Finally a medium sized coal correction. Names across the board down 10%ish. We've been waiting for this "rotation" out of the best and into the junk (financials, retailers, et al)
I am starting a position I should of started a long time ago - Walter Industries (WLT) with a 250 share purchase in the $95s. This creates a 2.1% stake. I am going to scale in because this might just be day 1 of a multi day rotation (if past is prologue). If not, and "this" is the correction - at least we have something. [May 1: Walters Industries - the Most Amazing Company]
I also added to Alpha Natural Resources (ANR), Massey Energy (MEE) and Arch Coal (ACI) replacing what I sold yesterday [Bookkeeping: Cutting the Generals] plus a bit more - these names are down 9, 11, and 8% respectively. I am hoping for a few more days of this action and seeing if we can get these guys nearer to the 50 day moving averages, but some are close or at that spot already. I'll stagger the next purchases when/if these stocks fall another 5-10% and increase the size each step of the way down.
I also added to Cleveland Cliffs (CLF) - iron/metallurgical coal - here at the 20 day moving average of $107. I own very little so need to add some exposure even if it's early.
Seeing this sort of action, which we've been waiting for - is making me incrementally more bullish. (key word incrementally) When there is nowhere left to hide, and everyone has taken some pain - that usually means a bottom should be forming. Last to go appears to be natural gas... when (if) that gets hammered I'll feel comfortable we probably have reached a near term bottom. However, without the ability to predict the future we'll simply begin layering into our favorite long term stories as they take these hits.
Long all names mentioned in fund; long Alpha Natural Resources in personal account
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