Wednesday, 30 July 2008

The gods of the market smile at last

By 10am on Tuesday morning, Flash Rabbit was in a cold sweat watching his capital going up in smoke. He had learned enough from his previous mistakes not to chop around too much, even though the temptation was more than there; but when his last remaining hope, his Dow long from 11170 threatened to get snuffed out he started to resort to prayer and nail biting. But he has held his nerve and stuck to his guns. One by one, his long positions were being wiped out, but then something which felt a bit like a miracle happened - Merrill murkiness notwithstanding, the market sputtered into life as oil and gold tumbled. So from being white elephants, United Airlines, British Airways (thanks to merger mania) and Ford (just...) have moved back into the black. And the other long equity positions suddenly looked much more healthy too.

This is the kind of disinflationary call (and subsequent re-rating of stocks because commodity prices are reducing so fast?) that Flash has been holding out for, and within a matter of hours his account has lurched from hundreds of pounds of losses into hundreds of pounds of profit. One by one, all the trades that Flash has painstakingly been building up have moved into place. It's a lovely feeling when it all works. The anxiety and fear factor over the last few days have been pretty uncomfortable, and some of Flash's capital has been sacrificed to the gods of the market in unpleasant drawdowns, BUT the reward if this move holds will more than outweigh the drawdowns.

The currency trades have been spectacular; as the dollar finally made a significant move - short AUD/USD, NZD/USD and EUR/USD all massively in profit now, and Flash intends to run them for as long as possible. Short EUR/JPY has been a monster, and Flash thinks it's only just begun. It's hard to see how the euro can hold on to its elevated status when the data from europe just gets worse, worse, worse. EUR is going DOWN., which in Flash's opinion would be a good thing for everyone.

The cloud in the silver lining is of course the financials - if HBOS unleashes a Pandora's Box of losses tomorrow and oil/gold decide to spike, we could see a nasty reversal. A lot of people are heavily invested in the long commodities/short financials/short indices story (what Macro Man quite correctly has called equity market crack) but it can't go on for ever....Although, the european banks are behind everyone else in their disclosures..

Overall, Flash reckons that the high prices are choking off demand - who's spending anything right now? Camping holidays; fuel economy; energy efficiency; low consumption lifestyles are in the zeitgeist...and if demand slows right down then how can inflation spiral up? What has happened over the last year in the property market could now happen in the commodities markets. Which will kill some equities - Flash isn't investing in miners - but which will enable others to recover, particularly those with good cost control, low debt, which are providing basic goods and services, or which cater for niche markets.

The disinflationary call - long large cap equities, long Dow, short commodities, long dollar, short euro, seems to finally be playing out as planned.

Crocs has been a crock of a punt though - still you can't win everything can you?

Friday, 25 July 2008

Ouch...but patience is a virtue

Flash was glad that he took some profit on his Ford position ahead of yesterday's car crash. His GM position got stopped out for a £2 profit too. He made the mistake of going even more long the Dow just before it decided to turn tail, for a whopping loss, and some more of his more recent gold shorts got stopped out for losses overnight too.

However, nothing he's seen (Australian bank writedowns and grim, grim data on housing notwithstanding) have changed his fundamental view and today's action has borne that out well. In spite of being slightly underwater once again (from a monster profit at one point yesterday morning) flash is sticking to his guns and doing his best to hold his nerve. So he's still very short gold and broadly long consumer-based equities - took a hit with scottish and southern energy but it's recovered today as he expected; and Stanelco sputtered into life today somewhat surprisingly so he took the opportunity to buy some more. The spectacular meltdown in Crocs has also puzzled Flash: yes their results were crap but they're exactly the kind of cheap, cheerful, funky gear that recessionary shoppers are likely to go for. So he bought a few shares at $4.80 and thus far they are showing a modest profit. Flash's other intelligent act was to go long on United Airlines right at the bottom, late on yesterday, when they were trading below 700; as of late this afternoon they're healthily sitting at the 820 mark. A decent call. So long as oil continues to descend (and he is ever-alert to the possibility that it won't but he can't see any reason why it shouldn't), Flash will maintain his long equity view so he has kept the older long Dow and long FTSE positions in place, despite the fact that they went almost to zero yesterday.

The currency calls are working fine too - short AUD/USD, short EUR/USD, short NZD/USD and - a bit more ropey but he's convinced it's the right long term view (although he may well get stopped out before he's proved right or wrong) - long GBP/EUR.

