Friday, August 23, 2013

Indices closed UP .31% to .52%....NICE !!!!

Indices moved up above key level in Dow @ 15010.51 & S&P 500 @ 1663.50.

S&P 500 above 50 DMA @ 1659.41, high today 1664.85

RSI @ 46.72

CMF @ -0.033

Internals were :

UP volume led by 2.31 to 1 in NYSE & 2.07 to 1 in Nasdaq

Advancing stocks led by 2.10 to 1 in NYSE & 1.17 to 1 in Nasdaq

Net new 52 wk highs were leading by 32 in NYSE & 77 in Nasdaq

VIX Down 5.28% @ 13.98

Oil @ $106.42

Gold @ $1395.80

Canadian $ @ 94.85

In my portfolio :

Added 25% ANR @ $6.31

Here is portfolio weighting :

AUY  26.43%

ANR  17.02%

KOG  16.34%

BAC  15.49%

CLF  13.67%

MU   11.05%

Exposure 159%

Stocks which were UP 2% or more included KOG AUY
CSIQ JCP GMCR NFLX LNKD TSLA FB EXPE
RVBD FNSR YY EGO SLW AEM Z.....

Next post by 2 PM on Sunday.

BLOG does NOT give buy or sell.

Saleem

2 comments:

stocktrader_1996 said...

Hey Saleem,

Despite much mind-changing, mistakes, regrets, and confusion, the portfolio ended up 1.50% for the week versus the S&P's +0.46%.

Big Winners: CLDX (+17.3%), FB (+9.4%), Z (+5.2% from purchase), CLF (+4.9% from purchase), X (+4.0% from purchase)

Big Losers: RALY (-4.0%), TZA (-3.3% even with a good sell/buyback), SPRT (-2.1% upon sale)

I came into the week well-positioned and even sold some stocks early in the week ahead of the Fed minutes (KOG TXTR AMAT). By Wednesday, I thought sentiment had turned too negative and therefore sold all my TZA and added a variety of names (HLF CLF INVN KALU TCK X Z). By Thursday, I was already adding back to my hedge TZA (at better prices). Friday I picked up a few special stories in YHOO and OMED to use up the available cash. Here's the way the portfolio looks now:

Short/hedge (~22%): TZA (x3 short $RUT)
Long (~76%): FB CSOD CLDX FCX KORS YHOO CLF Z X TCK KALU INVN HLF RALY OMED
Cash: ~1%

This week sees earnings from some high-tech companies like SPLK, CRM, and WDAY. It will be interesting to see the street reaction to these cloud players, and I'll especially be watching SPLK, a company I love but with lofty valuation.

As I look back at my last week's blog, I could write almost all the same things on fundamentals, with more evidence appearing in the past week: US housing/autos in possible slowdown (July new home sales major disappointment), US consumer on pause (SKS, ANF, ARO, GPS, AEO all negative report/reaction), tech companies experiencing revenue and margin pressure (HPQ disappointment), and Europe/China in restocking mode with questionable longevity (China spot iron ore and steel down slightly this week).

All fundamentals aside however, the market closed at the highs for the week, surpassing the 50 DMA after trying and failing every day of the week before Friday. Also, the small caps outperformed the S&P nicely during the week +1.36% versus +0.46%, a positive sign. Finally, we have two different sentiment readings (Investor's Intelligence and notably this week, AAII) which showed investor confidence swinging/rocketing toward bearishness. All of these indications tell me the market will be tilted toward further upside unless the fundamental data really gets in the way.

Some other interesting thoughts for this week start with the Durable Goods orders tomorrow. Although people are expecting a weak aerospace sector to drag down the headline, the underlying data is expected to be very strong. Anything contrary to this should be carefully considered as it may indicate the economy is losing steam. Separately, we are also approaching the end of the month and this week could see window dressing help the averages and strong stocks. Finally, as the September congressional debt debate nears, investors may turn even more cautious, although there is some expectations that Republicans will "play nice" and/or both parties will agree to an immediate two-month extension to help ease the urgency/scrutiny of the talks.

Overall, I'm likely to remain cautious on the market, although my hedge is probably too large at the moment given the improvement in technicals and overly bearish sentiment. This week may provide some relief ahead of what may be a tumultuous September. I'm a better stock picker than a market timer, and I think I should stick more to that.

Good luck to all! :)

Stocktrader

Stocks100 said...

Hi Stocktrader,

Good recap of rationale for all your moves & good summary of your market read.

You continue to outperform by a wide margin..all due to your take on stock fundamental & technical read.

Saleem