Kelly's Tuesday Trades

I made a number of mostly small moves Tuesday, so I’m going to go down the line and quickly go over the changes to the portfolio.

(GLD)–I shorted a moderate amount of the GLD Tuesday at $90.00. I was looking for gold to open up again to play the fade that I talked about yesterday. It opened pretty much as I scripted it, and so I entered a short that at the moment appears to be very well executed. Gold really looks tired and looks poised to roll over here, and somewhat benign inflation today (and most likely tomorrow) certainly are going to undermine gold over the short term. The volume in the GLD today was massive, and that seems to signal a short term top.

(QQQQ) Mar 49 call options–I also have talked about getting long via options over the past few days, and was looking for a real washout that would provide the opportunity. I thought Tuesday’s trade offered that opportunity, and so I chose to get long the QQQQ by buying the March $49 calls at a premium of $1.35. Obviously, the Intel results this afternoon are likely to pressure the QQQQ tomorrow at the open, but I’m watching intently to see if we can hold the August lows. If we do, I think that will be a very bullish sign.

(WB)–I decided to just nibble at Wachovia Tuesday afternoon, buying a small position at $34.65. I don’t really know where we finally draw the line in the financials, so I have kept the position size small. However, with Wachovia trading at less than book value, I think it is certainly worth a look here.

(HRBN)–I reentered by buying a small position at $21.21. I continue to believe that Harbin has some really incredible opportunities ahead of it in 2008 (especially the potential Beijing subway contract), and the stock has pulled back to its 50 day moving average here. That makes me want to jump back in.

(CHCG)–I bought a small position at $3.91. Frankly, I think the stock has acted quite strong in the wake of the selling pressure so far this year. The stock still looks cheap on a valuation basis, and is building a base on which to spring higher.

All in all, I put a decent amount of money to work Tuesday, although I certainly did not bet the farm. I really think we have seen the short term top in gold, and being long gold might be painful tomorrow morning. I’m hanging on to (RIC) because I think it has real near term upside on Q4 results, and I have my other junior partially hedged through covered calls on (VGZ). I am less sure that we’ve seen a short term bottom in the market, but I was encouraged that we bounced right off the August lows today. If we can hold the line again tomorrow, I think that you can start buying more aggressively. We are so incredibly oversold here that it would be a pretty momentous occasion for the market to tank again tomorrow, but if we do, I might be reversing some of today’s moves.