TAPE has been behaving in an erratic mode for a while, these days its 2 days down and 1 day UP.
IF you are not in high flying semiconductor stocks, you are not feeling good about this market.
There is more troubling aspect of this TAPE....
Dow is below 50 DMA
S&P 500 is barely above 50 DMA by 7 points
Nasdaq is comfortably above 50 DMA by almost 75 points
Nasdaq has the weakest CMF, positive by 4 tick only
IF S&P 500 go below 50 DMA, we may be in real trouble this time around.
Dow has made lower low already......
Jobs report on Friday may put further pressure on the downside, expectations are 208k jobs creation, IF we go above, it may not be a news easily digested by the market, interest rate fear will go into high gear.
Semis are in "froth land"
IF Semis tank, there is no support in this market.......
To say the least, things are not looking healthy.....
NO..its not the time to sell everything, but be cautious about your expectations.
We have a history of fast downward move of two days then recovery.......
Monitor your portfolio closely for weakness and take appropriate action.
Good luck with your own analysis and comfort level.
BLOG does NOT give buy or sell.
Saleem
5 comments:
Hi Saleem,
I was out of town starting Thursday night, so didn't get to post I repurchased SPLK @ 68.60 at open on Friday. I was able to read the conference call transcript after we arrived at our destination Thursday night, and definitely wanted back in. I was pleased to get a ~$2 discount to my sell Thursday even though the street seemed less impressed for the time being. I think it was mostly just a "sell the news" situation as the quarter, guidance, underlying momentum, and call commentary seemed just fine. I tried to add a little to RUBI at close but couldn't get the mobile app to respond correctly--oh well.
Despite the volatility intraweek, the portfolio didn't do too poorly at a -0.48% return vs similar in the averages (the prior week also near market averages). The winners were NXPI (+3.0% when sold), GPRO (+1.9%), and SPLK (+1.0% due to a money-saving sell/buyback). The losers were CSOD (-3.3%) and then four others down 1-2% (C FB GOOGL IACI).
The portfolio is currently: GOOGL SPLK C FB CSOD IACI WLH AAL GPRO RUBI (AEMD).
Cash: 18.0%
YTD Return: +9.33%
Although I missed Friday's action (loaded with economic data I saw), I couldn't miss seeing the continued action in URI, a prior portfolio holding. In two days it dropped from $104 to $89 due to a softer May than expected. Given it touches so many parts of the economy, it is a bit troubling overall sign, although the economic data of late has also pointed to a questionable rebound from the Q1 troubles.
If we really are losing industrials, along with peaking semis, sputtering cloud/social, rethink on financials, and oversupplied materials, I'm not sure where to go. The $SPX is looking worryingly like a "failed breakout" scenario, and we may be caught in that scenario where good news is bad news (due to Fed rate hike potential) and bad news is still bad news for many industries.
It is surprising to note that the small caps are actually outperforming the large caps now on the year. I attribute this partially to the recent sluggish data that is pushing the Fed further back this year, but also to the fact that pure growth is difficult to find in this market, and those stocks on growth paths are certainly attracting big money. We are also seeing a boom of M&A activity which is driving whole sectors, and the massive amount of cash on corporate balances sheets could keep this force in motion for a while.
It is with all this in mind that I carefully position my portfolio. Most of my cyclicality has been sold over the past month, and I have rotated into more specialized stories and/or potential catalysts. I have so far avoided the largest blowups and only been hit by a few downfalls like AAL. I am currently comfortable with a bit more cash than usual, especially given my portfolio stocks have higher beta. I am watching carefully to see if some of the negative signals start to gain momentum, or if this is just another "fakeout" to rejuvenate the upside.
Good luck to all! :)
Stocktrader
Hi Stocktrader,
Market is not easy for anyone, it is acting like a yo yo.
Good luck with SPLK....
Saleem
Hi Saleem,
Bought YHOO @ 43.05.
The sum of the parts valuation is compelling, and I think it makes more and more sense for BABA to buy YHOO and get a "discounted buyback" of its own shares even as it gains momentum in its businesses.
Stocktrader
Hi Saleem,
Forgot to mention, bought only a half position in YHOO.
Just now bought half position in BABA @ 89.78 to round out a "full" position in the combined story.
Stocktrader
Hi Stocktrader,
Good luck with BABA / YHOO strategy.
Saleem
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