Out of my shorts where I got in....

I sold FAZ and SRS for the price I paid for them... EEV for a bit less.

I also covered all my put shorts, most stocks were in the same place but I had over a week of time value that I lost which cost me a bit... I also added retail as a short a few days ago and that is the only one that really cost me to cover.... Lucky I covered PALM today as it is up 14% in the post market on their "Earnings".

We probably will pullback on Friday with all the bad news after hours but I didnt like the fact that we were pushing back toward my short 920 entry again going into the quarter end.

We could be making a head and shoulders top on the S&P but frankly I am tired of this market. The dollar looks to be breaking down yet again and the Fed extended most of the lending programs into 2010, both positives for this market.

I didn't want to be short if we were going to retest the highs at 956 or go even higher as I am tired of losing money shorting and wanted to get out before it got brutal again.

I said the last time I covered at 920 that I was taking a break but I am serious this time. I am not buying anything long as there is NOTHING I like here long but I am not shorting anything. It's hard to believe we have been in a narrow 30 point range on the S&P for almost 3 months now....

I realize they are probably just marking the market up for quarter end window dressing, like I said I am just weary of the whole thing at this point.

Futures are already off 30 dow points right now... here is to a down 300 point day on Friday for Dawgs. :)

More positioning

Taking a more bearish tone.

Sold VLO for a 40% loss. ouch. I'll get this one back in the low teens.
Sold AA for a 20% profit.
Sold GDX for a nasty 25% loss after the put options I wrote last month got exercised.
Lightened up on AUY/UNG a bit.
Short SSO.

My spec account is now "hedged".

Interesting futures data

Futures data often belies ... well, the future.

Let's take a look at the commitment of traders. Unlike most markets, futures markets are truly zero sum games, at least from a paper perspective. Thus, you can accurately guage who is long or short (big brokerages, producers, retail investors) and by how much by using this report.

The hyperlink is: http://www.futuresemail.com/cot/cotp1.htm

Notables:
retail investors and brokerages are long crude oil, and producers are short (Normal)
retail investors and PRODUCERS are long natural gas, brokerages are short (Abnormal)
retail investors are massively short the S&P, but brokerages are long
retail investors are short all duration goverment bonds

While this report isn't conclusive in and of itself, it does tell me a few things:
1) The street and the average investor believe oil is going higher
2) The average investor and nat gas producers believe nat gas is undervaled
3) The smart money is long the s&p, and the "dumb" money is short
4) The investing public wants nothing to do with treasuries

Bears have another chance….

When we broke 920 to the upside back on the first day of June I said I was standing aside on the short side.

We traded all the way up to 956 but now we have been bouncing around the 200-day moving average that was broken at the start of the month and we stand at 920 again.
My reasons for standing aside were that the dollar was in a freefall which was rocketing commodities and stocks higher.

The dollar has recently found support and bounced near 78 and is now holding well above 80. The S&P is holding support at its 200 day moving average but a break of that level would leave it very vulnerable.

The MACD, McClellan summation index, Put/Call ratio and stocks above the 50-day moving average have finally clearly rolled over to the downside…

Although they were all VERY extended for quite some time seeing them finally roll over is a good sign for the bears. Really instead of selling my longs when I saw all of these indicators overextended I should have waited until I saw them roll over. Overextended just kept getting MORE OVEREXTENDED until the last 2 weeks when they finally broke.

Friday is quad-witching day which has been positive 5 out of the last 7 times so we could have an “options pinning” up day on Friday but the bears have another real chance to take the market lower here. I have shorted some weaker names that have already rolled over… (WYNN, AMZN, PALM, COF, etc) Also if the market is going to roll over the emerging markets are going to take a big hit with the MASSIVE run they have had. EEV (ultrashort emerging markets) even though it is a ultrashort is probably a good play at $22. Even the old SRS and SKF might have some life but remember with ultrashorts you are playing with fire.

