Indices were under mild selling as most traders are waiting for Crimea vote which is a foregone conclusion.
I am sure many were surprised @ TAPE resiliency today, this was the weekend before Crimea. When stocks do not go down as much as common wisdom has concluded then pay attention. I firmly believe that yesterday was "panic selling" which discounted all the sanctions which is going to be placed by Western powers.
S&P 500 @ 1841.13, low 1839.57, high 1852.44...50 DMA @ 1828.84 which may hold on a closing basis.
RSI @ 48.18
CMF @ 0.038..still positive
Internals were :
Down volume led by 1.14 to 1 in NYSE & 1.05 to 1 in Nasdaq
Advancing stocks led by 1.36 to 1 in NYSE & 1.16 to 1 in Nasdaq......extremely positive internals..
Net new 52 wk highs were leading by 13 in NYSE & 41 in Nasdaq...another positive @ the end of this week...
VIX UP 9.86% @ 17.82...high was 18.22 as expected..did not close @ high...another positive.....
Oil @ $98.89
Gold @ $1379.00....another YTD high
Canadian $ Down 30 tick @ 89.13
In my portfolio :
Sold EGO @ $7.30
Bought LULU @ $47.11
Here is my weighting :
MU 32.85%
KOG 28.79%
LULU 24.43%
TSL 13.93%
Exposure 145%
Stocks which closed green included KOG
BBRY EXPE YHOO COH AMZN
M LUV KORS SSRI DNKN
FSLR YNDX CRUS AMCC
CIEN JDSU FNSR HMY
AG SWIR GRPN PANW
GMCR MCD ABX GG
SLW WUBA CSOD
TRLA Z AGU
MLNX
Next post by 2 PM on Sunday.
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hey Saleem,
A crushing blow to the portfolio this week saw a drop of 4.69% versus the S&P's -1.97%.
Major weekly winners: only DATA and SPLK positive from purchase (<1%)
Major weekly losers: JKS (-13.9% upon sale), DRYS (-9.9% upon sale), AAL (-6.9%), AXLL (-6.6%), many others -2-4%
YTD Info:
Portfolio: +0.08%
S&P 500: -0.39%
Initially my moves this week were to reduce some cyclical exposure back to some high growth after they came well off highs. Late in the week, I was looking to pare back exposure generally, especially in cyclicals. Here's the portfolio now:
Major Position (19.0%): AAL
Other Positions (8.1-4.6%): AXLL MOS AGU CSOD NOW PFPT DATA YELP
Cash: 34.1%
Closed Positions: SB BALT DRYS BAC FDX JKS
New Positions: CSOD PFPT DATA NOW YELP
Buy/Sell Intraweek: SPLK
The great writeup I had last week about grinding higher and why I liked the US economy and specifically why I liked my certain stocks all went out the window this week. Poor Chinese data had investors really focusing on a serious potential slowdown there while Ukraine added enough uncertainty stop much dip buying.
The "light bulb" day for me was Thursday. The market started off nicely higher and it seemed like our reversal higher from Wednesday was confirmed for an upside move. Then the market just started falling and never stopped to end with the worst day in a while and with most investors scratching their heads as to why in both direction and timing. To me the biggest red flag that day was the precipitous drop in the USD/JPY that started right away in the morning (and continued on Friday). I think there's some kind of leverage/carry trade unwind that is happening now. If correct, I fear larger downside and it will also leave investors somewhat confused. The worst kind of drop is one where people can't quite figure out why, because it often leads to greater selling later as the final reason becomes revealed and investors have held on for too long.
I'm not sure this scenario plays out, and it bothers me I can't quite figure out why it started happening (can only read some signs to see it happening), but I think it is wise to reduce exposure until the market becomes clearer. Too many times in the past I've held on because there is "no reason" for a big drop, only to see myself feel like a fool for either holding so long and/or selling out closer to the actual bottom. This time, I'm raising some cash and might even put on a hedge for protection in some positions I do like. The TZA is a favorite choice of mine for hedging given the "long-only" requirement of this retirement portfolio.
Besides China, Japan, and Ukraine, one thing we might start seeing is earnings warnings for the first quarter coming out. Although this is supposedly well known, it may affect the market if we already have shaky footing. In the end though, I would consider this a positive reset to expectations going forward.
Ultimately, I'm not sure what happens next, but I see certain warnings signs that I didn't see in other pullbacks that has me more nervous. Additionally, there's a lot of people saying to "stay the course" since Ukraine is the problem and will only weigh on the market temporarily. I also believe the Ukraine effect is temporary, but I can't wait to see how the market subsequently reacts to any relief rally. If the market can't sustain an upside move and starts to fade again, I think the downside could be pronounced. I hope to have plenty of cash for both protection and opportunity.
Stocktrader
Hi Stocktrader,
I think it is all about comfort level for you...which is a good strategy when one is seeing negative forces playing out....
This TAPE is a swing trader dream...buy when its low & trade out with profit.......
Saleem
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