So - a quick summary of positions at close of play today: Long the following stocks, all on December or March futures: Avis from 12, British Airways from 225, Barclays from 261, Crocs from 499, long D1 oils from 18.3, long Ford from 480, long Intel from 2018 (he wants to buy more of this but hasn't got the cash right now), long Kingfisher from 96, UAL Corp from 698.

The ones that are still underwater, but he's hanging on in there - ASOS, Axeon Holdings, China Eastern Airlines, Lonrho, Stanelco, Scottish and Southern Energy, Workspace Group.

Wednesday, 23 July 2008

Playing with currency monsters

Over the last 24 hours Flash has turned his attention to currencies. The short gold trade has been a monster and Flash increased his risk substantially on this at 8am which turned out to be exactly the right call. At one point in the day he was up to 25% short gold - right now he has 15% of the fund short gold and will keep it that way unless oil decides to rear upwards - a few wobbly moments as expected today, but if oil breaks down below 125 then he can't see any reason why gold won't tumble too. He also noticed a Bloomberg report somewhere about plentiful gold supply and takes that into account too.

So today, despite all the froth and a thrilling rally that fizzled out this afternoon, was not really a day for equities, although all the equity positions are looking marginally more healthy than yesterday, with the exception of GM which went wobbly after some very unpleasant data on the weakness of the US economy. Given all of that, Flash may take some profits on some of the equities (he halved his GM, Citigroup and Ford position this evening) depending on how things pan out. However he's put a cheeky long order in place on China Eastern Airlines and will wait with interest to see if that particular stock will continue to do what BA and UAL have done over the last couple of days. On UK equities his longs have made steady progress rather than spectacular gains but he's sticking with them for now. He was tempted to bash a couple of speculative shorts on the FTSE and the Dow at various points in the day, just to cover the long, but couldn't quite bring himself to do it: something he might just come to regret in the next couple of days.

No, the real action today has been in currencies. First off this morning Flash increased his short EUR/USD position, and initiated three more - short AUD/USD, short NZD/USD and long GBP/EUR. All have been excellent. NZD helped along by the bank of new zealand lowering interest rates and suggesting that they could go further too. Another possible signal that inflationary pressure may have peaked? And he sees no particular reason to exit these trades right now - plenty of margin for any bounces. His overall call - that the European economy is in even deeper shit than the US - means that he thinks the Euro is way, way overvalued. So if he can just hold out he thinks there are some big opportunities to be short the euro against virtually anything. And if the BoE does increase interest rates, god help the housing market, but it'll be another nail in the coffin for the euro too.

Tuesday, 22 July 2008

Holding the line

If the rally holds, Flash Rabbit will be very happy indeed. Here's a breakdown of his current situation. As usual, lots of little bets in small amounts - far too much - does his head in when things start to go pear-shaped - but it's still working, so he's not stopping for now. His fund is up around 20% so far today so he's not complaining.


Very short from 977/975 on both spot and Aug and Oct futures - this has been extremely profitable this afternoon - thus far gold has broken back down below the 950 mark and Flash thinks that it could have much further to go - if it's going to keep pace with the rest of the commodity complex. Of course there could well be some more nasty results/energy crises/hurricanes/unexpected resource shortages to push the market into a screaming reversal but on the evidence of today's reaction to Wachovia, which would probably have triggered a meltdown a month ago, Flash is beginning to think that these sort of issues are already priced in. On the other hand he would prefer to have the comfort of a few short equity positions but hasn't managed to hold any of them for long enough to be worth it (he had the usual go at Thomas Cook, Dexia and HBOS at the tail end of last week, made a few quid, but pulled out when they threatened to fight back). Right now his plan is to try to hold his view long enough to build up some room for manouevre rather than just chopping in and out in his usual impulsive way.

FTSE and Dow

Both long and holding up well despite some wobbles when the Wachovia car crash was revealed. As for Apple, well, if Flash had any cash he'd buy some at a price of 150 a share or thereabouts - people may be greedy for even more profit but he can't see any reason why the shares should have got that cheap. Amex was a short he should have seen coming.


Long and firmly in the money on BA (up10%), Citigroup (a risky one this, but hey! up 10%), Barclays (up 18% from 261) Black's Leisure (tents and camping - up 3%), Firstgroup (up 5%), Ford (up 20%), Intel (up 5%), Kingfisher (up 18%), Scottish and Southern Energy (up 3%). narrowly missed out on a killer trade in United Airlines (UAL corp) today - took it up to 600 and then decided he'd had enough of a punt only to see them soar on to 730. Oh well.

