ULTA

I took a 1/2 short position in ULTA.
ULTA came out in an intermediate scanning that I performed today.
This scanning is still showing many gold miners as potential short candidates, but I do not believe that it is safe to short gold miners. Most funds are hedging their long positions with shorts on the miners. Once they sell their longs, they'll need to also cover their shorts. This is what happened yesterday and continues today.

ULTA has been weak for many days. I'll exit the trade if we break above 126.


Pascal

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[QUOTE=Pascal;27044]
This scanning is still showing many gold miners as potential short candidates, but I do not believe that it is safe to short gold miners. Most funds are hedging their long positions with shorts on the miners. Once they sell their longs, they'll need to also cover their shorts. This is what happened yesterday and continues today.


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I believe that the hypothesis of a widespread strategy by large players of shorting precious metals and miners while going long the general market has proven true for most of this year. However, I also believe that now is the time when we might witness an end to that strategy.
For tax purposes, investors and funds who are selling long winning positions in December with big YTD gains may also be tempted to sell their long losing positions with big YTD losses (and PM miners are the champion losers for 2013). Therefore, if distribution grows, especially among leading stocks, it might be hard to see sustained accumulation in PM miners before next January. But, paradoxically, if the market holds near its highs, it could help the miners.
Billy

I covered the ULTA short at the opened an got execution at 92.09
Bought one SDS long position at 31.43 as the potential short candidates are not too attractive right now.
Watching the rest of the market for now.


Pascal

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