That was Fast!

Yesterday's flashy rally is already over. Dow down 230 as we speak. Should've followed my instinct to short the bounce. I remember seeing that Goldman had lowered its GDP forecast from 3.0 to 2.7 just a couple of days before and thinking that this blatant attempt to manufacture "good news" probably wouldn't last long.

In other thoughts, I read Seadrill's most recent quarterly report, from August. They already have the cash flow to pay $0.70 - $1.00 per quarter. I am kicking myself for not buying them when they went below $8.00 earlier this year. The reason I'm thinking along this line is that I am thinking more about what strategy I should pursue. Although I like Soros's strategy of identifying cycles and trends, instinctly, I follow a fundamental value strategy. So I am going to keep my eyes open for long-term values to pop up.

And it's nice to see NG back down to $4.16 and ABX under $36. These will be good values and I will be tempted when ABX gets 10% below the 50 day moving average and NG goes 20-30% below.

And I'm going to reverse my position on bonds. The short is a bad idea. Bonds and stocks are moving in opposite directions once again. If anything, I should be selling the short-term and buying the long term. See Sudden Debt's analysis of the bond market. Cash is even shorter term than three months. So sell cash, and buy 30-yr's.

Trades:

buy to cover IEF @ $91.94, -0.35%

buy 80% position 30-yr Treasury @ 104.4882, 4.230 ytm.