Finally, a day of weakness in the market

Today Nasdaq was down 1.3%, Dow had the best showing of all indices, only down 0.4% and Russell 2000 was down 1.8%.

1. Again the economic data showed more weakness of the economy, and Dow was in new high all day long until 2PM, then it finally gave up to finish in red.
2. My recent pick up in TWM (Ultra short on Russell 2000) turned out to be a good pick, DXD was still under water, but recovered some loss. IWM's chart is the first major index that's broken to the down side. QQQQ also show weakness, SPY is better and DIA is still firmly in up trend.
3. I think the charts of these four indices tell me that this is the top of this market, think about it, the more aggressive and speculative IWM is the first to break, and people hide in a safe place like Dow, since that's the quality index. If people start to seek safety, then it's really the end of this rally. The weakness in IWM and QQQQ tells me it's over.
4. I expect a follow through this week to the down side. If market goes down, I think Dow will join the club eventually.
5. Sell in May and go away.
6. But any good news this week will again be used by bulls to run the bears over; on the other hand, any bad news will complete the reversal of the market trend, and I expect a much quicker down slope than the up slope since March 29th, it may only need 10 days for us to go back to the March low.
7. Right now it's still premature to predict a sharp down turn, but at least today's action is a sign.
8. And gold and PM stocks again proved to be a bad place to be in a down market, where is the hedge against a down market?
9. I think all assets are overvalued and expensive, they may all go down hard if there is a market sell off.
10. Let's see what ISM number bring us tomorrow. Today we saw consumer's spending is slowing.
11. After bell CC had a very bad report. Circuit City withdraws its forecast for the year. I think this should not be taken lightly, it's again a sign of end of a business cycle.

Week in Review

Stock market rose fourth week in a row, Dow was up 1.2% to close at 13120, it took 6 months for Dow to gain 1000 points. S&P was up 0.7% for the week and that's the best monthly gain since 2003. Nasdaq shot up 1.2% and now it stood at the highest level since Feb. 2001.

I understand my expanding exposure on the short side, I added DIA puts and DXD since April 20th. I found that Dow was up 19 out of the last 21 sessions, gained 820 points. If you think that it's impressive that it took Dow 6 months to gain 1000 points, what do you think about the 820 points since March 29th?

1. Last week we have very weak GDP number and exiting home sales number. So the economic data again points to a further slow down.
2. On the other hand, we have good earning reports from AAPL, AMZN, MSFT, BIDU,XOM and AT&T. These good earnings override the bad earnings from the like of BRCM, and almost all home builders.
3. So it's not too bad a decision to add puts and short ETFs starting on April 20th, it's overbought and likely to have a pullback any time now. I misjudged the strength of the liquidity in the market.
4. My real mistake is to hold a big QID positions since Feb.27th, and most of my QQQQ puts and RIMM puts. These mistakes are severer than the mistake of adding DXD recently. For all recent positions, it's likely I can get the loss back, for QID, I don't know if I can hold them any longer.
5. The only good news to me is that the market is overbought and may pull back, but if it can go up four weeks in a row, what can prevent it to go for a fifth?
6. Next week we have some labor data and ISM data, I expect a tight labor market to come with weak ISM number, so this potentially can derail the market rally.
7. And we're in May next week, the old saying "Sell in May and go away" may be true this year since we have the best start for the year in S&P 500 since 1999. So it's expected to take and protect profit, specially for the funds that outperform the market so far. But you never know.
8. I'll continue to use the common sense approach to guide me for the next action: add short if the market go crazy again, and sell the short and put positions if there is a decent pull back. I put the rally as 2% and the pullback as 3%, these are my target to add short or sell existing positions.
9. Gold and PM stocks are in the middle of a pullback and consolidation, I'll wait for better entries.
10. Oil may head higher, the arrest of militants in Saudi Arabia is great news since another potential disaster is avoided, but the fact that Al-Qaida keeps its focus on the oil fields in Saudi Arabia is bad news. Usually they'll try again if they failed. So the premium in oil will likely to go up.
11. Another significant move last week is the continued downward movement in Dollar. I truly believe it may be a good news for big companies that get a big percentage of it's revenue from overseas, but it will be bad news for U.S. economy and debts, the interest rate in bonds have to go up in order to attract foreigners to buy our debts. So that will add more pressure on the already bad housing market.
12. So anyway you look at this market, the bullish factors are liquidity and good earnings, the bearish factors are slower economy, higher inflation, weak dollar. Let's see how it plays out next week.