Long and still not in the money on ASOS (down but off recent lows), BT (jumping around the 195 mark), D1 Oils (flat), Axeon (bumping around and not doing much), Stanelco (Flash is beginning to give up hope), Lonrho (not doing a lot) and Workspace Group (an outside shot at London's commercial/SME/creative industries property market).


Although he's been punked out of these trades numerous times, Flash just can't say no. Short EUR/USD and short EUR/JPY. Today has been a monster but he will have to wait to see if the dollar can hold this level. The question he wants answered - can anyone enlighten him? - is why on earth is the euro staying so high? And what caused the breakdown in the euro today? Just a little hint from the Fed that interest rates might rise plus oil pulling back and the dollar goes wild? If so he thinks there's a hell of a lot more mileage here.

But Flash is ever alert to the possibility that there will be a screaming reversal. For now though he's holding out for a longer rally. With every day that passes his margins get a little bit safer and his nerves become a little bit calmer.

Wednesday, 16 July 2008

Turning worms...on thin ice

With the banks absolutely in the doldrums (RBS heading for a price under £1 a share and HBOS bombing by 30p so far today) Flash is still stuck to his long equity position, despite the unpleasantness. There are some positive signs (he hopes..). Yesterday's long position in Intel looks like exactly the right call; Ford is bearing up well; BA's losses have been stemmed by the breakdown in oil; we all knew that inflation was going to be high but perhaps it is the case that the inflationary pressure has peaked, hence the tumbling commodity market as people come out of their long positions - momentum that could rapidly accelerate if there is a break to the upside in equities (although the oil companies and the miners which are such a mainstay of the indices could also be adding to downward pressure as people sell them off).

The one highlight - and a trade that has actually worked brilliantly - has been to short the euroyen cross - which has finally begun to break down significantly. As the euro weakens generally Flash thinks this momentum will accelerate. The yen has strengthened significantly and thus in spite of yesterday's gyrations Flash is sticking to his net long dollar, short euro view. He's currently in the money with a short EUR/USD. Plus his short gold position is beginning to look rather more prescient, but he remains anxious about spikes in oil and the supposed psychological security of gold - but there ain't much psychological security in buying in right at the top, especially if all the other metal and commodity indicators are heading for the downside. So he might just add to his short gold position as events unfold today.

Some regrets - not sticking with the short HBOS, short Dexia view - and generally not keeping enough short positions in place, particularly on the indices. Plain stupidity and impatience as caused him to totally cock up what could have been massive short wins- which would hedge the considerable pain that being long is causing right now.

However it's because of the learning from these past regrets that Flash remains long in a selected bunch of equities, although for now he's on the sidelines as far as trading any of the indices are concerned. On the other hand, this may well be clutching at rather too many straws because his screen is still a sea of red - wriggling downward worms on the thin ice of not really enough margin. But he's still in the game. So - as of 1pm - he is long Ford, Intel, BA, BT, Scottish and Southern Energy, ASOS, Workspace Group, D1 Oils, Lonhro, Firstgroup, Avis, Northern Foods, and his old companions Stanelco and Axeon Holdings. All underwater, but some considerably more than others.He also hasn't yet flogged off his remaining equities - Man Group, IG Holdings, and Tribal - from which he got a very welcome and unexpected dividend this morning. And if - when? - there is a rally he will be very pleased indeed. For the moment, Atkins and Game Group have drowned. As ever he admits to the greedy charge of trading far too many positions at once - but the amounts are small and the margins are as big as he can afford.

Tuesday, 15 July 2008

Grinding through the agony

(written earlier on today...)

Flash Rabbit is now seriously underwater and has had a number of his long positions totally caned. Some, like WS Atkins and one of the BT positions, have fallen by the wayside, and, as of 8.20am this morning, most of the others are hanging on by their fingernails. Flash took some profit on his 11100 Dow long but gave it back mis-timing new long positions – evidently the bottom has not yet arrived, and that’s hardly surprising given the grimness of the news. But it’s precisely because of the volume of the grimness that Flash is clinging to his long equities, short commodities view.

The one set of trades that have worked out reasonably well are the currency trades – Flash pretty successfully has been in and out of short EUR/USD and short EUR/JPY. Flash’s basic view is that while a lot of the attention has been on the unravelling of the debt crisis in the US, the omens for a deflationary bust are piling up in Europe and the value of the euro is looking increasingly untenable. Trouble is, the value of the dollar is also looking about right given what a dire state the US economy is in. But there must be an adjustment and Flash remains of the view that being long the dollar is the correct medium term call. However his long dollar positions are being stretched to the limit right now, but isn’t that the point of markets – to stretch tolerance to the limit?

