When markets behave irrationally both to the upside and the downside - get out !
I sold all of my margin buys from yesterday and sold 30% of my core holdings today.
I've probably hit 7, or 8 of 10 of these "bottom" bets over the last 15 months here; but when the tape, or the sentiment breaks strongly to the other direction - you have to be willing to sell without hesitation, or emotion and just walk away. That's what I did today.
Took 3,4,5,6% loses accross the board at the open - and happy to have done that actually. I've made those leveraged 10-15-20% quick breakout moves as well.
The market is acting totally irrationally to both the upside and the downside here. They are totally ignoring fundamentals and the numbers, or value; simultaneously on the upside for the stocks & sectors that have the momenteum and also to the downside for those like the Oilpatch that do not...
You can not fight, or win against irrationality in either direction. Maybe that's why everyone is riding this wave up and no one is willing to get off yet ?
The market seems to be telling us that they see Nat Gas going to $1.85 here - as that is how they are pricing both the OSX & E&P's here. The market never priced either sector for anything over $18 crude oil; so all of this talk about crude retracing from $26 to $22ish is ludicrous - as this market never valued the 'patch for anything over $18 crude & $2 Gas here anyway.
There unquestionably will be fortunes made from these levels; but - one can no longer use any rational means to determine where either the bottom is in the oilpatch, or where the top is in the mo-mo groups ?!?!?
When that happens - get the hell out on both ends of the market imho...
It would be prudent to be 65%ish cash right here in the oilpatch - as it is merely gambling, just rolling the dice trying to call a bottom here imho. The market is not reacting to anything fundamental. Get to a strong cash position and then set a trading plan.
Maybe re-buy OEI at $6 , $5 and $4 - dividing up your allocated funds to buy at these 3 levels. Who knows that we will not retrace to whatever level here ? We have totally broken down fundamentally and I think that the energy funds are spooked and are being used to raise cash for the tech sectors in case of any Y2K mass exodus and a run on redemptions...
No reason to think that they will not be cheaper tomorrow, next week, or the week after ?
I would definitely be a buyer here and I may re-buy some stocks today depending on the tape action; this could be "THE" bottom today - but no one can tell any longer with the irrationality in both directions. So only by "easing" back in gradually - and into 7% to 10% moves here; make the stocks come to you, don't chase 3-5% moves here; hell they being going down that much on a daily basis all week (VBG).
Oh well... looks like I may get some $32 SII back for Xmas... and yes OSX 62-65 should be a reasonable and prudent target to begin buying strongly, but watch the tape - because who the hell knows any more (VBG)...
Imho, the Street missed the earlier move in the Oilpatch; as it happened too fast for them to get on board. They were determined to bring this back (manipulate it) to levels where it became a no-brainer once again. Not in any conspiratorial type of manipulation. But the fund managers know from the specialists & market makers & major houses if funds are either buying, or selling strongly, blocks from certain sectors. Trust me; Fidelity for example can not make a major trimming move in the Oilpatch without virtually every hedge fund and every other single energy fund knowing it. This is where the hedge funds pour it on the short side - as they know they have virtually no institutional buying resistance. This institutional level sentiment knowledge and big block sentiment is the "wink & a nod" type of moves that are occuring to both the upside in the NASDQ and in the downside in the oilpatch imho.
But, it will change and when it does - the reversal moves in both sectors will be powerfull; just don't be caught standing on the railroad tracks facing the wrong direction from either freight train...
Be safe out there - this is one crazy, irrational market.
... I have not as yet been able to get a post go through to SI this am - the system is overloaded ? ... but, I just bought my first entry into VPI - a crude oil pureplay - $9 1/4 here is a gift at $18 crude oil...
PS I think someone owes ole GaryB and E Waves a little apology. I guess it wasn't over untill its over - was it ? Gary - has the fat lady sang yet (VBG) ?
I guess taking those profits at OSX 85ish wasn't so premature either, now was it PP ? |