Focus

Today the market took a break, AMZN and AAPL jumped to new highs. After market closed, MSFT had a solid earning release.

1. I think now the market is at a critical point again, can it successfully consolidate and then move higher?
2. From TA perspective, it's overbought and pullback is good for bulls too.
3. From FA perspective, the economy is slowing and we may head into recession. But on the other hand, that has not translated to weak earnings; actually, recent market rise is due to good earning reports. And there are talks about liquidity in the market which causes the rise.
4. Tomorrow's GDP may give us more color on the economy and let's see how market reacts to the news.
5. I'm again on the wrong side of the market recently, it costs me a lot, but I'm still holding the positions and want to see further evidence before I adjust again. Now I still think short is the way to go, but what do I know?
6. Even this market crashes, my timing is wrong. If the market rises from here, then I'm dead wrong!
7. I need to focus on reducing the position sizes so that I can sit there to wait for the best moment to enter main positions, I committed too large of positions too early.
8. Let's keep the cash and don't add any more, let's exit the existing positions first before I add again. Now it's kind of careless for me!
9. Short squeeze caused AMZN jump 40% in two days, and the big earning surprise was partly due to lower tax rate (from 40% to 23%), but since there are lot of people shorting, so momentum players jumped in to force short to cover. 100 million shares traded yesterday and 60 million shares traded today, average volume is 8 million shares a day. But once the volumes dry up, so do the momentum players, I see if below 50 in next month if there is a market correction, and below 55 if market is flat or up slightly. Buying put here is the best, just don't short, it may go to 65, who knows. Its PE is 140, like in 2000?

Wrong again

I was wrong again with my latest positions since last Friday.I thought the market recovered too big too fast, so I added DIA puts as well as DXD since last Friday. Today with Dow surged 130 points to blow away the 13000, I'm wrong again.

1. AAPL had good earning after bell, so tomorrow morning, the Nasdaq should be higher. The momentum just keeps going.
2. From TA perspective, the addition of short last Friday was not bad, overbought with a new week of earnings and news. I thought the housing data would be bad, and what did that bring to the market?
3. Similarly, the addition of DIA puts today (yes, I added DIA puts again today, as well as small IBB puts) is not bad either. I expect a pull back, just don't know when. Maybe Friday, with bad GDP number.
4. But once you rely on hope, you're losing your trading game. Am I in front of a train leaving the station, or I pick the top of this trend at the exactly the right time?
5. I'll be patient and I will wait before I commit more on the short side.
6. I will liquidate if I think the bulls work out the overbought condition and successfully consolidate the recent gains. Now it's not there yet.
7. So be panic to sell now is the same as rushing to buy.

What can bring down this market:13000

Looks like the only thing that can bring down the market is for Dow to touch 13000. Bad existing home sales and consumer index barely moved the market, as the dip was bought and push Dow within 11 points of 13000.

1. I added a few DIA puts and TWM position today. I thought the market would head lower after the existing home sale number.
2. Now, like I said, I'll keep a tight control over the newly added puts and shorts.
3. Tomorrow we'll have more earnings and new home sales. So far the earnings were good, that's why it pushed the market higher.
4. Even though long term I see big drop in the market, I don't know if it will climb first, like pass 13000 on Dow and 1500 on S&P500, maybe these two can bring down the market.
5. I'll wait and add short positions carefully.
6. If they blame weather for the poor existing home sales number, then we'll have a bad number for new home sales tomorrow, and durable good orders. But you never know. And I'm sure market will rally if these two are good.
7. I'm a little tired of this senseless climb in the market.

The calm before a storm

Today market was quiet and didn't move much. It's down a little, with low volume. From tomorrow, we'll have lot of earnings, plus economic data. Also this week, lot of earning releases from Asia, which can move the market as well.

Overall, all major indices were overbought, so I expect a pull back.

1. DIA and SPY are overbought and show the bearish pattern for at least short term.
2. If we have weak housing data and weak GDP, then I expect a perfect time to pull back sharply.
3. On the other hand, if the data is strong and earnings are good, the market can work out the overbought conditions quickly just like today, low volume with very small pull back, and then move higher.
4. PM and uranium pulled back as expected, I'll continue to monitor them and wait for better entry.
5. Dollar bounced back, but is still at historic low. I don't expect it heads sharply lower from here, I expect a slow and long lasting bear market for dollar. And if this trend continues, it will have a negative and long lasting impact on US stock market and economy, since foreigners will slowly move money out of US. So gold should do well long term as long as dollar is firmly in a down trend.
6. Out of all the earning reports, AAPL will have an impact on tech, as well as MSFT.