It’s interesting that whilst nearly all other commodity prices have fallen over the last couple of days, oil and gold have stuck to their massive highs – and in the case of gold, as investors look for something – anything – that might go up in value – a huge spike in the price. But Flash thinks that this is underpinned by a quest for security rather than anything more substantial- if the price does begin to drop, it will drop very fast as the market gets flooded with gold and positions unravel. And if the rest of the commodity complex begins to drop as demand slows and inflation bites, it’s very hard to see why gold wouldn’t follow suit. For this reason he has opened up a short position in gold from around 972 (although he has been trying to short gold since about 945 and been caned in the process). Once again, he wishes he hadn’t closed out the gold longs that he put in place around 860. Flash, being impetuous and impatient, has once again failed to observe one of the golden rules of trading – of letting profits run. However he is learning about this the hard way as he sees his money going up in smoke.

Flash added to his short position in Thomas Cook yesterday – which helped to hedge some of the long losses, and he also went back short Allied Capital. He took a quick profit from his Starbucks short and tried to go short of Lehman Brothers but mistimed the entry and the exit points, being distracted by something else altogether. As ever, he wished he’d kept the erstwhile shorts in place. He doesn’t have any index shorts at all and would feel a lot more comfortable if they were there. This is deeply ironic because he has correctly called nearly all the key drops in the indices and made quite a bit on the way down, but just hasn’t managed to keep faith in his longer view that the market was heading for a very, very, nasty patch. Which is strange psychology really because he was absolutely convinced that it was the case. Right now he has a nasty feeling in the pit of his stomach but is trying to muster the courage to see his view through. If there is even a modest bounce he will have a lot to celebrate. There’s a lot at stake – perhaps rather too much – and if the next couple of days prove to be as difficult as the last few, Flash will seriously scale back his exposure. Locking the stable door after the horse has bolted? (Sealing the bank vault after the robbers have taken the lot?) Absolutely. But it’s a mistake he will never make again.

Thursday, 10 July 2008

Queasy but not so sleazy

Another unpleasant day yesterday as buyers headed for the emergency exit once again. Flash Rabbit is still in a buying mood but the herd over on Wall Street put paid to most of his gains as they headed for the vomit bucket on more bad vibes about debt, banks, recession and, that old nemesis of Uncle Sam, middle eastern militancy. Looking at the weekly chart on the Dow, it's still in a relentlessly downward spiral but Flash Rabbit can't help thinking that blue chip stocks are becoming ridiculously cheap. Cheap to the point of bargain basement discounts in the case of companies like General Motors, Intel and Ford. Interestingly the Asian and European markets haven't melted down in quite such spectacular fashion which leads Flash Rabbit to believe that there may be some kind of a bounce on the cards. On the other hand yesterday he lost such a lot of money trying to be long while the rest of the planet continued to be short that he is beginning to get a very edgy and nervous feeling in the pit of his stomach. How much more cash can he afford to risk? And if he, the tiny minnow micro trader is feeling that, how are the big whales and sharks feeling?

By about 5pm yesterday Flash had had enough. He kept trying to find an entry point to go long on the Dow and every time he did it his position got wiped out for nasty losses. So he stuck a short position on, cut his S and P long, went out for a curry, and came back with a satisfied stomach to find the day's losses returned. So now he's doing the bi-trade thing with a short Dow in place from 11300ish and a long Dec future from around 11000. Win win. (or at least no lose -lose).

Of course if oil does spike back up (and Flash Rabbit thinks that it probably will at some point, but not before it's adjusted down a bit, and the economy buys some time to make some adjustments for a post-oil world) all bets are off, as clearly not enough will have been done to curb the commodity bubble, which is feeding through to agony for companies and households everywhere.

Flash Rabbit has also been trying for days now to short the euroyen cross but it seems that those Japanese people just can't buy enough euros, and they hate their own currency. Why on earth anyone would want to buy euros right now is completely beyond Flash Rabbit - it seems to him that the European economy is on the cusp of an even bigger recession than the US and the UK as it has real structural problems, higher unemployment and is way over exposed to out of control property values and bad, bad debts. At some point the euro has to reduce in value otherwise inflation will put an end to any kind of recovery...In the same vein Flash Rabbit thinks that the pound and the euro are still ridiculously overvalued in relation to the dollar...but the market seems to think otherwise and for the time being, if his last current attempt to sell the pound against the dollar bombs for the umpteenth time, Flash Rabbit will retire from the currency trade.

