I organize my trading world by way of the watch lists in SlopeCharts. I have one list called Bear Pen, which is where I keep all the equities that I believe are good short candidates. When I create actual positions, I do not remove them from the Bear Pen but instead put the same symbols in a different watch list called X-Puts.
There is almost always a set of leftover symbols in the Bear Pen which are promising shorts but, for one reason or another, aren’t live positions yet. Below are those seven symbols and a few words about why they aren’t actual positions at this time.
The first of these is Advanced Micro Devices, which threw off good profits for me, but which is so horribly oversold that I don’t want to stick with it. If the semi sector gets a big bounce, I’ll cheerfully go back in.
Bank of America was a surprise profit for me. I bought puts on it Monday when the stock was quite high. It plunged Tuesday, and I sold those puts at a 98% profit. Sadly, the stock kept falling, so I missed out on some extra profits, but, meh, it still worked out all right. Anyway, this is the same situation: it seems so battered the “easy drop” seems to be done.
Conoco Phillips was a terrific energy short, but here again, I took my profits and am waiting for better prices. I think that dashed horizontal represents what might be a good place for re-entry.
International Business Machines is one which, if conditions are right on Monday, might represent an immediately opportunity. The big rally on Friday pushed prices back to more appealing levels. Of course, if the market is strong overall, IBM could easily slip to lifetime highs, and I’ll not alone do nothing, but I might even kick it out of the Bear Pen altogether.
Mondelez really ticked me off. Over the course of a month, it blasted 30% higher, and early on Friday I finally screamed “Uncle” and got out (to be clear, I didn’t buy puts at the bottom, but I definitely failed to anticipate the continuation of strength from it). The closer it gets to that broken trendline, the more appealing it might be for re-entry, and it could well be that I exited it at a really lousy time.
On Semiconductor, like AMD, threw off great profits for me, but it’s so low right now that I wonder if there’s a big bounce ahead. I may be wrong, because there are certainly instances in which a sector is so weak that it just……..keeps……….plunging. to be sure, ON is a fabulous top, and if I had the fortitude to stomach the ups and downs, I’d probably just stay short and let this thing unravel over time. Suffice it to say that any substantial rally on this would be welcome, since I’d love to be back into such a clean position.
Lastly, there is Seagate, which is in the throes of completing a very large top. I want to see what tech does early next week before possibly committing to this, because you can see how hard it has fallen already.
The bottom line is that I have 13 bearish positions right now, but with the 30% cash hoard I’ve got sitting in my account, I will be very pleased to get back into at least a few of the above items if the conditions are right.
