Amid the Biotech Madness, I Spotted an Opening in a Promising Small-Cap
Hedge funds dumped genomics plays like this one last week … but it was just as it announced a new AstraZeneca-linked deal.
A Broad Friday Rally Takes the S&P 500 Just Below Record Highs
Nine of 11 sectors rose, powering the S&P higher despite semiconductor weakness. Small-caps, though, posted a fifth straight weekly loss for the first time since 2022.
More Index Shorts
With S&P cash +53 handles, I am shorting another tranche of indices:
* $SPY $779.22
* $QQQ $752.61
Position: Short SPY (S), QQQ (S)
Back Shorting the Indices
With S&P cash +43 handles I am re-shorting the indices:
* $SPY $778.21
* $QQQ $750.63
Position: Short SPY (S), QQQ (S)
My Positioning
* I have no index shorts on as we start Friday’s session…
I am quite bearish but also – though many may still not realize – practical.
I currently have no Index shorts on.
For months I have utilized my $SPY/$QQQ Index shorts as trading sardines – selling strength and covering weakness.
This has proved profitable (as we seemed to have been in a trading range over the last two months). At some point I am hopeful that will change, with the primary trend turning lower – for many of the reasons I have discussed in my Diary.
But my adoption of shorting the ETFs will continue to be from the prism of “trading sardines” until I see a momentum change in the markets.
So, for now, they remain trading vehicles. As posted in my Diary:
* I covered a medium sized position of $SPY/$QQQ shorts on the Wednesday whoosh lower for a profit.
* I shorted a small sized position of SPY/QQQ Wednesday evening as the markets recovered.
* I covered the small-sized position on Thursday morning as the markets suffered (again for a profit).
Also, yesterday, while I was at meetings I covered most of my medium-sized $GRNY short, which I plan to reshort on strength as soon as today.
The same could apply to shorting the senior indices if the early strength continues….
Positions: Short GRNY VS
OpenAI Revenue Report Sinks AI, but the Rest of the Market Holds Up
An FT report that OpenAI’s revenue is running notably below earlier estimates sent AI shares sharply lower, but beneath the surface most stocks held up as Treasury yields eased and President Trump said the U.S. won’t attack Iran before the midterms.
The Russell Is Still Not Crowing
* For emphasis… the market continues to narrow
$SPY -0.29%
$RSP – 0.19%
$QQQ -0.46%
$IWM -0.82%
Positions: None
Things I Did Today
Here are today’s things:
* I covered all of my Index shorts: $SPY $772.55 and $QQQ $751.41 (for a quick profit from last night).
* I am back buying $PEP at $124.88
* I added to $MSOS $4.39, $GTBIF $6.61 and $GLAS $4.99
* I added to $GRNY short at $28.49.
Long MSOS common VL calls VS GTBIF S GLAS S PEP M
Short GRNY M
Covering Some of Last Night’s Index Shorts
With S&P futures -48 handles and Nasdaq futures -275 handles I am covering some of last night’s index shorts and moving to very small in size:
* $SPY $772.50
* $QQQ $751.39
Position: Short SPY (VS), QQQ (VS)
Stocks Slip From Records But Pare Losses After Strong 10-Year Auction
Long-end yields again hit multi-decade highs before a historically strong 10-year auction pulled them back, letting large-caps pare losses.