Week in Review

This week is very strong for the market, led by Dow, on option expiration week. You can argue it's due to strong earnings, or mixed earnings, depends on your view. For the week, the Dow surged 2.8 percent, the S&P 500 added 2.2 percent, and the Nasdaq rose 1.4 percent.

1. I think now the market is very overbought, considering major indices are all in the overbought area. I expect a pull back. That's one the of main reasons I added the DXD and DIA and QQQQ puts again yesterday.
2. And I'll have a very tight leash on the newly added positions, they're intended to be short term positions.
3. We have more economical news next week. Again how market reacts to these news is more important than the news itself. I've been saying it's a weak economy, should translate to shrinking earnings and therefore lower stock market price, so far it defies the odds and pushes to new highs.
4. PM stocks and uranium stocks got very strong bounce on Friday, and I will not add here. I'll wait for them to pull back before I add them again.
5. Among the stocks I'll consider to add are: URZ,FRG,SSRI,PAAS,GSS and EMU. I'll watch other PM stocks as well.
6. I'm glad I sold SDS, MZZ and part of QID about two weeks ago and bought URZ and EMU. I sold URZ and EMU last Monday and Tuesday. These actions saved me, as an result, now I think I'll hold on to rest of the short ETFs longer with larger loss. But again, I maybe forced to sell if the market just shoot to the moon. Because, at the end, it's the market that decides.
7. I may adjust my positions again, and may add since I still have a sizable cash position. Let's see what the market bring us next.

Life

Today the market shot up again, with Dow added 150 points to close at 12960, with 20 points in the last 5 minutes. Since I'm on the short side, I don't feel well at all. Dow has a new all time record again today, third day in a row, that makes me sick!

1. I added DXD (Ultra short on Dow), DIA puts and QQQQ puts today.
2. I know it's the right thing to do, but I'm not sure and I'm not comfortable.
3. On my way back from work, I stopped at the civic park in my community's downtown, just to sit there for a few minutes. Young children playing in front of water fountain, grass is spring green and is covered with sunset light from the Rocky Mountain top. It's a beautiful scene.
4. We're lucky here in U.S., we can trade to make money. But I'm not feeling great just because I didn't do well in trading? I should not complain.
5. Just this week, one day in Iraq, more than 200 people were killed, thousands wounded. Do they have a life to look forward to in the future? More than 3000 U.S. soldiers were dead in Iraq, some of them may do great things for us, but their lives were cut short. And we never know what they can do for this country. To say it's a mistake to invade Iraq is an understatement!
6. Just this week, in Virginia Tech campus, 32 people were gunned down by one dark and twisted soul. So many students, some of them gifted and may have a great potential in the future, but their lives were cut short by being at the wrong place the wrong time. They don't have a chance to work hard, to do great things in life.
7. Just this week, thousands in Darfur, Sudan were dead due to fighting and hunger, and the whole world turned from them, without a helping hand. Do they have hope to have a decent life in the future?
8. Just this week, thousands in North Korea were dead due to hunger, do the children there have a decent life in the future?
9. If these dead can come back, I'm sure they'll do their best to make a great life out of it! If the people from Darfur and North Korea can live freely, I'm sure they'll work hard to make a great life out of it! They don't have the chance! But here, we not only have the chance, we have the choice!
10. I should not complain, I should appreciate what I have now.
11. Work hard, follow the rules and principles I learned, and appreciate life.

Dow hits new all time high, again

The Asian selloff could not bring down the Dow. Google reported solid earning after market closed. But in no way it's a blowout like in 2005 and 2006, let's see what the market does tomorrow.

