Not Much Action

I caught some trades in the morning with CHNR long and a little Citibank short but had difficulty trading EJ. That stock always starts strong and then gives back. I have it on my radar because one day I will reign victorious.It really does look like it wants to go, maybe with a better market.The financials were a bit weak as I thought and I am watching the next move out of that group. Oil and commodities just expoloded and it goes to show you what is hated one moment, is loved the next. PCU and FCX were beautiful, but they gapped up and I didn't feel comfortable with any of the entries that they gave me. I'll check in later.

Morning Look

Copper is hitting all time highs which is good for PCU and FCX in pre market. I think we are do for a giveback in the market this week and will be looking at more shorts than longs. YHOO is getting crushed as expected and MSFT is up about a buck. The financials could come in a bit this week and it is a light week for economic data. I will be watching oil for any signs of a breakdown. A couple names I will be watching today:

EJ,BOOM(possible bounce candidate) CHNR(over 23.50 on volume)SKF(if financials come in)PCU(on pullbacks)

I'M SHORT EVERYTHING COMMODITY

It was a phenomenal day at Upside Headquarters. I'm on record for weeks now hoping for a commodity reversal and a dollar rally. Today the dollar hit a 3 week high and with the Fed's one and done (or none and done) it just adds fuel to the fire. Last nights late post gave you a handle on what I was looking at today and I've been giving real time reports on twitter on the right side of the blog for the last several days. Take a look at the last two charts I posted today on GLD and DZZ. Gold looks to be cracking and I would love a volume thrust down tomorrow to help ice the cake. Oil is starting to move lower on a day when two different oil ministers said two different things, One of them said there was probably $30 a share of speculation in a barrel of oil and the other one stated that with the weak dollar oil could see $200 by year end. Go figure. The fertilizers stocks are in free fall and what looks to be a rotation is in full swing. Or is it just a sharp correction and a phenomenal buying opportunity? Probably a bit of both as there will be some beautiful long side snap back rallies in the ferts.

Watch gold and oil tomorrow as these groups go big on both the upside and downside. I am short USO and I am long DUG and DZZ and I took both of them home. I have a cushion as I made excellent entries today. The XME got torched today as well as names like PCU and FCX.

On the tech front I caught RIMM on a couple of beautiful breakouts. It popped on very impressive volume. I almost took it home but didn't want to push my luck. I do believe the stock is ready to run and I'm a guy that doesn't really trade the name much.

I will be back later with some ideas for tomorrow but won't do much of anything until after the Fed. Don't forget the China stocks, as there are some nice set ups developing there.

MINI RANT- it's now official. Dennis Kneale in my view has been passed the obnoxiousness torch from Cramer. Fox must be partying naked that they traded that guy. Reminds me of Tom Seaver for Jim Fregosi.
Also why does Fast Money have a person like Karen Finerman on a show like FAST money. Nice enough gal, but she looks absolutely clueless on a daily basis and has given us names like MSFT and MO. Wow,amazing value added. I guess anybody can get 2 and 20 at a hedge fund.

A Stock Pickers Day

I did well today with my own four horseman that I mentioned in the morning blog. FCX and PCU gapped a bit but I caught some entries mid morning. POT was a monster even though the rest of the group chopped and USO was in a nice upward trend until about 2 pm. Has anyone checked out BLK? It's down about 30 points from my original short two weeks ago. Wish I held that one longer.

AAPL and RIMM got knocked around and the chips got spanked because of the TXN report yesterday. BRCM is up a buck in the after market on a decent number. The financials dragged all day and I may take a look at BAC over the next few days for a trade. The stock yields about 7% here and I think that should give some decent protection on the downside, even for a day or short term trade.

If this dollar of ours can catch any king of sustained rally it will be party time shorting oil, gold and all the other fun stuff, In the meantime, shippers exploded with DRYS and EXM cayching some major short covering.

Lower Open

Oil is still hovering around $115 and the futures are guiding lower. Could be a good set up for later on the long side. If the dollar can ever catch a rally it will make for some great set ups on the short side in the commodity space. Stocks I'm watching today from the long side are EXM and PCU. An interesting quick short set up could be MOO if the ag. stocks ever want to come in for a breather.

Commodities

Well my commodity rollover theory lasted for about a week and things are ramping up again big time. I was lucky enough to make money in that window while it was open on the short side, but it now looks higher, at least for now. I now think oil could run to $120, not right away,but the range I had predicted for oil at $100-110 could easily be $110-120 now. I am also thinking of getting long PCU, even though I loved it as a short a couple of weeks ago. I like it as a long if it can break out over $120. It could measure to $132-135. Keep in mind it is very volatile, but that is the level I will be watching with great interest. I am also looking at gold again as a long but this time I would play it via DGP which is ultra long(2x the move) etf

Financials Ripping

and I stopped out on PCU at my break even, yup, a traders market

I Was A Little Early

GLD and USO gapping down and I covered, but I am still short PCU which is getting blasted, so you have to take the good with the bad.

Covered Some Stuff

I shut down my screens around 2:30 as things were just perfect for me and I covered some shorts. I covered USO GLD and XME and covered half of my PCU position. My average on PCU is around $105 so I have a small cushion. I'm cautious because I don't know what Mr. Market will pull out of his hat in the next couple of days, as today was the end of the month. I'll watch in here and see how it plays out. The USO was a beautiful short as it totally reversed the opening move up, and just collapsed. When oil got near $100 per barrel, which is my trading target on the commodity, i took the profit. 5 points in a couple of trading days is a gift. I think $97-98-110 will be the trading range going forward. XME was good for a short term trade and the volume wasn't there for me to hold overnight. My target on GLD was around $88.50-89 anyway so I was close. I believe all this stuff is going lower but when I am given volatility that goes my way I have to take it. I posted recently that the main catalyst for my "short the commodity space" thinking was the upcoming G-7 meeting in a couple of weeks. The story there, is a bilateral effort to somehow strengthen the dollar. The talk gained a little traction today with Paulson, and I think that will help the oil/commodity sector continue to sell off in coming weeks. Still a traders market in the space I think. I'm all cash and short PCU small.

