Ag Stocks: More to Reap?

Hello from New York, where I’m spending my day off from television doing a little bit of reaping of the Agrium (AGU) position I sowed over the last few weeks. Whether you’re Egypt or Wall Street, pigs invariably get slaughtered. There may be more to be made in this particular name -- and the ags in general -- but they’ve made a heck of a move in May. Not selling at least some of the position would be greedy and leave an easy, obvious but still amusing pun on the table. That’s not going to happen on my watch, Minyans. One-third of my Agrium has been put in the silo (where 95% of the profits immediately went towards the car industry and wasteful health-care control).

Here’s what I’m doing when not combining trading with gentleman farming:

Nordstrom (JWN) turned in a nice quarter in a tough environment. The stock is up almost 10% and I’m hulking out of my shirt, having been told by the guy who sells Thomas Dean dress shirts to the company (only in stores until they hit the website in July) that he can’t keep up with demand from the chain. I’m the Bill Cosby of promotion; if I don’t believe in it, I won’t talk about it. These shirts are the real deal and Nordies' recovery seems to be same.

Speaking of retail, JC Penney (JCP) has been all over the map after turning in a quarter softer than an over-soaked Nilla Wafer. It’s all about the close, as we say. From where I’m sitting JC Penney goes lower, though not so much so that I’d short it.

Also doing a whole lot of nothing, trimmed to a position size you could fit in your pocket and generally not inspiring me unless I compare it to Wal-Mart (WMT) is Target (TGT). The Minnesota juggernaut reports next week, is up big-ish so far for the year and is expanding its no-margin consumable business. I don’t expect Target to have a much better quarter than Wal-Mart, making it hard for me to want to hold the few shares I have left. Feels like a 5% gain/10% loss potential outcome set-up. The Target position may not make it to end of this post.

I was uncharacteristically too optimistic. My puny Target position didn’t make it to the end of this bullet point.

What do I like right now? Long weekends. Good books. Movies you don’t have to explain and Ultra Short ETFs in both the S&P 500 (SDS) and the Financials (SKF). I only talk about the weekends, books and movies in mixed company.

I also remain long Ford (F), which was described by a guest on yesterday’s Fast Money as “at a competitive disadvantage competing with the government and UAW." I chuckled for 2 consecutive minutes during the ensuing commercial break. Banks getting free money from the government and using it to buy risk-free bonds have a competitive advantage. I suspect Ford feels much less threatened at the prospect of competing with car companies run by hundreds of people who seem motivated by virtually everything except creating marketable, profitable cars.

Two keys to good trading: Luck, and the ability to recognize it. Just yesterday, I got long MGM Mirage (MGM) near the $8 level. It rose in a way that makes me smug even by my own standard, continuing to climb right up until I left for the city. Logging in at the NASDAQ, I was horrified to see a complete and hideous MGM reversal, turning my position from green to a fairly dark red during my train ride. With a memory like an elephant for losses and all the grace of Bobby Knight when I do, this turn of events left me “displeased." Right up until this morning when some kind soul bid the name to the mid 8’s, buying me out along the way. As the old saying goes, fool me once, shame on me. Fool me twice and I’m taking a ball-peen hammer to my own thumb in a fit of rage. Happily, I remain an ambidextrous hitchhiker and am now out of MGM.

With that I’m off to use my 2 good thumbs to do some writing and drawing with the kids. As Toddo has said repeatedly, S&P 500 875 remains important support. I’ve got 900 as resistance. From where I’m sitting (with a disproportionate amount of cash on hand and a slightly negative skew), JWN and S&P 875 are your tells of the afternoon. We’ve got some space before JWN pulls a Kohls-type of reversal (see KSS yesterday) or we lose 875. But if either should occur, you’re going to see plenty of folks looking for the sidelines for the weekend.

Always one who enjoys a little solitude, I’m beating the rush and hitting the road early. Make it a strong close and safe weekend, Minyans. We’ll resume the grind on Monday!