Thursday, January 02, 2014

Day One Tax Selling, Asset Reallocations, Disconnects

Today the chickens came home to roost for all those 2013 high flyers that were not sold prior to the new year. Many parabolic stocks finally sold off as people who deferred tax selling into 2014, finally pulled the sell trigger. At the same time, some groups of stocks ran up in the face of today's market sell off, giving new meaning to the term correlation.

There was no correlation with the indexes when it came to solar stocks, banks, and some special situations. In my old hedge fund days we would blast out a huge chunk of stocks into the face of any sell programs. Then just about all stocks would move up and down with the indexes. My eyes would be glued to the SPOOs tic chart on my Bloomberg terminal and I would be able to capitalize on market correlation in a much greater way than today.  Just look at these stocks that traded as if there was no the sell off:

BAC Bank of America broke out to a new high today. Volume was huge. I grabbed it in anticipation of the breakout in early strength today. Hopefully this one is a keeper for a swing trade of several days. All the banks were running today.

CSIQ Canadian solar is the crème de la crème of solar stocks which were all on fire today. I have traded CSIQ all the way up in 2013 and was chomping at the bit to buy it back as it formed a nice consolidation over the past 7 weeks. I mentioned CSIQ a few times last week and today it finally popped big time. A great breakout on high volume with strong relative strength. I grabbed it early in the day today and kept adding to my position as it took out important resistance levels on the chart. Text book gorgeous breakout. One of my faves.

PLUG A special small cap low priced situation. It barely broke out today on some company guidance and I'll hopefully sell it into strength tomorrow.  Strictly a quick trade.

IBM is not my ideal short, so I passed on it. But if you are a believer in the IBM death story, today may have been a good entry point. IBM may be rolling over here after giving the shorts fits.

BIG Capital Advisors and Seaview Partners are not responsible for your investment decisions. We believe very strongly in our opinions, but you must perform your own due diligence in making your investment decisions.
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