1. GOOG lost its great growth momentum in 2006 and now it starts to mature, and it's very big now. I don't see it grows 100% any more, it will slow down. So I won't be surprised it will close flat or lower tomorrow, just like EBAY shot up afterhour last night, only closed down more than 3% today.
2. RIMM is very consistent in providing update which needs "more time", this time to explain the reason for the outage. I think they need more time doing that, right now they're in the state of "needing more time" to bring earning up to date. They need time to spin the bad news.
3. Uranium stocks like URZ, EMU, FRG and CCJ were all taking a hit today, along with precious metals and other commodities, due to concerns that China may have to curb its white hot economy, with 11.1% GDP and 3.5% inflation. I'll wait to enter these stocks, hopefully in lower price.
4. I was fortunate to sell URZ and EMU at a profit several days ago. And I totally missed the PM stocks since I sold them on Feb.27th, like SSRI and PAAS, even after today's 4% drop on them. But these are the stocks on my watching list.
5. Almost all sectors were down a little, except Dow and biotech. I still think market is in an unstable top that may find it difficult to move up, but easy to rollover.
6. Next week's housing numbers and Q1 GDP number will give us more color about the economy, and some more earning news.
7. I'll keep QID, plus puts on RIMM, QQQQ, CFC. I hope they'll work out well for me, if there is a correction heading into May and summer.

Dow hits new all time high at 12800. April 19th is the day of big drop?

If we don't have good things to say about others, just don't say it. Today I have nothing to say about the market.

1. Apparently, RIMM's outage was great news for its stock, it recovered quickly from 128 (down in premarket due to the outage news) to close at 134. I gave up finding reason behind this powerful surge, there was none, trust me, I looked everywhere. I only find reasons for it to go down, not up. Did I miss anything?
2. URZ,FRG and EMU continued their consolidation and pulled back, so did PM stocks, these are expected. Now I can work on these stocks and analysis may help you find a better entry and make money.
3. I added small CFC puts when it hit 37.5, I thought that's the area it may pull back. But it burst through 200MA to close at 38.12. The only good thing I can say is, I just added a small position.
4. Just like in February, there is lot of complacency in the market. And I said it's overbought for the last few days and it just kept climbing. CNBC showed an alert all day long to tell you the Dow is how many points away from record. Sometimes, you just need to watch CNBC for a few minutes to know if the market is near the top.
5. We had a mixing earning results, the one from Yahoo was bad; and dollar hit new lows against other major currencies.
6. The second news has very significant impact on U.S. economy, if China and Japan start to slow the purchase of U.S. debts (not withdrawing, just slowing), due to the falling dollar, then U.S. economy will be in bad shape, since we have huge debts, we just consume on the assumption that foreigners will lend us money. But this may end, which will drastically increase interest rate on our debts, put economy into long recession. Yes, this is just the beginning, but if dollar keep falling, we'll have many years of bad stock markets to come. It won't even cause a sharp correction, but it has long lasting impact on U.S. economy.
7. I have only short ETFs and puts, plus cash in my portfolio. I'll be on the defensive side.
8. By the way, I think it's just a matter of time we have another sharp drop like the one on February 27th. Maybe tomorrow, maybe on Friday, maybe next week. I just don't want to be on the long side when it happens.
9. And April 19th, almost reminds me about Oct.19th,1987. it's been 20 years, people forget about risks in the market.

Dow almost got a new record today

Market was tired today, tried and failed to break out. The economy news were what bulls hoped. After the market closed, IBM and INTC met expectation, YHOO missed. Tomorrow let's see what's the market reaction. After hour, INTC was up and YHOO down.

1. I sold rest of URZ and EMU today. Now I'm back on the short positions plus lot of cash.
2. At the end of the day, URZ was down 7% to 7, EMU down 5% to 12.8. I should sell them all yesterday. Sometimes, when you're exiting, why use limit order? I expect further consolidation on uranium stocks. FRG down 4% today to 13.9.
3. I'll add URZ,FRG or EMU when there are further correction on them.
4. I should sell CNB and CFC put options last week, when I have good profit. Now CFC's puts are in red, CNB's put, I still got a decent profit, should sell it. Don't be too greedy on these two, last Friday or Thursday, both of them were in oversold conditions, why still wait for further down?
5. RIMM was up 2 points early, could not hold, closed down to 131. Again showed bulls are exiting this stock and there is no much support left. If there are any bad news in the market or tech sector, I expect it to go to 200MA, which is 112.
6. From now on, I should enter a trade carefully, and take profit quickly. I let lot of option profits go and turn winners into losers, like RIMM puts, QQQQ puts and now CFC puts. Remember this. In options, time is against you, unless there is a continued move on the stocks. But we all know what happens after Feb.27th, there is no follow through.
7. Overall, think market is again at a critical point, if it can't break out with huge volume soon, it may have a sharp drop just like Feb.27th soon.
8. PM stocks are overbought as well.
9. As a matter of fact, most sectors are overbought now. Good news for bulls, they're all on the same page, bad news for bulls, if you can't overcome the new highs, a sharp drop due to profit taking is just ahead of us.
10. I'm on the bear side and position accordingly.

