Naked Hedge Fund

There has been a lot of talk on both sides of the value fence lately. The bulls and “value investors” are beating the drums of value everywhere the eye can see, while the bears are screaming its all fraud.

Who to believe? The “value investors” definitely lost a lot of street cred with the last meltdown as they were all the last ones to get out. Explaining the whole way down to the bottom how stocks were cheap because they are always basing everything on old numbers and earnings expectations that can always fall off a cliff.
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Sorry for the dramatic title, but Im trying to practice eye catching marketing ploys like CNBC and Yahoo Finance. Anyways as you noted yesterday we made the rotation to short when we sold our long SPY at $110. I got a bunch of emails today (don’t ask me why everyone refuses to leave comments) wondering why the change?

Went long today at $109.40 on SPY.

The market has been a choppy mess as of late and been very hard to get a solid trend. Currently the trend is up and we are above the 50 Day moving average, but we still have the 200 day moving average to deal with around $111 on SPY.

Below are charts with markups explaining the situation.

The bulls have got the market churning again even though a week earlier everything was completely different. A bottom call from Doug Kass and some “value buying” later we are back to where we started with our recent short. Chart…

Today was a viscous day to the downside as it broke through the support that we mentioned a couple posts ago. This triggered our stop on SPY and now have a short position with SH, since the portfolio for this site is either long or short at all times…. no cash. Unfortunately with gap down…..