The Bear Market Strikes Back

Quite an ugly day folks. Very.

Sad to see with all the government firepower, Federal Reserve backstops, and interventions we cannot hold any rallies. This is starting to cost real money to keep these markets at inflated levels... just flabbergasted that rallies cannot even last for 3 days anymore.

I do have 22% short exposure at this point as I applied almost every drop of cash to short exposure once we broke 1320 mid afternoon. But it did not do much to offset the damage - as we said in the past when the bears come to raid your top positions to the tune of 10-12% a day, 20% short exposure doesn't do much to offset that.

Here is some of today's carnage in some of my favorite names (my future buy list) - I am now openly worried about what would happen to these stocks if we break S&P 1260. Sheesh. What is striking is the weakness in foreign stocks; that have nothing to do with the pathetic state of domestic affairs.

PBR -8.6%
GFA -8.4%
RIO -8.2% (it was not a good day to be Brazilian, SID was down 8% as well, Brazilian steel)
MTL -5.8%
MOS -11.4%
CF -11.2%
POT -10.2%
CLF -8.8%
BUCY -8.4%
DO -7.7%


Other random pieces of carnage on my watch list
BIDU -10.7%
IBN -10.2%
MON -12.1%
FCSX -11.8% (geez, sold this in the AM for +8% so a 20% intraday swing)
FCX -11.2%
SGR -9.2%
X -8.7%
STP -8.7%
VMW -8.4%
ICE -7.5%
ACI -10.0%
NOV -9.9% (can't believe how weak this one is)
BTU -9.3%
DRYS -7.0%

It's never a good day when your homebuilder stock is among your top performers... unfortunately we now approach a strange place - the individual names are beginning to get interesting but the indexes are (once again) approaching a dangerous inflection point if/when we get back to that 1260/1270 level we just came off of. But volatility remains the watchword of 2008. The day to day action, and total opposite reaction to the previous day continues unchecked. I thought this time with all the rabbits pulled out of the hat by the Fed would at least afford us a 3-4 day rally but not even that is offered .... quite wicked action.

Comments

[Robster:]

the market is manic depressive right now - the underlying problems haven't gone away. Tuesday's rally was sheer delirium.

2008 Mar 20 05:31 AM

[haydete:]

I agree that panic overcomes homework every time. I spend more time studying how to set stop loss orders, because I guess to be on par with a "professional" instead of behaving like an "amateur" you have to protect against loss always, then gain profit occasionally.

2008 Mar 20 08:26 AM

[downnotout:]

I've owned and sold some of your favorites. Some I got out of them just in time. (others not so lucky) There is no logic, just selling for rumor and panic. It's been very ugly to do anything but follow the herd, if you're lucky enough to turn that quickly.

2008 Mar 20 10:57 AM

[Niksurfs:]

Even though this is a nasty correction and the blood is running in the streets, we still have not seen signs of capitulation, panic _yes_ capitulation obviously not. Problem is with these kind of swings, huge point losses and up days we may not recognize it is we see it.
I can't help but wonder what that point of capitulation would look like_ a major one day 1,000 point crash_could that be the sign. From these levels that would shake Confidence and damage us for quite a while.

I too have positions noted above and frankly the NOV story really has me puzzled.

2008 Mar 20 05:03 PM

[nyka:]

Hope you enjoyed today's down day on Wall Street. We can look forward to many more, thanks in no small part to short sellers like yourself.

2008 Mar 20 05:12 PM