A new high for S&P500

The market reached a new multi-year high for S&P500. I totally misjudged the market after the Feb.27th correction.

1. The only good thing I did recently was to sell SDS on April 5th and started to add URZ and EMU. I also sold MZZ. Both SDS and MZZ saved me money, since market went up. And URZ gained more than 10% since last week.
2. I sold half of EMU and URZ today, wanted to keep the gain and raise cash. Will likely to sell the rest tomorrow. A more than 10% gain in URZ in 5 days is too good to be true. And tomorrow we have CPI number, housing start, building permit, all these numbers, plus earnings. I want to be on the safe side.
3. For the market, now this can be a double top for the market, it's overbought, why risk losing the profit in URZ? That's the reason I sold half of URZ and EMU today.
4. RIMM was down on a up market, again not a good sign for RIMM.
5. Today I also added small QQQQ put and CFC put again. CFC was up more than 6% today. I continue to like the short idea on CFC.

What's next:

1. I think there is a great chance this is a double top or faked breakout for the market, considering the fundamental reasons in the economy. That's the reason I added QQQQ put recently.
2. And I raised cash today so I can play if it comes to that.
3. CFC should be shorted in any rally, which I did today, added puts.
4. RIMM will come down hard if market corrects again, like Feb.27th.
5. Now I have enough short ETFs to play the market down turn.
6. If I'm wrong again, I have enough cash and will decide what's next.
7. I think once April is over, market will enter a seasonal weak period, so I probably will hold on to these short ETFs and puts.

Week in Review

Friday is the second day in a row the market started in red and finished in green. Nasdaq was up 0.5%, after Thursday's 0.9% gain. Am I wrong about the general market? I thought by this week, the market at least showed some weakness, but I could not find it. Other than overbought condition, seems there is nothing wrong with the market technically, specially considering the bad conditions around the economy.

1. Next week there are many earning news, plus CPI number. Even though I could not find many arguments technically, from economy perspective, I think there is great chance this is a market top.
2. Economy is slowing, from housing crash to subprime mortgage defaults; and it's in the 6th year of an expansion, which is tired and there are lot of excessive inventory to be worked out. Mobile phone inventory is one example, check MOT, NOK's earning reports.
3. And market and Fed already greatly discounted geopolitical risks, oil hike and commodities hike later this year, these will add inflationary pressure to limit the Fed's ability to add more liquidity to the market via rate cut.
4. And this is a time the profit margin for companies to shrink, not expand, as in the beginning of an economical cycle like 2002.
5. So I think my positions in QID and QQQQ puts are justified consider the macro market environment.
6. Since I sold many short ETF positions to buy URZ and EMU, now my portfolio is balanced.

URZ, EMU, RIMM, CFC and CNB:

1. Fortunately for me, I added URZ and EMU after I reduced my short ETF positions. And URZ was up 9% with EMU up 1.3% on Friday.
2. Long term, I like the uranium story. Short term, URZ is a stock that traders love, big swing, with sound fundamental potential. Just last week uranium price shot up to $113 from $95.
3. You can say anything about why URZ outperforms EMU, but I think unless the market has a sharp correction, URZ will continue to shoot up, like FRG did in 2006. URZ closed first time above $7.
4. Now URZ is 33% above its 50MA (ouch!). You may think it's time to bail. But from it's brief chart history, on Nov.24th and Feb.26th, URZ was 77% and 54% above its 50MA respectively. These two are previous peaks. So it may has some big 20-40% up side left.
5. On the other hand, EMU is far more valuable than URZ, and since it's traded on NYSE Arca, not many people know it, which is good, you can get in cheap.
6. RIMM finally started to correct itself. An article I found has an analysis about its lack of development for 3G and next generation of smartphone, if half of the arguments turn out to be true, RIMM will see at least a 30% price fall in 2007, if not more.
7. But RIMM has defied gravity before. And with ongoing formal SEC investigation, and potential OSC upgrade its investigation from informal to formal, there are lot of risks in RIMM. No wonder almost all analysts on wall street recommend people to buy the dip, because if all exits RIMM, it will be an ugly ending for the clients of the wall street firms. I don't believe all the analysts are for the interests of the investors, it's been proved again and again on wall street.
8. CFC and CNB are good 3-9 months play in my opinion on the short side, I suspect the housing will be in worse shape by then, and that will translate into a worse stock price for both of them, since that have very large mortgage exposure, specially CFC.

