It was Option Expiry plus Spain & Italy Bond yields jumping to record levels, result was a down close.
S&P 500 closed @ 1362.66
RSI @ 55.08
Internals were :
Down volume led by 3.17 to 1 in NYSE & 4.22 to 1 in Nasdaq
Declining stocks led by 2.02 to 1 in NYSE & 2.89 to 1 in Nasdaq
New 52 wk highs led by 76 in NYSE & new lows led by 3 in Nasdaq
VIX UP 5.31% @ 16.27
Oil closed @ $91.44
Gold closed @ $1582.80
Canadian $ closed @ 98.75
Portfolio is BIDU,LVS,NTES,JCP,TCK,AUY
Here is my portfolio weighting as of tonight :
NTES 28.78%
LVS 18.92%
BIDU 16.51%
TCK 14.01%
JCP 13.59%
AUY 8.19%
Exposure 141%
Stocks which finished green included AUY,
LEN,M,PCLN,AMZN,GG,GOOG,ZNGA,
MU,FNSR,SNDK
Next post on Sunday by 2 PM
BLOG does NOT give buy or sell.
Saleem
10 comments:
SAELLM
Good day Sir
what a Friday
J Cramer loves APPLE
CNBC sau BIDU is going to get hot soon apple and bidu report next week and apple on Tuesday!
I may buy some apple --Cramer says with for the down draft on apple as he expect a slight drop in share price
My REITs are the Very Hot stocks for me right now.
My GE buy make work out for me as it had good earnings! Hope so
Very best to all
C
Hey Saleem,
I usually post my portfolio and some comments for you to inspect on Friday night. My wife put me right to work yesterday getting ready for a large party today. I hope to be able to post tonight.
Stocktrader
Hi C,
Buy AAPL after ER.....they may guide down for next Q.....
I am glad REIT & other stocks are working out.
Saleem
Hi Stocktrader,
Enjoy your party & rest up after that.
Maybe you can post on Sunday, your comment are always well thought out.
As per Warren Beatty movie " heaven can wait"...i am sure "comment can wait"
Saleem
SALEEM
Cut and paste on BIDU:
While many US market makers are shaking in their boots over the emerging markets in Asia - in aprticular Chine - they are doing what they can to water down how well these markets are growing. The news is so negative on Europe and the US - not all that bad - and with China leading Asian markets with growth at 8% to 10% many US investment houses are simply running scared. So they use CNBC to float reports that China may be bracing for a hard landing - well where is the tangible evidence? This is not hard landing with growth at 7%, 7.5%, % and even higher. China is doing well and I suspect Bidu will show that this coming week. Bidu is really down and should be trading higher - using multiples the market makers typically use for technology. Again, the reason why Bidu is down is due to the US market makers running scared of China's emergence as a financial leader. In fact, you can compare this with LNKD and BIDU. LNKD has a PE of over 700. Think about that for a minute. Why does LNKD have such a high PE while companies like BIDU and others seem so cheap? The reason is due to the manipulation of Wall Street. On another note, look how hard CMG dropped last Friday. Yet another indication of how wildly off the market makers are with their valuations. We will see Bidu eventually charge again and the best strategy now is to accumulate because the Chinese markets will be like the US markets were about 20 years ago. Buy now and stay long. Cheers
Hi C,
Very accurate portrayal of how i think vs MM deliberate manipulation...that will end soon with positive result from BIDU & many other companies.
Saleem
Hey Saleem,
It was another frustrating week as my hedges didn't provide the kind of offset I was looking for. Even some adjustments to the strategy worked out poorly. I was down 4 out of the 5 days, and the last day I was down more than the DOW and S&P despite the hedging!
