MarketBook 4/29/08

Let’s dive right in, because based on the amount of red I have been seeing on my trading screen for the past two days, I am not in a great mood. 

Firstly, MSFT is still killing me; however, I finally wised up a few days ago and hedged my position, which for some reason I’m riding out, by shorting the stock.  Since I got to experience Microsoft’s full declines firsthand, I am holding out because I do anticipate it will rise again in the near future, once we get through this situation with Yahoo!  In the meantime, I’m not going to let myself lose any more on this abysmal company. 

Another major position that I have taken is to jump on the dollar rises that will hopefully continue through the Fed’s meetings today and tomorrow, as well as profit from the resulting declines in oil that should also come about for any rate-cutting that should take place.  So, I’ve gotten back into UUP and DUG, which I haven’t been into for some time now. 

I have also gotten back into financials, but no I do not think they have recovered, which is why I am shorting financials.  I am short Wachovia (WB) with some May puts that I got in on before they announced more write-downs, as well as PNC, which I have shorted outright, based on the idea that I think news of more write-downs will be coming from them.  I have also shorted another multi-national financial firm, whose name I am choosing to withhold at this time. 

After the Fed news comes and goes, I am planning to make a move on ag-related commodities and I have been charting that path that I am hoping to take for a while now.  Some of the obvious directions that I will consider will be DBA, MOO, and JJA.  I have also stuck my foot in to test the waters with SYY, but I am ultimately holding out a few more days or even weeks on this move into agriculture, because while I think commodity prices in the world of wheat, corn and grain are only going to rise, I believe there is going to be less room in terms of where the most effective entry point will be and which route will ultimately be best to take.  Further, I think this increase will be ongoing, ultimately lasting for years, so getting in isn’t as urgent as getting out of oil will be. 

Let me point out that I am not short oil yet; however, I am playing the ultrashort, based on a simple macroeconomic news play.  I am sticking to my $120-$125 a barrel range for oil, but not enough to actually put my money where my mouth is.  I am completely out of oil, in terms of being long. 

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