Bookkeeping: Adding to our Two Government Plays - AeroVironment (AVAV) and Emergent BioSolutions (EBS)

Submitted By Trader Mark
I do have to say, despite my reluctance to trust my eyes, I am seeing some excellent charts for the first time - my favorite kind. Stocks in uptrend, pulling back to support levels. So I'll mindlessly buy as I tell neigh bors how Obama will return their jobs within 6 months.

Obama hearts defense - remember, he does not want to come off as some liberal wimp. He is Midas after all. We own two stocks that rely on the kindess of government and right now the federal government is turning into a charity case. They are a not so secret Santa.

We have my favorite chart set up in both these names - now let it be known, if you buy this type of chart you need to be ready to eject because these set ups (dip buying) only work if the support holds.

As part of his worldwide stimulus plan, Obama will be putting a robotic drone in every house in Afghanistan - hence we love AeroVironment (AVAV) - you can see this stock is a rock over the past few months. After peaking its nose north of $36 Wednesday (I cut some that day but not enough to mention) we have a pullback to the 50 day moving average of $32. This is one stock I don't even cut back when it breaks support because it has a military line in the sand there at $29-$30. I'm a buyer in scale here at $32s increasing from a 0.9% stake to 2.4%. Until AVAV breaks north of $38 this is a trading vehicle; north of that it's a "breakout".

As part of his United States stimulus plan, Obama will be sending every American an anthrax vaccine to put in their medicine cabinet. Emergent BioSolutions (EBS) is just the candidate

for this effort. Folks, I'm a fundamentalist at heart but every time I look at this chart it brings a joyful tear to my eye. I won't even explain it; if you've been reading the blog for more than a week you can see the beauty of it rivals that of Jessica Alba. Now that Jessica is off the market, it is time for me to get serious about EBS - enough of the 1.2% positions, 1.5% positions - we're going hard core and making this a 3.0% position. (ok it's not really hard core, back in the old days when this market could be trusted my top positions used to be 6%+ but this is "relatively hard core") Show me a better chart; I dare you. (Yes that could be a double top - bearish - at $26, but please I'm too busy writing love poems)

So with today's purchases we're now back to a more Obama friendly long exposure, lowering our costs in stocks/ETFs that have better charts (and we have more conviction in) than a lot of the stuff we sold earlier this week; while still holding very high levels of cash and awaiting the last hour action to see if we need to offset these longs with more short exposure. Remember we are bears below 840, bulls north of 870 and Switzerland in between the two (neutral). I tell you, it feels great to buy with such (ahem) conviction and ignoring all news and just going with "hope" - now I know how most of Wall Street operates. It really is much easier on the mind this way - walk in 9:30 AM, buy on hope. Repeat. A much simpler life. Now I see what everyone was doing in October 2007 while I was sitting in stunned revulsion asking "does anyone realize what is facing us?" Ignorance is bliss.

Long both names mentioned in fund and personal account; long Jessica Alba in personal account

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