I hate doing this but the only way to make any dime in this market is to rapid trade. Since that is not what you can really do in a mutual fund we're sort of stuck - flailing aimlessly until the market lets stocks continue in 1 direction for more than 3 days in a row.
With Massey Energy (MEE) we bought a lot going into earnings late yesterday and now ONLY because the market is horrid and if crude falls a few bucks this will go right back to the low $70s, I am going to sell some of what I bought yesterday to lock in a quick 10% gain. If this market had any sense and saw the long term potential for the stock I would not do this, but hey oil is up slightly so its ok to buy commodities again -- unlike yesterday when you had to sell them because oil was down -- unlike Wednesday when you had to buy them because oil was down -- unlike Tuesday you had to sell them because oil was up. See how inane this market is? I keep saying this is a trendless market and the only people making money are people who did what I just did. Buy whatever is beaten down, knowing the market will reverse 180 degrees within 24-48 hours. And then sell it immediately. Because in the next 24-48 hours the market will turn another 180 degrees. And your gains will be vaporized.
It sounds pathetic but it is what it is. We'll lock in a few gains and once sense returns to the market we'll be loading back up on this name. I cut Massey Energy (MEE) back down to a 1.5% stake (from 2.5%) with sales in low $81s (we bought yesterday @ $73). Note - I did not sell off the full stake I bought yesterday because the story here is simply too good. I expect if oil drops a few bucks for Massey to lose its entire 10% gain, and I can buy it back in low $70s. Because crude oil prices determine the fate of all the world. Or so say the quant hedge funds. And they rule the market.
One day this pattern will break. And we can actually hold a stock for more than 24-48 hours before watching all our gains disappear. I'll be happy to be wrong if Massey just runs up and up and up as it should. If the stock can get back over $85 maybe we'll see a divergence in coal from crude, since a higher high will have been formed. We'll see - I don't go against a pattern until the pattern breaks.
I repeat - this current market only works for daytraders. No one else.
Long Massey Energy in fund; no personal position
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