Getting Short and Taking Profits

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 |  Includes: AVAV, CEAI, CY, HRBN, HZO, KZ, LEH, MBI, SDTH, SPY, UXG
by: Thomas Kelly

This afternoon I decided to put on my selling shoes and exit a number of my long positions. In addition, I got short in a hurry as we broke through the 1490 level on the S&P. In the past few days, I have continually noted that while the market was rising and things were looking decent, we had yet to see volume return to the market on the up days. That negative divergence was the key piece of information in my decision to sell and get short in a hurry, because the lack of volume on the upside hinted that it was unlikely that buyers would be numerous enough to absorb the supply that was going to come out of the market. So without further ado, here are my moves.

Sells

(NASDAQ:AVAV)–sold the entire position at $25.60

(OTC:SDTH)–sold the entire position at $9.45

(NASDAQ:HRBN)–sold the entire position at $20.20

(CEUA)–sold 20% of my position at $5.54

(KONG) Dec $5 calls–sold at a premium of $0.50

(NASDAQ:CY) Jan $30 calls–sold at a premium of $5.80

New positions (all short exposure):

(LEH)–shorted a modest position at $63.14

(NYSE:MBI)–shorted a small position at $32.63

(NYSE:HZO)–shorted a moderate position at $15.54

(NYSE:UXG)–shorted a small position at $3.26

(NYSEARCA:SPY) Jan $146 puts–I bought a sizable position at a premium of $3.25