Market Tsunami

Ok, the market is about to sell off 3% today due to nuclear scare in Japan following the earthquake and the tsunami. They are saying all companies are affected because of the supply chain effect ex. Apple needs components made by Hitachi and they have closed their plant. I sold of 2/3 of my money two weeks ago and now I am just waiting for this drawdown to finish itself. Oh yeah! My big scare now is the price of oil & Saudi Arabia. High oil can totally derail the stock recovery and put it in bear market mode. Now we are in correction mode so far down something like 7-8% on the averages. It's not over yet, and it's been like 3 weeks now.

What I need to do now is plot how to spend my cash. I made a huge mistake by buying NVDA and ARM two weeks ago after the first big drop. I totally forgot Rule 1 of trading "Protect principal" and in my case I have to time very carefully because I can't sell for a month. So I fell for the market head-fake after ARM went up 6% and I got slaughtered. Both NVDA and ARM are down 20% in 10 days. Killer. I made 30% on ARM the month before, now I gave up all the gains. However, I am gonna stick with those stocks. If anything I will put some 50% more in ARM to make up for the loss quicker on the way up. NVDA I am not touching. I will get rid of this position.

Now the question, where do I invest next. KKR has held up terrifically during this crisis. Going from about 17.80 to 17.20 where everything else (including banks) is freefalling. I still have about 1000 in KKR. I locked in some profits before, but at some point I have to jump in KKR and capture upside. But again, I don't want to make the ARM mistake. Capital preservation is more important than making a big gains. So far in my bets I haven't really make huge money on big bets. Actually my big bets have failed me. I have had gradual gains and rolled over money into successes. But AONE, HEV had some temporary gains which I didn't cash in on because I thought they will go up like XIDE and double up, but it didn't happen and then I missed the change in trend. So I should just trade the range and if it breaks out then put more money in it. But so far these electrical battery makers haven't gone anywhere, certainly the Obama hype hasn't moved them at all.

So where do I go when I am ready to buy. KKR, C, CVX (Chevron), MDRX, some money in ARMH to make money back. I will get AONE and HEV is smaller quantities (about 1000 each), definitely XIDE. XIDE is a hedge-fund holding right now. I might get burned but I think I can trade the range for a few months. Also I need to revisit SWC, palladium and copper. These are falling now but I thing commodities will recover somewhat after this selloff. They will be kind of alligned with the market, but may actually go up if the recovery kicks up. I should also have some money in OIL. If oil goes up, the market may not go up but OIL will go up due to increased demand and crunched supply if Saudi Arabia breaks out. I don't wanna call it foolproof but it sure looks that wya. I still have money left, but I need to come up with some ideas.

Energy: CVX (Chevron), EXC (Exelon),
Battery: XIDE, HEV, AONE
Tech: ARM, MDRX, (NOK/MSFT?)
Banks: KKR, C, WFC, (STD?)

Finally, the beginning

Ok, it is October 1st. Since it is the 1st, it is a good time to start blogging, no? I am not a buy-and-hold investor and I am not a day trader. I am speculator. I ride the wave on the way up, I short it on the way down. I have some restrictions at work - if I buy a stock, I can't sell for a month. However, I can day-trade ETFs. So my strategy has to be picking right on stocks over a period of 1-3 months or more and picking right on where the indexes and ETFs are gonna go in the very short term.

So...

I bought CRM a month ago even though I have high trepidations about their 200 PE ratio. But they keep going up. They have slid since the earning surprise, but if they have another one, they may jump another 10-20%. Still they are making me nervous, I can't hedge since it is 115$ per share so I can't buy 100 shares (it's like 11K)

However, SWC is doing GREAT. They had a 3 month low of 11.20 and now they are at 17. That's like 50% gain in 3 months. Not bad in THIS market. And it has been steady, since they are a top palladium producer and palladium is just getting started. I think I want to move the money from CRM to SWC when I get a chance.