Summary and Risk Management

To recap our method here - we generally execute our orders around the open (when overreaction is most prominent).  The trades we've posted have been uncannily accurate, but that's not always the case, of course.  In general you don't see all our trades, only the high conviction ones.  We try to maintain dollar-neutrality (if not Beta neutrality) in our portfolio, so you'll often see one high conviction trade balanced by a less-conviction trade -- e.g. $BJK short versus $GDX long (less conviction) this morning.

RISK MANAGEMENT
In case you were wondering, we hold most of our postitions from 2 to 8 days, based on our backtested trading rules.  We set exit plans in advance.   Our exit plans rely on sentiment and news stops.  If the sentiment or news shifts away from the speculative aspect that we are trading (either long or short), then we exit before the "expiration date" of the position.

Shorting $BJK (Gaming ETF) and Buying a little $GDX (Gold Miners)

We've got a clear short on our ETF cluster for $BJK (recently added to our ETF list) which appears quite over-extended.  11% of the ETF is $LVS, and that appears to be where much of the positivity is being contributed.

I like to trade balanced long-short.  While very tentative, we're compelled to buy some of the weakest name on our chart - $GDX (despite it being still sentiment positive).  A substitute for GDX would also be $IEZ (oil equipment ETF).  These two have sold off, and may continue to do so.  If $GLD falls under Friday's lows, it's time to take some off the

RISK MANAGEMENT
In case you were wondering, we hold most of our postitions from 2 to 8 days, based on our backtested trading rules.  We set exit plans in advance.   Our exit plans rely on sentiment and news stops.  If the sentiment or news shifts away from the speculative aspect that we are trading (either long or short), then we exit before the "expiration date" of the position.

Shorting $NVDA and $XRTX and considering holding nose and buying $AIB

Looks like some blo-off topping action in tech yesterday and into the open this morning.  We got lots of shorts on tech names, especially good on overoptimism in NVDA and XRTX.

On the long side AIB is a true stinker - and insolvent bank, nationalized, with share price collapsing.  Always interesting to watch for a pause to the downside and pick up some shares.  Real angst in Ireland makes for good buying opportunities in select ADRs.

Unfortunately our site is down today... ahh, technology.

Buying $MO and $HAL and shorting $VZ and $VG

Seeing some value in Altria shares ($MO) due to being beaten recently and lots of negative sentiment.  Won't be a quick reversal to the upside on these.  Halliburton ($HAL) is likely to rebound a bit from here due to a spike in pessimism.  Some gold shares are nearing a short-term bottom (but not yet, give the decline a few more days).

On the short side (we generally are better at shorting on psychology) we're seeing topping on $SIRI (Sirius).  Yes, the company will survive, which is real good news, but you're likely to see some short term longs profit-taking on the recent 60% rally.  Also $VZ is looking a bit too enthusiastic on pad-related euphoria.  Wuite a few ways to prepare to short the e-pad enthusiasm.

Shorting $INTC and $ATPG - too much affection for these stocks

We're seeing very high levels of affection for ATPG (Oil and Gas deep water drilling) and Intel INTC (especially Intel chip's potential to be used in tablet computers).  While affection often keeps rallies moving, there is also a lack of negativity in these stocks which indicates they are vulnerable for a short-term pullback, since investors are only seeing the positive.  INTC has already been beaten down a bit in the past year, so its pullback may be kless dramatic than ATPG.

The rollover in metals will likely continue through mid-day.  Interesting that the futures were up initially overnight on (perhaps) Asian buying, but then were crushed by U.S. investors selling after the NY open.  In general we're seeing a swift and fast rotation out of precious metals for a few months (at least).

Covering Airlines $FAA and Energy $XLE arbitrage

The $FAA long and $XLE short arbitrage came in yesterday, so time to cover that.  We're looking at a Real Estate $IYR short and long Aerospace $ITA. 

Appears to be the froth coming out of precious metals again today.  Not a buying opportunity yet, and may be a short on a bounce.

$EXEL buy on the dip, covering $XING

Biotech stock $EXEL had a high volume selloff Friday, and while it is still up about 100%(!) since November, it has legitimately turned a corner news-wise (i.e., it will survive).  Worth looking for an accumulation point, anticipating a short-term (one week) bouce.

Recap of last week's trades:
We made 15% on our $XING short, and it's time to take that profit.  It's gapping up today (and will likely fade).  Covering short around mid-day.

Our Airline($FAA)/Energy($PXE) arbitrage we entered for this week may be widened by new fund flows.  We're looking for an exit ($FAA and $PXE are illiquid) and may re-enter is sentiment remains polarized between these two.