mattered for a few hours. Technically its rallied to a recent high; either a double top is forming or we are about to start a new leg up - if its a new leg, we'll get back in.
Sold 1/3rd our gold position in Powershares DB Gold Double Long (DGP) - what a run. I have to sit back and assess this, with the US dollar the black sheep of the world this could just keep going but I want to lock in some profits.
Sold 1/3rd our silver position, Ultra Silver Proshares (AGQ) - all the same comments as gold; this has been a monster the past 4 sessions.
Sold 1/3rd of Blackstone Group (BX) - as with BHP Billiton; we added to this position Friday on the selloff and now exiting.
While I'm enjoying having a hot hand in the stock market, I am actually profoundly distressed about what is going on in the real world. It's just seemed to have become a game of sacrificing the long term of the country to create an illusion in the now. There are 2 parallel universes - the Wall Street world and the Main Street; watching one gloat while the other suffers is surreal. We are creating such massive issues for our future I cannot believe it anymore - but much like 1999 it didn't matter until the *bleep* hit the fan. You could not short in 1999 and right now you cannot short here for anything longer than a few days. When the bill comes due for what we are doing, I expect to derive massive profits from the short side ala 2000-2002. But when this period's March 2000 is, I don't know.
I honestly just feel sad when I think about what is being done and how the masses don't care or don't understand. Yesterday there were rumors that the government was handing out $3000 checks in Detroit; in fact it was a $15M program (application process) to help people facing foreclosure and the like... there was a stampede of 50,000 people for 3,500 slots. This country is a mess. When it all comes to a head is unknowable but I become more distressed on our long run future by the day.
- he lure of federal cash assistance for needy Detroit families sparked pandemonium Wednesday at Cobo Center, as hundreds of city residents pushed, jostled and trampled others in a rush to apply for the aid.
- In a scene that spoke volumes about the despair of one of the nation's poorest cities, about 50,000 Detroiters descended on downtown to pick up 5,000 applications in hopes of enrolling in a federal program that pays a few hundred to a few thousand dollars to low-income residents to help pay rent and utilities.
- Wednesday's line stretched for blocks and before the process could be completed at least six people were taken away by ambulance, 150 police were called to the scene and the city stopped distributing applications before noon.
These scenes are akin to the ones when helicopters drop food and aid on refugee camps or victims of typhoons. Desperate people reaching out their hands hoping a box falls somewhere near them. Except the helicopter with the aid are inside a building.... inside the richest country on Earth.