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Long The Technicals, Short The Fundamentals

14 October 2009 No Comment

I continue to be in the camp that the U.S. economy is wounded and that the fierece market rally of 2009 is mostly technical in nature.  As the market takes another leg up and moves towards an assault on 10,000 for the Dow and 1,100 on the S&P, I’m going long the technicals and short the fundamentals.

Still Holding Shorts

I continue to hold onto short positions in the sectors that I see continued weakness in the real economy, namely retail, the consumer and commercial real estate.  I’ve accepted that these positions might remain in the red for some time, maybe even into the summer of 2010 and beyond.  If my view on the real economy changes, I might make some moves here.  Otherwise, I’m staying put.

Long S&P Calls

As we broke through the 1080 mark this morning, I added some November SPY calls preparing for a momentum burst through 1100 potentially this week.  I’m going to have tight stops here so that I minimize any losses on this position.  I will keep you up to date on this trade.

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