..Imbalances...

While they were talking up Global Imbalances in Berlin,  we were talking down on the imbalances we were seeing and not liking between DJIM closely watched stocks and the indices action all day.    We've seen days where DJIM stocks don't groove to the beat of the market, only to get it going big time the next day.  This felt different.  Our small cap plays don't always beat to the same drummer as we've experienced time over time, but yesterday was one for the memory books and it is hard to make out.    Maybe, it is because the low volume move in the indices was led by what is the majority of what makes the S&P...energy, financial, tech and there is just not too much of these in our play lists.   That's fine,  cause as a group we've cornered the fun stuff over the past while trading the lights out on Shippers, Solars, Chinese, IPO's and we could use a break...right?.. ..Yeah right, as if!...  We simply did not like how a lot of these recent plays we've traded performed, even though most held up and closed green with the market.    We trade on our gut to go with our heads and so we've got a pair of 'em here.  When both of us get that queasy feeling at the same time, we usually act upon on it and yesterday it involved reducing dollars invested overnight.  The same works with stock selection, it's quite easy to get a majority vote as its seldom we don't like the same stock at the same time.    Fortunately, reducing exposure was easy yesterday as it turned out because the majority was done before or around 10am thanks to the biggest holds gapping in the morning.   We always stress our buying and selling methodology, a big part of it is adding to positions we are playing late in the day and potentially selling them into good early action the next day.  This is taketh what they giveth and that is book your profits when they come in the form of a juicy gapper, especially in this volatile market that can evaporate your gains quickly.   We've said that enough here lately.  Our gig is to lead you to the stocks we trade, it is not to tell you how much is too much.  We can't measure ones greed.  Every individual's goal..needs are different and so selling is left to each individual.   Following our strategy, sell early is what we did with VMW and LDK after days of following them closely here and watching them balloon, even LDK since Fridays morning journal and its $52 open.  There was plenty to take off the table in points, especially in VMW after the last 3 days and if you didn't..you should rethink your strategy if you let these go down on you.   These two now go back on a wait and see for next entry.  Unfortunately they join many recent plays in such state.   The dwindling promise of the group of stocks they join making new set ups and therefore potential new highs makes looking for re-entry into these stocks shortly..unlikely.

So..our queasy feeling yesterday is not one of we are going to implode, but one of caution.   Simply, we saw nothing resembling a good set up for more action to the upside in most of the individual issues.  If you can't make money, what's the point!.  When this is hard fact, we sit back and wait.  This might be only consolidation on their part, but.... if another negative headline hits shortly, we fear these recent plays will need a hard hat because of what they showed us the past few days, especially yesterday.

The beauty of the market is this sentiment on our part can change so quickly, we will not even have time to lace up our runners full of cash to chase....