Plan next:

1. My plan is to manage two sets of positions:
2. Short ETFs and puts are for long term, since I still believe a down turn for the market.
3. URZ and EMU are for the short term, if the market continue to go up or side way, uranium should do better than PM shares, even than the strongest of the PM stocks, like SSRI. And it's an alternative energy play as well.

Another very strong day

Again the market showed strength, turned from red to black in a hurry and closed at the high of the day. Nasdaq was up 0.9%.

1. I used today's action to add a small QQQQ May puts. I'll sell them if I have a quick profit. Short term play, QQQQ is overbought.
2. RIMM was down 12, which is good for my puts. I'll watch and see if it can hold. I expected it touches low 120s in the short term. But many analysts today urge investors to buy, said 12 points drop is over reaction. And the 16 points gain in the last three weeks is the way they think it should go.
3. Tomorrow we'll have PPI number, if it's bad, should send market down hard.
4. And next week more earnings news. I expect some more down trend for the market.
5. URZ and EMU recovered a little today.
6. Gold again didn't show any strength today. I still think if market goes down hard, it will follow initially.
7. My next target is CFC or CNB puts on any rally. Other than this, I probably will wait and monitor my positions.

Fed minutes dash hope of a rate cut in the near future

Today's market reaction to Fed's March meeting minutes is expected. Now we won't see a rate cut until, maybe September. Now it's hard to find good news to push the market higher, unless we get unexpected stronger earnings in 1Q.

1. Nasdaq was down 0.7% and Dow was down 0.7%. Now we don't need to listen to the Dow up 8 in a row talk anymore.
2. I expect more volatile actions the next two days, with more news come in. Nasdaq has to break 2400 to signal a short term down trend, and break 2500 for a short term up trend, and we're in the middle of the channel.
3. My opinion is for the market to break down. Too many bad news and conditions can derail the Goldilocks outcome, and lack of good news in the pipeline. But you never know.
4. Uranium's spike to $113 should provide support to URZ and EMU. Both are speculative plays, and can go up or down big per cent every day. The key is to add on weakness and hold on for long term.
5. Today, Paladin Resources Ltd., an Australian uranium producer, raised its hostile bid for Summit Resources Ltd. by 20 percent to A$1.23 billion ($1 billion), matching the price Areva SA agreed to pay for a minority stake. These kind of news are good for uranium stocks in general, showing the market is really tight in finding new resources.
6. RIMM showed so-so earning results, and so-so forecast as well. And in the middle of the preliminary earning release, in a typical RIMM style, it states that SEC upgrade the informal review into a formal review. It's down 2.3 to 146 today and down 10 to 136 after hour.
7. Last time it has a negative news is the iPhone news on Jan.9th, RIMM down 11 during the day to close at 131, and in the next few days, it touched 121. Let's see what happen tomorrow.
8. Because I hope the "good" earning news will pop the price so I can buy put again tomorrow morning, I didn't add any puts recently. If tomorrow it can drop the same pre cent as after hour, then it will be good news for shorts. The 50MA is around 137 and 200MA around 110. Hopefully, this time I can get all my loss on RIMM puts back.
9. I sold last MZZ and added EMU yesterday. Now I'm out with MZZ.

Next plan:

1. Hold QIDs, may add CFC and CNB puts. Financials with mortgage exposure can be shorted on any strength.
2. Will not add RIMM puts, but will wait a few days before I take off puts, depends on how the stock does in the next few days. I have puts expires in June, Sept, and January 2008. Time is on my side, I think, with iPhone out in June and economy slowing.
3. Another potential "bad" news for RIMM is, the SEC formal investigation implicates one of the co-CEOs, or both of them. If one of them or both of them are forced to resign, it will be a sell off for RIMM.
4. For uranium plays, I'll monitor them carefully, add on weakness. URZ and EMU can be easily doubled in 12 months. On the other hand, they can lose 20% in a hurry, which I'll view as great buying opportunity.

Once you're in, it's down

Market was higher today, still wait for the earning news and, my uranium addition of yesterday took a dive today.

