I've been so far incorrect about any serious weakness in the generals, but I still will cling to the belief until proven otherwise that in a full blown correction, no one can feel safe. Including those hiding in the generals - namely coal and fertilizer and natural gas. So far each time I have cut back on these anticipating such a selloff, the institutions have been loading up. So I've been on the wrong side of the trade. But I'm going to try it once again and cut back exposure a bit (obviously yesterday morning when they spiked would of been a better time) but with the S&P 500 now below 1275, and still no real fear in the market I am worried they will find their time in the woodshed - but again, I've been wrong on this for the past few weeks.
- Fertilizer: Mosaic (MOS) down to 1.6% stake, Potash (POT) down to 1.5% stake, CF Industries (CF) down to 1.2% stake, Intrepid Potash (IPI) down to 0.7%
- Coal: Alpha Natural Resources (ANR) down to 1.5% stake, Massey Energy (MEE) down to 1.3% stake, Arch Coal (ACI) down to 1.1% stake
- Atwood Oceanics (ATW) - great chart - but simply worried about the market - down to 1.3% stake
- Natural Gas: Encore Acquisition (EAC) which we started last week and have a quick near 10% gain, down to 1.0% stake, Cabot Oil & Gas (COG) down to 0.6% stake
I've increased short exposure across the board.
I will assume this is a great fake out, and the people will jump back into the generals on this minor selloff, and I'll be wrong (again) - selling off some of my most favorite names sort of flies into the face of logic, but with some of these companies nowhere near any chart support and yet to face any adversity during a month the markets sold down nearly 10%, I am being cautious. Just showing you what I'm doing, and why - and we'll monitor from there. As I type this of course the market is drifting back up to 1276... (see it did not take long for that head fake to play out) Tricky market right now. Very tricky. I can make a case for a nice oversold 5% bounce here or a traumatic selloff - so it is very difficult to have any game plan for the near term since these are completely different outcomes and both are probable.
Long all names mentioned in fund; long Mosaic, Alpha Natural Resources in personal account
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