So like his friend and mentor, Flash Rabbit is treating this, with a slightly nervous feeling in the pit of his stomach, as a buying opportunity. However he has hedged his buying with the usual sleazy shorts in Thomas Cook, Starbucks and Dexia, all of which are paying off handsomely. He would prefer to make money by supporting companies but he just can't afford to lose more cash.

Essentially Flash Rabbit is trying to do the decent thing and be optimistic in the face of such overwhelming pessimism- surely there are opportunities out there. On reflection, he has never been so long. A big risk. Currently he is long (in small amounts with big stops) ASOS, Avis, WS Atkins, Axeon Holdings, D1 Oils, Ford, British Airways, BT, Scottish and Southern Energy, Game Group, Workspace Group, Lonhro, Northern Foods, Stanelco, and public transport operator FirstGroup. And - a cheeky and risky one - but unbelievably cheap joke - Bradford and Bingley. 60% which are still showing gains. Which he sees as a positive omen. He's prepared for the worst but hoping for the best. And if he can muster up any more cash he might just buy into a long Intel position later this afternoon, depending on how things go.

Tuesday, 8 July 2008

Burrowing out of a hole

Yesterday was a particularly unpleasant day, as too-easy assumptions unravelled and the dow plunged mid-afternoon. Flash Rabbit had been smugly sitting back and incrementally adding long positions in various equities, congratulating himself on being ahead of the crowd (probably along with half the rest of the trading community) when carnage broke out as financial shares in the US furiously sold off. Within half an hour all the day's gains and more had been wiped out. And his carefully honed dollar long positions were taken almost back to zero but for quick paws on various buttons.

The only saving grace was - continued short positions in Allied Capital (which nosedived), Dexia and Starbucks - and a quick short for a few quid profit in MBIA. But the AMBAC short tanked- and then bombed back down...and most of the sneaky long equity positions got hammered. Result - losses, mitigated only by 60 points of Dow that Flash Rabbit managed to guess the direction of correctly. However he resisted the temptation to shut everything down and sat watching it through with a slightly queasy feeling in his stomach, wondering if when he woke up this morning he would find all his money had been stolen by the evil bears.

This morning hasn't been quite as bad - so far- as he thought it would be. Whether the market continues to hold back from the brink or lurch off another cliff is not clear. He is trying to be optimistic but given his pessimism about banks and debt he thinks there may well be more nasty shocks on the way.

What hasn't worked

Long positions in Axeon Holdings, ASOS, and Stanelco - all looking like a car crash - not quite stopped out but it looks almost inevitable that they will be. Flash can't work out why the market hates these stocks quite so much - to him they all look like a good prospect, but he's not going to throw any more money at them. D1 Oils was looking OK but then the G8 ministers decided to have a go at biofuels, combined with a tumbilng oil price, which knocked them back a fair bit.

Trying to find a point to go long FTSE and Dow Jones - although alertness has avoided carnage there. This morning Flash has long positions from 11110 and Dec 08 FTSE at 5450. So far so good, but the panic button is in place if the indices plunge when Wall Street opens this afternoon.

What has worked - just about (so far)

Long positions in Scottish and Southern Energy, Game Group, Firstgroup, and from yesterday - British Airways.

A big short position in Allied Capital, Thomas Cook and some smaller shorts in Dexia and Starbucks. The easyjet short was abandoned when they produced better than expected passenger numbers and oil began to ease back.

At the time of writing, the european markets have perked up a bit - but Flash will probably hedge his longs with a sell on one or other of the US futures before Wall St opens. One of his biggest regrets is closing out his S and P, FTSE and Dow shorts at the end of last week - he would be much more relaxed if they were still there.

He is still short EUR/USD and short GBP/USD (although vigilance is required); long Dec 08 and Jun 09 Euribor, but if the US markets continue to tumble and the dollar softens, then he might begin to think about abandoning the currency bets.

