Indices were under selling pressure from open to close. European economic weakness took a toll & US data was ignored.
S&P 500 @ 1978.34, low 1974.37, high 1984.60
RSI @ 55.68
CMF @ 0.203
Internals were :
Down volume led by 2.04 to 1 in NYSE & 1.78 to 1 in Nasdaq
Declining stocks led by 1.98 to 1 in NYSE & 2.18 to 1 in Nasdaq
Net new 52 wk high were leading by 32 in NYSE & lows by 4 in Nasdaq
VIX UP 7.18% @ 12.69
Oil @ $102.09
Gold @ 1303.30
Canadian $ Down 72 tick @ 91.86
Stocks which were UP 1% or more included EGO
QIHU YY GG BIDU RVBD JKS CMG
FSLR JCP ABX SLW AEM DATA
TRLA Z MLNX......
Here is my weighting :
GM 34.98%
LULU 27.25%
SWIR 17.34%
RAD 12.66%
EGO 7.77%
Exposure 175%
Next post by 2 PM on Sunday.
BLOG does NOT give buy or sell.
Saleem
1 comment:
Hey Saleem,
A down-up-flat week for the markets saw the portfolio lose 0.07% versus the S&P's +0.01%.
Weekly Winners: PFPT (+11.1%), SPLK (+3.1% upon sale), MS (+2.0% upon sale)
Weekly Losers: DHI (-10.5% upon sale), NXPI (-5.4%), SGMO (-2.1% upon sale), CMI (-1.5% upon sale)
YTD Info:
Portfolio: +1.06%
S&P 500: +7.03%
Russell 2000: -1.63%
The beginning of the week started innocently enough with a big down Monday start that we recovered from and nice moves Tuesday and Wednesday. By Thursday it felt like we were stalling a bit but I really didn't act other than on earnings-specific situations. Friday was the trigger point for me to do some selling as I felt an uneasiness about the general state of the market. Here's the portfolio now in % weighting:
PFPT - 9.7%
NXPI - 9.2%
M - 7.6%
GTAT - 4.9%
RALY - 4.3%
(cash) - 64.3%
Add-on: NXPI
Closed Positions: SGMO AAL AXLL CMI DHI MS SPLK
So, my main point this week will be caution. I am always hesitant to make this kind of call, as I'm bullish at heart and generally don't call downturns well, but certain signs have started to point in the wrong direction for me.
The first sign was my gut. On Thursday, I started to indicate this on Thursday afternoon when buying interest seemed to have waned and many companies were not acting well after earnings, especially those in economically sensitive areas like transports, industrials, housing, and semiconductors. Based on this, I moved my watchfulness to higher alert.
On Friday, we started to see some cracks. Even though the weakness was attributable to the Ukranian/Israeli crises, I think there's other factors at work. When the market gets tired, it finds any reason to go down, even reasons it had previously shrugged off. I think the tired market took its cue from international hotspots and took some profits.
What this sets up now is a potentially bad chart pattern. Thursday's failure to hold the S&P's new intraday high from that day, followed by a decent selloff on Friday, can put some charts on notice as bearish followthrough. Couple that with the Russell 2000's persistent underperformance this month, and the rolling over of many of the sectors I mentioned above, could lead many more to start taking profits and finally get that correction many stopped looking for (at least as loudly).
There can be arguments made that Europe is falling back down (with or without the Ukraine crisis), China is peaking in this mini-growth spurt, and the US is seeing monetary hawks tighten policy too quickly in this nascent recovery. If all of these actually come true, we could see a longer and larger decline in the markets. I am open to this possibility depending on how earnings are actually affected. I fear this is a real chance for earnings misses as opposed to the slow but steady march up we've seen in the past 5+ years. Obviously, if the concerns pass quickly, we can resume the uptrend without much fuss. I think the chart will tell the story before the evidence, so it is important to be watchful.
This week has many economic reports such as Q2 GDP and July jobs, but also an FOMC meeting. It will be interesting to see how the market takes each data point. If the market is in "sell mode", any data point can be taken negatively.
The earnings season is well past half way now, and this lack of new catalysts could prompt more profit taking. CMI reports Monday morning, but otherwise no recent or current portfolio names report this week (unless I forgot some!).
Overall, I am playing defense now. The end of the month might help stocks somewhat, but currently weak sectors might get even weaker.
Please be careful! :)
Stocktrader
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