In conclusion,this is a weird market. The sellers aren't defending their space and the longs don't want to take the hill. Unimpressive at best.

UPDATE-UNWINDING IN FULL SWING!!!!!!!!!

PCU-HITTING LOWS
XME - HITTING LOWS
GLD- HITTING LOWS
USO - MAJOR REVERSAL,HIT NEW LOWS
AG. PLAYS-ALL AT DAY LOWS
SLV- 10 POINTS OFF THE HIGH OF THIS MORNING

WHY CAN'T EVERY DAY BE LIKE TODAY????????

Dump Commodities

That's what Barron's opines this weekend, not that I have ever once listened to anything the paper has to say. Don't get me started, but $5 bucks to read what Abbey Joseph Cohen has to say is $5 too much. The gist of the article however highlights something that I talked about in my March 15 post regarding oil. I posted my oil trader buddy's e-mail, stating that non-commercial entities(dumb money) were very long oil futures. I mentioned that based on this, I was going short USO and caught an 11 point move down in the price of oil in about a week and a half. Bottom line the speculators were gunning the market higher.

To give you an idea of how serious the problem is, ETF'S, commodity pools and mutual funds(non-commercial) account for about 60% of all bullish commodity positions BUT looking at the smart money,farmers and folks who actually use the physical commodity, well, they have a net commercial short position about 30% higher than a previous record. I still don't think the sector has even started to unwind yet

STILL SHORT - USO,GLD,PCU- will look to add XME next week

Short and in Cash

I am not long at all here and I have a feeling next week could fade. I am short PCU,GLD and USO and will hold over the weekend and until further notice. I covered my XHB short for a nice little gain.

The Torch Was Passed to the Solars

I barely traded today, no feel and too choppy. My PCU short started to look very heavy to me today and I am hoping for a move lower soon. GLD looks the same way and may get short there tomorrow or Monday. Oil rallied on a pipeline blowup and it does seem to be range bound in the $100-110 area. Probably not a bad go long go short level to keep an eye on. The financials gave a substantial part of their move back, but the solar stocks popped out of their funk and had a good day. I don't know if we will retest the bottoms of the indices but I do feel the market will head a bit lower in the coming couple of weeks.The pullback so far seems corrective without the massive late day bruisings that we have become used to. It's hard to believe, but second quarter earnings season is almost upon us. Stay well and see you in the morning.

Can't Take Housing Sector Seriously

XHB got banged up pretty good and went out near the low of the day and the housing sector looks iffy at best. The financials gave some back and Oracle just fell short on earnings and that is taking the stock and the QQQQ down pretty hard here. Oil rallied big and I am still up on my USO short with my stop in place. PCU went up again and I am about a point down on my average short price around $105. I think GLD can muster maybe another point or two to the upside,technically speaking, but will then resume its decline. Still bearish to be honest.

Strong For Financials

I am short a one third position on PCU at $104. GLD looks pathetic and OIL is rolling over again

Short for the Radar-PCU

PCU- I expect this one to seriously fail in the coming days and weeks. It may muster a rally back to the 200 day ma which is around $107. At this stage I would expect a weak volume rally and then a big volume move down. Target $80-85. The dollar is going to keep rallying in my view.
I made a few points short on this at the open on Thursday and am glad it rallied a bit. Will be reloading the short and watching the action on Monday

Morning Look

Commodities are lower again into the open. USO just broke $80 in pre market trading. I believe my short was put on around $85.90, it is currently indicating around $79.40. I have a shorter term time horizon than most so I will probably start scaling out as the day progresses. I will have to judge the action. Will there be fear, will they be rushing to get out? I am short some PCU pre market here at $98.50 and am watching RIG for a short entry. Things change by the minute around here. XME was held from last night and the same thinking applies there too.

Two Shorts For The Road

Can't chart now but these look lower

PCU-short around $98.80

RIG-short at the break around $130

Staying Very Short The Following

XME,GLD,USO

With "DELEVERAGING" fast becoming the new buzzword it looks like it's time to piggyback the trend. What does that mean? Stay short commodities, in my opinion the move down has just started. There was talk today that Lehman picked up a bunch of Bear Stearns business and some prime brokerage was a part of it. Prime brokerage is the part of the business that for a big part, services hedge funds. Hedge funds crave leverage ( Carlyle Group received $35 for every dollar they had under management) That ended in bankrupcy this week. The conversation that Lehman had with hedge funds today, only guessing,went something like this, "we'll do business with you but in this environment the leverage we will give you is going to be much less than what your used to." When your prime broker has this conversation with you, one of the options is to start selling and reducing exposure, especially your winners, you know the positions you owned on 8 to leverage. That is one of the reasons for the unwinding in commodities today and I really feel it has only just begun. Just look at PCU and FCX today.

Unwinding of sectors can be very profitable if you are short. Just look at the dry shippers and the solar space in the last 2 months

Rant

Just wondering if the analyst that went to a strong buy at Merrill last week on PCU and FCX a combined 15 points ago was called into his superiors office today. Where is the freaking accountability. I posted my original rant last week when hearing this recommendation and went short XME for 5 points. I screw up alot but it's because of me. These analysts have jobs because the bulge brackets have to have them. The good ones for the most part are at hedgies making FU money and you will never hear what they are saying or doing. See you guys tomorrow and be careful. And don't forget to look both ways.