"Low Risk" Intermediate Term Trading Ideas

P/E Compression (and dividend divergence) Trade -- Short NASDAQ (QQQ) / Long Dow Jones Industrials (DIA) [Equal Dollar]

Thesis: In a mini-deflationary event, dividend, low P/E stocks should outperform high P/E, low dividend stocks

Apple Mobile Phone Wars Trade -- Long Apple (AAPL) / Short Research in Motion (RIMM) [Equal Dollar]

Thesis: Apple's market share of the mobile phone market is only 5%. RIMM has not released a competitive phone in years -- old technology.

Ag Boom Trade -- Long Mosaic (MOS) / Short Whole Foods (WFMI) [Equal Dollar]

Thesis: Food input costs will continue to increase helping Mosaic's demand, pressuring margins of grocery chains like Whole Foods.

Exxon underperform Trade -- Long Suncor (SU) / Short ExxonMobil (XOM) [Equal Dollar]

Thesis: Exxon continues to barely replace reserves on non-acquisition basis. The only thing propping up the stock is it's cash flow and share buybacks. Puchase of XTO energy will pay dividends in the long run but I expect Exxon to underperform more highly levered players like Suncor.

Tactical short opportunity

Today's gap up from the GDP number should provide a good entry point for additional shorts. I'll be looking to add to my sds in the 34s. Fade this gap!


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Get shorty

Yesterday I Added 200 more sds at 33.8; no stop. 800 total now. Plunging dollar yen indicates stocks will be plunging.


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No longer a ZROZ, bonds matured

Sold my 25+ year Treasury Zero Coupon ETF (ZROZ) @ $86 yesterday, ~7% gain. Will buy back in the low 80s (this treasury move has been parabolic!).

Also, Waste Management bonds matured. Total Return on those guys 24% over 3 years.

Back down chop

More sds (200) at 32.5. Stop @ 31.5 target $36


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Closed Gold Shorts

Sold all 1000 of my DZZ (Double Short Gold ETN) for $12.16 for a ~ 5% gain.

I think Gold has bottomed here +/- $20.

New long -- Zero & Monsanto

Monsanto, the global leader in agriengineering, is on sale. I picked some up at 54.59. It's got a 2% yield. It's at decade lows.

I also picked up some treasury zero coupon bonds (strips) in the Pimco ZROZ ETF. Price $80.23.