TAPE was under selling pressure after open. BABA was the only game in town and is being pumped UP big time by institutional money. DOW & S&P 500 made new all time highs intraday. By the end of the day only Dow closed green. Internals were negative and showed sign of reversal again.
S&P 500 @ 2010.40, low 2006.59, high 2019.26
RSI @ 61.99
CMF @ 0.163
Internals were :
Down volume led by 1.34 to 1 in NYSE & 1.89 to 1 in Nasdaq
Declining stocks led by 1.54 to 1 in NYSE & 1.92 to 1 in Nasdaq
Net new 52 wk highs were leading by 19 in NYSE & lows by 22 in Nasdaq
VIX UP .67% @ 12.11, low was 11.52, high 12.61
Oil @ $92.41
Gold $1216.60
Canadian $ 90.31
Stocks which closed green included FB
BBRY TWTR LNKD GOOGL YUM
GRPN BABA AMZN FEYE HIMX
PANW SBUX MCD DATA CSOD
WLT TRIP...
Added 45% EGO @ $7.16
Here is my weighting :
LULU 22.47%
SWIR 21.76%
EGO 18.51%
MU 17.61%
FB 14.40%
AKS 5.25%
Exposure 200%
Next post by 2 PM Sunday.
BLOG does NOT give buy or sell.
Saleem
1 comment:
Hey Saleem,
In a week that saw a big divergence in index performance, the portfolio lost 0.71% versus the S&P's +1.25% and the $RUT's -1.18%.
Weekly Winners: NXPI (+5.3% upon sale), AKS (+3.4%), DRYS (+2.0%), GM (+2.0%)
Weekly Losers: SRPT (-8.7% upon sale), PFPT (-6.4%), SPLK (-4.8%), WLH (-3.8%), JKS (-3.2%), AAL (-2.7%), BWLD (-2.6%)
YTD Info:
Portfolio: +4.27%
S&P 500: +8.77%
Russell 2000: -1.18%
I only made a few moves this week buying NOW on Monday and selling NXPI and SRPT on Friday. The Fed meeting turned out to be much ado about nothing. Here's the current positions:
Top Holding (9.6%): GS
The Rest (7.2->5.4%): JKS CMI GM WLH AAL AKS AGU DRYS SPLK NOW PFPT BWLD
Cash: 17.5%
New Positions: NOW
Closed Positions: NXPI SRPT
Looking back, it was a tougher week than expected given the S&P 500 gains. This is mostly due to the smaller stocks seeing downside action contrary to the headline markets. The divergence this week was quite pronounced, and needs to correct back quickly else it could deteriorate more rapidly, and potentially bring the larger market with it.
The Russell 2000 definitely looks to be in trouble. After a poor Monday which brought that index under the 200 DMA, it rallied the next three days in what appeared to be a solid test. Then Friday, on a relatively flat tape, it dove more than 1%, bringing it again back under the 200 DMA and showing signs of a failed breakout. This technical feature needs to be undone quickly or the deterioration could deepen. My best guess for the Russell's weakness is investors sensing the Fed on a normalization path which many equate to less "easy money" which tends to hurt smaller stocks. Given the high sentiment-driven nature of the smaller stocks, a decline can turn nasty in a hurry. Many of my stocks could be exposed to this situation.
As far as the economy goes, it seems on a steady improvement path. Although this brings about a Fed-induced normalization of interest rates, it should be considered a good thing for the markets over the longer term as companies may finally see the revenue growth this recovery has been lacking for years. Shorter term, a shift in sentiment regarding the Fed's stance on accommodation could cause turbulence.
We are finally seeing a pullback in the bullish readings in Investors Intelligence, which had been registering ratios not seen since early 1987. To tell whether this is a trend which may precipitate more selling, or just a healthy pullback to refresh is yet to be seen. Technical indicators like a MACD divergence with this week's S&P high and a large bearish reversal on Friday could signal further weakness, but continued low commodity prices and steady growth may help margins increase further beyond what people expected. The push and pull continues.
Overall, there are a number of reason to be cautious in the market right now. Am I cautious enough at 17.5% cash yet having many high beta stocks? I'm not sure. I will be continuing to evaluate stocks as we progress into year end, and I wonder if I'll really be able to sell such a great growing franchise like a BWLD after this big pullback. With many of the larger catalysts behind us (especially post-AAPL's weekend numbers also), will investors get back to focusing on individual stories?
Anticipating a tricky week...
Stocktrader
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