1. URZ was down 5.7% and EMU over 4.5%. Even I bought early yesterday, some positions are under water already.
2. Once you're in, it stops rising. Volume in URZ was heavy. Let's see what happen next.
3. RIMM was higher again, pushed to new record and tomorrow it's the "preliminary" earning day, they should be able to spin whatever the number they have, so I think it's a good earning. Let's see how market react to the earning. I'll consider to add put on Thursday, if it shot up again on Thursday morning.
4. Now I have a balanced portfolio, with short ETFs, uranium stocks, RIMM, CFC and CNB puts, and some cash. I'll adjust later.
5. I think the market may push higher, but without much energy left. And I expect there are some fire left in URZ and EMU.
6. Adding CFC puts on any strength is a good idea.
7. I think by Friday, the market will be more volatile than the last two days. I hope my positions will come out OK by the end of week.

Continue to add uranium stocks

Today the market was flat again, low volume as well. Traders and investors were waiting for the news later this week. For me, another day followed last Thursday's action, I added uranium stocks and reduced QID positions.

1. I sold some more QID today and added URZ and EMU.
2. The entry price for URZ was pretty high, same as EMU. But I guess I can hold them long term if it doesn't work out short term. Both of them were overbought and were in a new leg up, I don't know how high they'll go this time.
3. Uranium price touched $113 today, from $95 last week. It's the biggest price jump for uranium, from all the data I can find. So very impressive.
4. The reason I added URZ and EMU is, once more and more people know the uranium story, it will further add hot money in URZ and EMU, so it's possible there is another massive rally ahead of these stocks. But a correction is expected too, just don't know when and how big the correction is.
5. I think I'm done repositioning for now, and let's see what market brings us next.
6. I still think the next big move in market is down, but now I have a greatly reduced short positions. New portfolio is updated today to reflect my positions.
7. Long uranium and short general market is my main idea, will adjust of course.
8. And I think uranium is great for long term, for 2007, it may touch $130-150, depends if the alternative energy policy is hot again once the primary heats up into 2008. So any sharp correction should be bought in URZ, EMU, FRG and CCJ.
9. I don't see the same fire and intensity in PM shares as in uranium stocks, of course, things can change any day. But I like the uranium story and like its momentum as well.

Week in Review

Market post solid gains last week, on light volume. Next week may be a volatile week due to two factors: The "good" job report last Friday and first week of earning reports for Q1. Let's see what happens.

1. Nasdaq gained 2.1%, Dow 1.7% and S&P500 1.6% last week. All the indices again moved higher to close the Feb.27th gap. They are not all closed yet, but a complete close of the gap and a push higher, we can talk about new highs for the year and Dow.
2. But if they fail, then they should retest the March 5th low at some point before we can say it's a bottom or another leg down.
3. I still believe, eventually this year, the housing market will further decline to a point that the economy is in recession. But now we have strong job report to show the resilience of the economy, even though the job report is a lagging indicator.
4. But short term, if earnings are good in general, we can talk about new highs.

What's next plan:

1. I sold SDS , part of MZZ and QID so that I have some cash to play on the short side and long side.
2. I added URZ and still think uranium is the best long term play, even though URZ is overbought, but with great momentum.
3. I probably will add more URZ if there is a sharp correction, same as EMU and FRG. Other than these three, I won't add others in uranium.
4. PM shares are solid, but SSRI is overbought and I'd like to see them lower before I buy.
5. Will continue to cut shorts and puts if they go against me. Raise cash so I can play later.
6. RIMM may push through 150. My bad decision to hold these puts. Let's see how market react to its "good" earning. It's not a bad idea to add puts after another round of shoot up after earning.
7. Another area is biotech, IBB is not a bad choice. Recently, several biotech companies got FDA approval and the prices shot up like crazy, so if this is a trend, then IBB is the best and safest play.

Another quiet day, another push higher

I took some action today, following yesterday's idea. Market was quiet, but just pushed higher.

1. I sold all my SDS, and some MZZ and QID today. I raised the cash so I can play them later.
2. I add some positions in URZ. Still like the uranium play, but I took initial position here and may add later on.
3. Short term the market may go higher, by reducing my short ETF positions, I can stay with my large QID positions longer.
4. And I still believe later this year, we'll have a tough time for the market.
5. RIMM shot up again. Will wait until it release the earning. If it's a good earning, and it shoot up in the morning, but could not hold, then I'll add put again. If it's a bead earning and shares sell off, then I already have enough puts.
6. Now at least I can have a good long weekend to research more on market.
7. CNB was very weak today, wonder if something is up. Play these regional banks with large mortgage exposure is a good idea, if the thesis of dropping housing price is right.

