Ladies and Gentlemen, traders of all timeframes – welcome to the Gettin’ and Jettin’ phase of this rally.
I’ve discussed the fact that I think these are the wee small hours before at best a consolidation and at worst a correction. For my practice, this has meant a higher cash balance across more conservative accounts. For the more aggressive pools of assets I’m running, this means a much quicker trigger finger when taking profits and a reluctance to let the higher beta stuff ride for too long.
Instead, I’m out there getting my profits and jetting back to the sidelines. New positions are being taken with much more specific short-term setups. My bigger fear between being under-invested and being cash-poor for a pullback is the latter right now.
The oil names this past week were an excellent case-in-point. Egypt was merely the last straw, they had been building momentum below the radar for months in the shadow of the technology rally. Breakouts across the coal, oil services, nat gas and even solar sectors were as viral as the protest movements across the Middle East that spurred them. And then, just like that, the bulk of last week’s gains went poof into thin air as Chinese rate hikes did their job – Crude is printing $86 as I peck this out, down from $91 and change in the heat of the moment last week.
I’ll give you another anecdotal example – I got the word from the trading desk that we were putting on a long position in something called Independent Bank Corp ($IBCP) one day last week. The instrux on the trade were to get long only below 3.40…
Luckily, I got the whole position on below that limit. Within an hour the stock was up 10% and by the next day it was up more like 30%. And the sell order came from the desk just as quickly – “take it and run”.
Despite my more cautious stance, I’m still seeing plenty of quick trades to steal around here. So if you need me, I’ll be out in the tape – gettin’ and jettin’.