Be a Loonie: Postmarket Update 9/15/09

The US Dollar continues to get pummeled.  The AUD, CHF, and EUR look like they are about to take another leg higher and further away from their breakout levels surpassed two weeks ago.  The last two major holdouts are really the GBP and CAD.  I am licking my chops to get short the GBP if it breaks July’s low.  I don’t think the queen can ride on the back of the EUR much longer, at some point she must stand on her own two feet.  The Pound will see strength as long as the dollar continues to be whacked over the head by other crosses, but if it gets a respite, you could see some serious selling in the Pound. The Loonie has held out on us after racing to its early August high when crude was spiking.  If the CAD takes out that level, we could see crude go nuts to the upside breaking through 75.

I am loving my long book right now with great days out of HUN, JBLU, MBT, and GNA.  Dryships was a disappointment today to be honest, the volatility was sucked out of that stock as @stevenplace predicted.  I don’t mind some consolidation above the breakout level, it often provides a better base for which a longer rally can occur without a sharp pullback.  My lone short AMAG continues to move downward in a nice trend, but we aren’t seeing any kind of panic selling.  Frankly I don’t mind it, I have a short position that is making me money, how many other shorts are working that well in the market right now?

Take note briefly of the relative weakness in retail lately.  The RTH is under performing by a good margin over the last few weeks as we have seen crazy strength in many of the material names.  Be cognizant of the demand destruction trade taking place over the next few months if materials and energy continue to fly.

Someone bought a hell of a lot of corn today, along with many of the other grains and agricultural futures.  Either that or there was a was some panic short covering going on.  December corn traded over 200,000 contracts, that’s more than three times the average for the last three months. Corn closed up 9% on the day at the highs and now sits just below 350. That number happens to be important as it’s the panic low from last December.  I won’t pretend to know anything about the fundamentals of corn, so I won’t go there.  As well, I’m not a value investor, I don’t pick bottoms, and I’m not interested in buying something because it looks cheap based on whatever method of valuation you want to use.  What is interesting here is the sheer velocity in the movement today and what that might signal in terms leading to some momentum to the upside.  A break through 375 would give a pretty good buy signal.  I don’t trade straight corn futures, but I do trade the agriculture stocks, and right now I’m long CF Industries.  Oh how the mighty have fallen in this space since last year’s dizzying run, but man can these things go in a hurry if their underlying commodities get off the mat.

Game two of the hockey season tonight, and only 18 days until the real guys hit the ice for opening night.  I love fall in New York.

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