Indices were given a jolt of taper by October, by Fed Governor & another called it a mistake of delaying taper. That resulted in selling form start to finish & indices closed near low of the day, Quad witching did not help either.
S&P 500 @ 1709.91, low 1708.89
RSI @ 63.02
CMF @ 0.089
Internals were :
Down volume led by 4.22 to 1 in NYSE & 1.57 to 1 in Nasdaq
Declining stocks led by 2.61 to 1 in NYSE & 1.14 to 1 in Nasdaq
Net new 52 wk highs were leading by 128 in NYSE & 162 in Nasdaq
VIX @ 13.12
Oil @ $104.75
Gold @ $1332.50
Canadian $ @ 97.03
Stocks which closed green included AMCC JKS
LULU TSLA POT NFLX FB KOG MU
CF TXTR AMZN EBAY FFIV V
PCLN GOOG GRPN RALY
WYNN GS......
Portfolio weighting :
AUY 20.33%
FNSR 17.60%
AMCC 16.61%
CLF 16.32%
BAC 13.40%
ANR 10.10%
JKS 5.64%
Exposure 172%
Next post by 2 pm Sunday.
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hey Saleem,
After a big surprise this week from the Fed, the portfolio closed up 3.98% versus the S&P's +1.30%.
Big Winners: CLDX (+15.8% upon sale), TXTR (+8.9%), X (+7.3% upon sale), FB (+7.2%), SPLK (+5.7% upon sale), LCC (+5.7%), YHOO (+5.7%), MU (+5.6% upon sale)
Only Losers: GSVC (-3.8% upon sale), SODA (-2.4%), LRCX (-0.2% upon sale)
YTD Info:
Portfolio: +58.49%
S&P 500: +19.89%
Early this week I tried a few speculative buys in GSVC and ARUN, but sold both by week end as my comfort level faded in the names (along with a mistake in research on GSVC). By Thursday and Friday, I was in profit-taking mode after the big run and questioned the next positive catalyst. CLDX, LRCX, MU, X, and SPLK were all completely sold, and I trimmed FB some. I did add to the software plays of TXTR and RALY on positive price action and the desire to bump their overall weighting. Here's the current portfolio positions and relative sizes:
CSOD - 10.6%
FB - 10.0%
KORS - 8.1%
RALY - 7.5%
TXTR - 7.5%
LCC - 6.6%
MS - 5.7%
FCX - 5.2%
YHOO - 4.9%
SODA - 4.6%
Cash - 29.2%
Finally this week I can say a few things differently from the three prior weekly writeups, but really only marginally with respect to the "three legs":
1. Investor sentiment has improved some, although the Fed decision left many angry or confused.
2. Most growth stocks continued to perform well as evidenced by big ones like FB and TSLA, and little ones like CLDX and TXTR. This wasn't completely across the board, however, as some like Z and LNKD finally saw some declines.
3. Economic data this week was pretty much taken in stride (and mostly positive), although bigger issues like pre- and post-Fed positioning as well as the upcoming debt debate shaped investors' decision-making more.
At this point, I think the time for consolidation is upon us. When the S&P's RSI finally hit 70 again on Wednesday, the short-term overbought signal sounded and the market started the pullback the next day. This same thing happened in mid-May and mid-July/very early-August, and in both cases the market pulled back 4-6%. It is not unreasonable to think a further pullback from our current levels might happen in a similar fashion to what happened twice already this summer.
Traders and investors always look for something to blame as the market pulls back. In this case, political wrangling might be the scapegoat, but let's all be honest here...we know a last minute or barely late deal will still happen. So, in reality, this is a normal pullback phase in the strong bull market. I am not quite sure the final depth of this pullback, but I'm not going to start some kind of short position to hedge or sell everything I own--the unpredictability of political gamesmanship will almost certainly lead to lost opportunity if I try.
I am mostly comfortable with my current stocks, but realize that certain diversification efforts might hurt me more than help for the extremely short term. My current plan is to keep that one metal (FCX), that one financial (MS), that one speculative consumer discretionary (SODA), etc. I even realize that my relatively non-cyclical stocks like CSOD, FB, and RALY could get hurt on market sentiment alone, but I'm not going to play the jump in/jump out game--I never seem to win when trying that.
Overall, I like my cash position right now to allow for opportunistic purchases, and am preparing for a market digestion period in the next week or so. It certainly seems like the market is technically ready for a rest, and Washington might just give us that justification to pause. It is important not to overreact to any political events as the underlying bull market should be fully intact even with a decent pullback.
Good luck to all! :)
Stocktrader
Hi Stocktrader,
Another week & another 3 to 1 beat by you to S&P 500......very nice....
It is very nice to have a year like you are having.....sometimes thesis clicks like a charm......
Saleem
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