The portfolio stands as follows:
ERY - 13.0%
SQQQ - 10.5%
CTXS - 8.9%
FIO - 7.2%
GWAY - 7.2%
NOW - 6.9%
POT - 6.8%
FCX - 6.7%
PANW - 6.4%
ADNC - 6.4%
MSTR - 6.0%
PFPT - 5.0%
APWC - 2.4%
(cash) - 6.5%
I realized the problem with the hedging. Since my main thesis is that surprising weakness will be US-based in the coming months, the TZA would best reflect this, as well as protect my portfolio made up of a lot of smaller caps. I will look to rotate into this hedge in coming days (currently on 3-day restriction with the ERY). Also, I am still uncertain how a US slowdown will affect a lot of my high growth, service-oriented companies. I may use post-earnings pops to lighten up in some names.
As for commodities, the slow growth may force the Fed's hand into more QE, maybe to the point of reducing rates on deposits. This could create surprising dollar weakness, helping all commodities possibly, but specifically helping gold a lot. FCX might be ok in this scenario, but I think I'll look for a gold miner or leveraged bullish gold ETF also or instead.
I missed a great move in GGC this week. It remained one of my favorites despite selling it recently, but I was afraid of an abrupt slowdown in housing activity. Their great acquisition of PPG's commodity chemicals business shows why I still try and pursue a hedged strategy of holding favorite stocks but shorting indexes (being long bear ETFs)--I want to hold my great companies since they often do great things.
The overall technical picture of the market looks questionable. We may have just experienced some double tops in the $SPX and $INDU, and lower tops in the $COMPX and $RUT ($RUT being awful). This negative divergence in the $RUT presaged our May-June fall, and I wonder if the same happens now. By no means is a bearish technical view the current picture (despite my leanings) as we need more days to start to form the setup for the future, but the topping formations are worth watching.
As you know, I view the fiscal cliff as a major headwind for the US economy in coming months. Ben Bernanke put this in perspective during his testimony this week--he said it could create a drag of 4.5-5% GDP. Until we get some resolution on this issue, I don't see how businesses will hire or spend to any degree--the risk is just too great at this time for a CEO to create an expense structure that might pressure future earnings. An abrupt stop to hiring and specifically spending would pressure the earnings of tech companies greatly so my medium term outlook for the $COMPX is very negative.
China may be forced to really ramp up their government spending in order to offset world weakness, so commodities are worth watching. Europe and the US could really get aggressive in easing monetary policy, despite the fact that the problems are not really monetary in nature anymore, but more fiscal. We will likely see politicians wait for the market to force their hand (as usual), so I feel it is safer to be out/short now while we wait for that situation to develop.
At the end of all this mess, there will be a massive buying opportunity on first half catchup spending. We could possibly make enough stock gains for 1-2 years in just a short time there. I am ready to go all long when I see progress on the fiscal cliff start to develop, but for now am comfortable even being net short.
There is a big week of earnings ahead, but I'm really looking past those. To me, the 2nd quarter, and even the current guidance for the 3rd quarter don't mean much. I think the situation deteriorates from here going forward, and I look toward CSCO's conference call in mid-August to maybe get revelation from the companies themselves, although the market may price things in starting sooner.
Looking forward to an interesting week...
Stocktrader
Hi Stocktrader,
Thanks for your effort in analyzing many angles which affects stock market.
Most of your points are valid & worth watching for.
Only comment i have about your short / long strategy.....this market is too volatile to net any benefit with short / long.
approach......
The way i see it, you are positioned to lose more with this strategy as evident last week....
You need a sustained downtrend to either benefit / offset......
I do not know any of your hedges @ all...doing some loud thinking based on your result of last week.....
Saleem
Hey Saleem,
My strategy in hedging is to be able to hold my favorite companies (especially through these upcoming earnings) while factoring out the overall market direction, allowing just the outperformance of my stocks to shine.
This did not work well at all last week, but this was mostly a function of improper hedges. If I had been in TZA instead of the SQQQ/ERY, I would have been roughly even on the week, which is fine since none of my companies reported.
Overall, this is a new strategy for me, so I'm sure I'll have to keep making adjustments until the hedging works as envisioned.
Thank you for the comments. I appreciate the view from other angles to help challenge me to make the best portfolio I can! :)
Stocktrader
Post a Comment