Wednesday
May312006
End of Month Trades: S&P Futures, DELL, GG, COP , Bond Futures
May 31, 2006 at 3:57 PM
(chart from stockcharts.com)
I'm Going out long US equities as a short term trade from month end (today) until the beginning of the month (Thursday and Friday). Often, I see these reversals after a big down month (like MAy 2006) the first few days of a new month as asset allocators move into (the newly cheaper equities); what was down goes up. I bought June S&P 500 (ESM5) futures position at 1265.50. My plan was to play it for about 5-10 points. I ended up selling out of half the position at 1270.50 just a few minutes later. Now I'm waiting to sell the rest tomorrow into the buying I expect.
Other recent trades:
I continue to add to my bond short (ZBU6, ZNU6) as 10-year yields approach 5.00%. I plan to lighten this position as 10 year treasure yields approach 5.2%. Inflation is hard to stop once it gets started. I think some historians at the Fed understand that but the markets do not.
Bought a small position in computer seller Dell Inc, (DELL). At a p/e of 17 the stock starts to look favorable. I really like that Michael Dell was buying stock; a founder picking up his own stock is always good sign. I do think the stock will face some serious tax loss selling in the Autumn. Unless there is other news, I'll wait until then to pick up more.
Bought some Conoco Phillips (COP) for my mother's IRA. I just can't get enough of this one. It's a petroleum company that actually owns and refines oil. It's got a p/e of 6.7. At a p/e that low you would think the company is going to hell in a hand basket. It's not. It is just that everyone thinks that oil is going back to $40/barrel. Well everyone except Warren Buffet (who's been buying too) and me. Even if oil just stays where it I feel this company is a crazy bargain.
Added to my position in GoldCorp (GG). Yes, the fire sale being help by the market for gold producers is still on.
I continue to exit (sell) a basket of closed-end bond funds I bought last year. Discounts to NAV are in the middle of their historical range and I don't want to be long a bunch of bonds if I think that long term US interest rates and inflation are going higher. (bonds go down when interest rates go up).
DISCLOSURE:
I have a position in every intstrument mentioned above. I also own a position in Berkshire Hathaway (BRK/A). Nothing in this blog is meant to be a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only those that I think might be interesting. Consult your own investment professional before buying or selling any security.
I'm Going out long US equities as a short term trade from month end (today) until the beginning of the month (Thursday and Friday). Often, I see these reversals after a big down month (like MAy 2006) the first few days of a new month as asset allocators move into (the newly cheaper equities); what was down goes up. I bought June S&P 500 (ESM5) futures position at 1265.50. My plan was to play it for about 5-10 points. I ended up selling out of half the position at 1270.50 just a few minutes later. Now I'm waiting to sell the rest tomorrow into the buying I expect.
Other recent trades:
I continue to add to my bond short (ZBU6, ZNU6) as 10-year yields approach 5.00%. I plan to lighten this position as 10 year treasure yields approach 5.2%. Inflation is hard to stop once it gets started. I think some historians at the Fed understand that but the markets do not.
Bought a small position in computer seller Dell Inc, (DELL). At a p/e of 17 the stock starts to look favorable. I really like that Michael Dell was buying stock; a founder picking up his own stock is always good sign. I do think the stock will face some serious tax loss selling in the Autumn. Unless there is other news, I'll wait until then to pick up more.
Bought some Conoco Phillips (COP) for my mother's IRA. I just can't get enough of this one. It's a petroleum company that actually owns and refines oil. It's got a p/e of 6.7. At a p/e that low you would think the company is going to hell in a hand basket. It's not. It is just that everyone thinks that oil is going back to $40/barrel. Well everyone except Warren Buffet (who's been buying too) and me. Even if oil just stays where it I feel this company is a crazy bargain.
Added to my position in GoldCorp (GG). Yes, the fire sale being help by the market for gold producers is still on.
I continue to exit (sell) a basket of closed-end bond funds I bought last year. Discounts to NAV are in the middle of their historical range and I don't want to be long a bunch of bonds if I think that long term US interest rates and inflation are going higher. (bonds go down when interest rates go up).
DISCLOSURE:
I have a position in every intstrument mentioned above. I also own a position in Berkshire Hathaway (BRK/A). Nothing in this blog is meant to be a recommendation to buy or sell. I do not give investment advice. Do your own research. Do not rely on anything in this weblog to make investment decisions. I do not log all my trades here. I only those that I think might be interesting. Consult your own investment professional before buying or selling any security.
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