Paulson & Co has accumulated major positions in gold. But I used the strength in it, to sell FCX at 50, and to sell the rest of my fertilizer stocks. They've had a good move, and the selling the last hour was enough for me to book some nice profits.
I put the money into some of these cheap shippers (avoiding DRYS though--too much inventory overhang), as a derivative play on commodity price increases, as I go where the most leverage is available in this market, and into some of the cheaper gold plays as a leveraged play on reflation. Unlike these institutions with unlimited dollars, I need to get the most bang for my buck.
Every time we have a pullback, the world seems to think the market is just going to roll over. I don't think that's going to happen. What we do see, however, is a bit of a roll-over in some of the extended financials. Of the majors, I'm only playing BAC, as I think that number still has some good upside, unlike WFC, JPM, COF, AXP and GS, which are still extended, and are still sells on any rallies. I advertised my sales on these numbers on May 7, and I still think they have a little more downside work left.
These numbers will give you another chance to get in, as the bears now have some new faces to pimp their case, and today, Whitney Tilson wants his day in the spotlight. Did anyone see the nonsense on CNBC on him today? The so-called "subprime savant?" Now he's giving baseball analogies on timing on housing and commercial real estate. Last I remember, Richard Fisher from the Dallas Fed was the last guy to give baseball analogies. How did that work out?
The only thing that has changed on Wall Street is that a ton of stock was issued in these numbers, and these players will gravitate to those plays that they can goose the most. So we always have this rotation. That's all these pullbacks are.
Traders are looking where they can make the most money, as quickly as possible, and this market is setting up very good trading opportunities. But so many people freak out when any of these groups have any weakness, that they miss the action under the surface.
And all it is, is traders looking for alpha!