A PIRATE’S LIFE FOR ME
The current market is a bandit. Better yet, a pirate. It isn't giving itself away too easily so that riches are bestowed upon every participant who dares to open the coveted treasure chest of the market. It isn't making the voyage too difficult so as to dismay or dissuade investors from making the trip. It is giving away gifts. It is taking away treasures. It is chuckling, spirited pirate who seems to have a lot more behind the curtain than people care to believe.
Here are some observations I am making regarding this piratical market:
- If you look at the major averages on a long-term basis, using weekly or monthly charts, the scope of the breakouts that is taking place in 2013 begins to smack you in the face. If you can't see it, then you don't know price. As difficult as this is to believe, we are closer to a beginning here than we are any conceivable end. I'm talking long-term here, not whether or not a correction will take place over the next few weeks or months.
- Bringing me to my next point: Yes, the market is overdue for a correction. What do you have to gain by insisting on and planning for that correction right here? Nothing. I have had one firm signal this year to hedge exposure via TZA in February. It didn't work out and I quickly moved on. Since then, I haven't had anything close to any signals to get short or hedge long exposure. There is a rather surprising contingent of market participants who remain (it has been months now) insistent that a significant correction is around the corner. These are the clueless and inexperienced among us. Pay them no mind.
- The easy money on the long side of AAPL expires on Friday. After Friday, I have AAPL becoming a choppy, irreverent drunk. A short opportunity will come down the line. It is not here yet, however.
- Portfolio exposure remains significantly under where it should be at this point. In fact, it has been this way a majority of 2013. 60% long and 40% in cash is the current allocation. I'm in the process of putting more to work in a new name. Opportunities that offer the proper risk/reward simply don't exist here. I'll have details on the new name later this week.
- If you did not check out the interview with David Tepper on CNBC today, please do so http://www.cnbc.com/id/100734343
- Anybody thinking about what US oil supplanting OPEC does for the US economy long-term? If not, get to thinking. Here is the story http://www.bloomberg.com/news/2013-05-14/opec-spare-capacity-to-surge-amid-u-s-shale-boost-iea-says.html
- TSLA is an enigma in its price movement. Enigmatic price movement often opens up dangerous doors to volatility that end up hurting those who are overexposed. There is no way to gauge when the TSLA train stops moving temporarily. However, the end of the momentum will bring a vortex of downside that will be difficult for most to handle. Long-term, I think the stock is closer to the beginning of its ascent than any conceivable end. As with any of these popularized investment names, with larger than life characters involved, the volatility along with the noise that accompanies it will be nauseating.
- Don't forget: Risk shows up quickly, whereas profits are a grind. Always keep that in mind as you watch this market scale the walls of infinity.