What's next:

1. Overall market short. Using existing Ultra short ETFs.
2. Play long on uranium.
3. Wait on PM.
4. Play short and puts on financials with large mortgage exposure.
5. Wait to add put on RIMM, the higher it goes before the earning, the better the chance it will sell off after the earning report. But I won't add put here, since I have enough.

Time to raise cash

Another day, another up day for market. Even though it's small, but one of my position's loss crossed over 10% today!

1. Yes, the market may go down, maybe next week.
2. But it's time for me to raise cash again. I can't let the portfolio get out of control.
3. So I'll keep a really tight leash and may cut it loose anytime. One position at a time, of course.
4. I put myself in this position, due to careless money management.
5. By keeping enough cash, I can always come back, if my next trade is right.
6. URZ, SSRI, these two my previous big positions, just broke to new high today. After I sold them on Feb.27th, I have chance to pick them up at 10-20% discount, I didn't do a thing. Instead, I was fixed to one idea and one idea only: the market is going to crash.
7. I just forgot my rule: keep an open mind.
8. I still believe the market will have more chance to crash than rally, but my rule is 10%, so let's take them out one position at a time.
9. Don't rush back with URZ and SSRI, it may punish me again on the way down. I need to take a break, and keep any new positions small.
10. One reader commented and wanted to buy put on RIMM after the "good" earning release, actually, I agree with you. I have the same thought. But, please keep in mind, use a small position, don't try to make a kill on one position. It's a very risky and speculative play, that's the only advice I can give to you. And, it maybe wrong, since I've been wrong on RIMM for the last 4 months! Yes, it may sell on news, like it did last quarter, but you never know.

Market keeps running

I'm truly surprised what a few good news can do to this market, a little better pending home sales number (by NAR, who is biased to report good number only) and some good news from Iran and UK's standoff of hostages, and the market took off in a hurry?! Nasdaq was up 1.2% and Dow 1%.

1. Now TA points to a push higher in the short term.
2. I still think it won't be able to start a bull run from here.
3. It may fail and then it's a faked break out?
4. And I still think from FA perspective, it's a down market for 2007, and I think TA will eventually catch up with FA.
5. I'm in bad shape again since all my positions are short or puts. It's wise to keep a great portion of portfolio in cash so you can get better entry for your wanted positions.
6. The Feb.27th's gap is not filled yet, so we still have a long way to go before I give up the bearish view of the market.
7. And PM is almost back to Feb.27th's level, so if I'm wrong this time, I may miss another chances since most my positions are in shorts. SSRI is very impressive, and URZ, EMU, FRZ were all higher than the Feb.27th level.
8. I missed my chance to add PM and Uranium when they're low after the crash.
9. It's frustrated that I'm on the wrong side of the market, and missed my favor sectors (PM and uranium) while seeing these stocks hit new highs!

Plan:

1. Still hold on to these positions and see what market brings us next week.
2. Still have chance to enter PM and uranium plays later. This time, my timing is off, but always get chance if you're right about the market now.
3. So let's focus on what's next for the market.
4. I think it is a little ahead of itself, the pending home sale number is not that good, and once market finds the truth (just like after the Fed's meeting, market rallied, once find the "truth" about Fed's real thinking, it came all the way back), it will correct itself.
5. So I'll keep watching, but from a very difficult position.

A quiet day on Wall Street

Just watched the NCAA man's basketball championship game between Florida and Ohio State. Because of Florida's victory, my picks in office pool finished first place!

Market showed resilience today after bad ISM number and New Century's bankruptcy news, helped mainly due to energy sector's strength and MA news. So it may again try to push it higher in this short week. Let's see what happens next.

1. I'll consider use mortgage's play as my next speculative play instead of RIMM. My RIMM puts are not working out for me, since I added put first on last November, it's another 4 months, RIMM is still strong. So I will not add any RIMM put any more.
2. Some financials related to mortgage should do poorly in the next few months, CFC, MTB,CNB, and home builder ETF like XHB.
3. I'll add puts on any strength on CFC, CNB and MTB.
4. I won't play the CFC bounce, since I don't know when another shoe is dropped, it's really difficult to play the swing. So be careful!
5. For the first time in a while, gold showed some separation from general market today, went up big compared to a slightly up market today. I'll watch gold in the next few days.
6. If UK's sailors are released soon, I think oil will drop, and in turn will hurt gold. But you never know what's Iran's next move.
7. I don't think market can break out this week, nor can it break down. It should be in a range unless we have some extreme situations.
8. Next week will be key since we have news on Good Friday and major earnings start to pour next week.