Capital One Financial (COF) will be a long term short position for us so I am not going to sell the entire position but effectively we are out (0.1% stake remaining)
We started this short Thursday [Starting Capital One Financial Short] in the $14.20s, covered about half of this 1 day later (Friday) for a 15% gain and the rest here in the $10.50s for a 26% gain in 2 sessions. COF is the type of name which can reverse on you once the market turns happy (remember last week it went up nearly 100% in 2 sessions) Don't want to press my luck here but certainly there is downside to the $8s.
I wish my luck was so good in this lousy Apple (AAPL) short - should of shorted Research in Motion (RIMM) instead it appears. Apple does not want to close that gap at $83 like I assumed it would...
If the market reverses (up) I will take the modest profit on the short side and run in this name. It is stubborn as heck.
What I am doing now is reducing the numbers of names I have to cover when a rally does come - since I cannot watch constantly I'd rather have to deal with 3-4 trades rather than 8-12. So I'm keeping some sector/index ETFs on the short side and aside from Apple don't have a major short (individual equity) outside that name.
If the last stalwarts - Apple, Visa, Mastercard fell down and filled their gaps I'd be much more comfortable getting bullish. In fact I want to buy one of the two credit card processors but am wishing to see them a bit lower. They don't "have to" fall down and fill their gaps but they are close enough (6-10%ish) that it could happen and would signify the end of almost all the last hiding places.
Two of our favorite areas to short for 2009 will continue to be Las Vegas casinos and REITs - however in the former 2 of the 3 major public names are below $5 (can't short) and the REITs are a crowded short trade so even I am getting nervous betting against them. An epic short squeeze is awaiting this sector.... hope to squeeze out the door on my sector ETF before the rats do.
Short Apple, Capital One Financial
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