Really if you are playing it safe the best thing to do here is just to scale out of your longs and see what happens in cash at these levels. Of course I have been saying that since the mid/high 800’s so what do I know… :)

Like an old FB

Just like an old FB, I'm going back to the well and bought some FAZ in my IRA. Just 300, and with a stop at 4.2.

BTW: This pig of a market looks to be finally rolling over.

Out of Berkshire Hathaway & Susquehanna

Not that I don't believe in Warren anymore, because I do. But BRK.B has simply become a proxy for the market, thanks to the put options he wrote. I'm hoping to buy BRK.B back when the market tanks. 15% gain.

Susquehanna -- I grew up banking with this company. However, they seem to have acted like a big bank with their lending practices. 45% loss. I'll be buying this one back in the low single digits.

Back in AUY, AGQ

I agree with Dawgs that silver and gold are hitting the uptrend line. A break here would mean very bad things for gold and silver but I bought thinking the uptrend lines would hold.

I have wanted to be long these things on a pullback anyway and we got a nice pullback.

AUY at $9.25
AGQ at $43.90

I saw AUY traded into the 8's and wish I would have got a better entry but so be it. If they go much lower Tuesday I probably will dump them both. (I probably will set my stops right below today's lows)

Inflection Point: Gold vs. S&P

$$$

The ratio of Gold to the S&P has been steadily climbing, as the S&P deterioriates on a relative basis against Gold. In the past few weeks Gold has been testing the 1:1 ratio. I beleive the ratio will make a double bottom here at 1, and catapult Gold back to the driver's seat. This means relative strength for Gold and absolute weakness for stocks.

Hedging

Bought 10 SOJRZ (June 26 SSO Puts) for ~$0.45 each. Sold short 200 USO (Crude Oil ETF) @ 38.69.

Sold my remaining commodity plays out of my 401k, now up to 97% cash.

More position changes

Added to my UNG (natural gas) position since it is forming the final end of a bullish wedge, 1000 total now.
Sold my ACI (Arch Coal) position for a modest 15% profit to make room for the UNG.
Sold my DGP (Double Long Gold) for a modest 5% profit.

I am taking a bath right now on my additional AUY (Yumana Gold). But I am holding strong.

NYMEX Crude Reversing Contango

On the news of dwindling stockpiles of crude (hardly) but a real dwindling of gasoline futures (really), the NYMEX crude futures curve has flattened out dramatically. NYMEX July Crude for delivery is up $1.25, but NYMEX crude for delivery in July 2010 is only up 10 cents. The one year variance for crude is only marginally over $7, or about 10%.

I'm not saying we're going to backwardation overnight, but it will be interesting to see what happens. This could portend higher prices on the spot, but lower relative prices on the back months which means DXO (2X crude - 6 month) might not go anywhere but USO (1x crude - front month) may ramp.

Sold Sprint

When this next leg of the bear market begins, even if its 200 S&P handles from here, I don't want to be owning questionable companies.

You know it is getting later in the cycle when....

This website exists.....

http://isthisthetop.com/

Not that I am going to short the gap down we will probably get on Monday or anything... just saying....

Out of AGQ....

Small profit... they gapped away most of my profit though.

More action

Wrote four June 42 GDX (Gold miner ETF) puts at $1.2 a piece.

Sold a single lot of GDX to make room in margin.

Added another lot of UNG at $13.89.

Added another 200 of AUY at $11.20.

Another dabble in SDS

200 @ $54.50, S @ 52.30 (just below yesterdays absolute low).

Bought another couple lots of VLO

Tip the hat to RVASpeculator for the hint, a series of higher lows. Lowered my cost basis by $6.

Continue to add to my gold miner positions

Unfortunately, I have raised my cost basis in one account to 10.2 on Yumana Gold (AUY).

"Don’t Be Complacent’

“I wish to tell the U.S. government: ‘Don’t be complacent and think there isn’t any alternative for China to buy your bills and bonds,’” Yu said in an interview yesterday. “The euro is an alternative. And there are lots of raw materials we can still buy.” Yu said he is scheduled to meet Geithner in Beijing today.