Indices closed near high of the day & made new all time highs in Dow & S&P 500. This despite mixed economic data worldwide.
S&P 500 @ 1923.57, high 1924.03, low 1916.64
RSI @ 65.73
CMF @ 0.295
Internals were :
UP volume led by 1.13 to 1 in NYSE & .77 to 1 in Nasdaq
Advancing stocks led by 1.01 to 1 in NYSE & .64 to 1 in Nasdaq
Net new 52 wk highs were leading by 144 in NYSE & 37 in Nasdaq
VIX Down 1.47% @ 11.40
Oil @ $102.71
Gold @ $1246.00
Canadian $ @ 91.33
Stocks which closed green included LULU MU
M LEN GG ABX SLW AEM COH KORS
DNKN CMG SU EBAY YUM LRCX
V SNDK BRCM C NFLX PANW
GMCR SBUX MCD SU MGA
AGU....
Here is my weighting @ close :
LULU 31.53%
WUBA 22.31%
SWIR 17.06%
MU 14.43%
GRPN 8.31%
OWW 6.36%
Exposure 183%
Next post by 2 pm on Sunday.
BLOG does NOT give buy or sell.
Saleem
2 comments:
Hey Saleem,
A nice week for the markets was also a nice one for the portfolio which gained 1.59% versus the S&P's +1.21%.
Weekly Winners (all upon sale): PANW (+8.9%, Thu), SPLK (+7.7%, Tue), DATA (+5.4%, Tue), FB (+3.4%, Wed), YELP (+2.4%, Wed)
Weekly Losers: CTRL (-3.8% from avg purchase), SPLK (-3.0% from avg new purchase Fri)
YTD Info:
Portfolio: -3.50%
S&P 500: +4.07%
Russell 2000: -2.50%
I used early/mid-week strength to sell eventually all my stocks, and although this worked very well in some key names which dropped precipitously thereafter (SPLK/DATA), other names grinded up still and I was forced to buy back some higher. Here's how the portfolio looks now:
Stocks (in % of portfolio):
AXLL SPLK MS (~9% ea)
WLH DHI YELP (~7% ea)
CTRL (~5%)
Cash: 48.1%
The market acted as expected, grinding higher as negative catalysts lacked and short term traders were underweight. The action next week should be much more exciting. Although the week will likely start out slow and steady, with beginning-month flows supporting stocks and no substantial news expected, the ECB decision on Thursday and the jobs report on Friday will be highly anticipated.
The ECB is expected to lower rates and possibly institute some kind of quantitative easing in order to combat small deflationary signals coming from the European economy. At the face, it doesn't seem like a dire need to do much exists, so I expect a single action rather than multiple steps, which could disappoint markets.
The jobs report is probably in the non-event category despite it being one of the major monthly reports. A trending higher month of economic data probably puts the jobs numbers around consensus of 215-220K, which would maintain the trend of slow improvement. I think the risk is for slightly lower numbers given the huge number last month and some pockets of weakness in housing and retail numbers. I don't expect a slightly weaker number to be ultimately problematic however.
With earnings behind us, there isn't much impetus for individual stocks to change trend. This means stronger stocks will likely stay strong, while weaker stocks will struggle. It is important to recognize these trends and benefit from them instead of fighting them. The only way to really see a change in tone is through specific new data or takeover activity. I will be constantly evaluating my stocks to make sure they are benefiting from positive flows.
An item to watch is the Japanese yen. With inflation seemingly picking up in Japan, the Bank of Japan does not currently see the need for further stimulative actions. A lot has been made of this one-directional trade for 18 months now, and many believe a carry trade exists here. If the USD/JPY drops below 100, it will really get attention. I'm not sure this will actually happen, but it's one of the few potential negative catalysts I see for now.
I've come to the conclusion that long-term yields are low and/or dropping due to a world economy that is growing slowly enough that prices are, and will continue to be, extremely well-contained. In this environment, the US could see the best of the growth, aided by these low rates. I've come not to fear this condition, but embrace what benefits we may receive. To that end, I like my housing and housing materials stocks and look for a rebound in coming months as the recently lowered mortgage rates invigorate that market from winter doldrums.
In summary, I think a nice start to the week could pause ahead of major events late in the week, but expect to finish strong on Friday. We need not to fear the market, but instead play its game well. I find myself still learning daily...
Best wishes to all! :)
Stocktrader
Hi Stocktrader,
Summer is all set to continue the trend in place...
Good luck with your Strategy for June of 2014...
Saleem
Post a Comment