Friday, 4 July 2008

How to be long when everyone else is short

The main thing preoccupying Flash Rabbit is what to buy that offers some value. So he now has a shortlist of four or five stocks that he's roadtesting with small long positions. They are:

Scottish and Southern Energy - very profitable, large customer base, making strategic acquistions, with large expertise and capacity in renewables and therefore less vulnerable to oil - also a possible acquisition target for one of the larger global players

Game Group - released interim trading statement this week, and for no apparent reason the price dropped - sales are good, profits likely to be up, and we all know that even in a proto-recession demand for entertainment and computer games is insatiable, and teenagers like to spend money...

ASOS - innovative online fashion retailing - price/value conscious - likely to do well with the 21st century consumer - trading well even in this marketplace

Workspace Group - affordable low cost workspace for start-ups and SMEs in London, sitting on a ton of great, affordable real estate that will be even more valuable as 2012 approaches, notwithstanding everything else that's happening in the property market

D1 Oils - lots of people have had their fingers badly burnt with this stock, but anything that's an alternative to oil - particularly the jatropha proposition - looks interesting. And at this price even if it goes down further the rabbit won't lose much money. Thus far he is marginally in profit.

Of course all of these - particularly the retailers - might be wildly optimistic calls but Flash Rabbit thinks that while the rest of the herd is short it might be a good moment to try out a few long positions. He's fully prepared to be proved expensively wrong and for now has kept his short FTSE and Dow positions in place as some sort of hedge.

Other calls are trying to find companies that deal with environmental crisis - reclamation, dams, pollution clean up, that sort of thing, and anything to do with bicycles, high speed rail and public transport infrastructure - for this reason Flash Rabbit is taking a close look at WS Atkins and is hanging on by his fingernails to his long positions in Stanelco (bioplastics) and Axeon (innovative battery technology, but struggling this week after a very promising month).

Plus long the dollar against the pound (and, probably from next week, the euro), and long euribor (which proved yesterday to be exactly the right call). There will be more shocks to come but perhaps (and according to this wise rabbit) we should be now expecting something of a bounce, especially if inflationary pressure has peaked? Well, yes, but we need to keep close account of what happens to oil. Flash Rabbit can't see any reason why the oil price might drop soon - unless, that is, demand drops, which is possible given that energy efficiency has finally gone mainstream and the price is nightmarishly high already...

Still way short on the aforementioned banks, but may take some profits depending on what happens at the start of next week.

Wednesday, 2 July 2008

New shorts

Another day, another lurch downwards. The trouble is, at least half the market must be thinking short by now so this could be the perfect time for a rally. On the other hand oil is soaring and Flash agrees (even though he's a speculator) that fundamentally it's not speculation that's driving up the market - it's stagnant supply and soaring demand, coupled with the low dollar and high political anxiety in the Middle East and elsewhere.

With a recession now the No1 news headline, Flash is half tempted to buy some equities but it's pretty difficult to figure out which might offer some value, especially in his price range, given that he can't afford expensive resources stocks or specialist infrastructure or engineering firms. He's eyeing some retailers and even - shock horror - some banks, but still thinks that there's way more downside to come for the banks - after all they haven't even declared their losses for this quarter yet - so is keeping away from them for the moment. His short in Barclays continues to work. As for retailers, well, today he went back in long on Game Group (given that Nintendo hit an all time high recently and teenagers continue to get pocket money even in a recession) only to see the price plummet as the FTSE crashed down this afternoon. He has still got a long position in Scottish and Southern Energy and - a new one from yesterday - ASOS - which may or may not get stopped out tomorrow. His other longs - Axeon Holdings and Stanelco - are both looking pretty anaemic too, although D1 Oils is holding up.

So with this in mind Flash decided to put a bunch more shorts on today. He increased his short position in MBIA, Allied Capital and vulnerable Eurobank Dexia; he upped his short position in EasyJet just in time for it to plummet as oil surged; he also upped his short in Thomas Cook. Persimmon also did exactly what he expected them to do today. A new one today is Starbucks - with the US consumer staring at the prospect of $10 gasoline (welcome to the real world, guys!) the last thing they'll be doing is driving to the mall to buy a $4 cappuccino. Plus with coffee futures hitting new highs and everyone feeling the inflationary pinch, Flash doesn't think that discretionary corporate croissants and lattes will be flavour of the month for some time to come. He realises that Starbucks has historically been wildly profitable (and in Flash Rabbit's opinion, pretty mediocre and evil with it), but he thinks that the value adjustment needed to restructure the business will drive the share price lower before things start to look up.

Short Dow, Short SPX, Short FTSE. All substantially in profit with stops in place should there be an unexpected bounce. But Flash thinks that's pretty unlikely over the next few days.