Let the Big Dogs Run

I thought that I was going to have to start taking profits in my focus stock portfolio , but much to the chagrin of the IRS, I didn’t take any gains today. Sorry, boys. Read my lips: no taxes for you.

Sometimes the team of stocks you own can surprise you by going 16 for 19 with 5 homers and 16 RBIs in the game, with a few “web gems” tossed in just to frustrate the opposing team.

The portfolio of 19 stocks was up 2.38% today, led by the likes of [[CLF]], [[FDG]], [[MEE]], [[EAC]], [[CLR]], [[WLT]] and [[WFT]]. Even [[POT]] was up again.

At this point, it’s best to simply “let the big dogs run”. Let’m crap on my cat-loving neighbor’s lawn, then reward them with strips of bacon, I say.

My focus on the long side continues to be “grounded” in the areas of oil, coal, and fertilizer. Arab oil sheiks can polish my furniture and wash my dirty clothes, for all I care. (God only knows why I threw that one in there).

Finally, I’m maintaining my bias to the downside, with righteous prejudice.

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I’ll have you know that 14 out of 15 market indicators that I watch are negative. The last hold out is the percent of NYSE stocks that are still in a positive trend. As of last Thursday, that number was 43%, but down from 45% the prior week. It was 50% on 06/09/08.

On Friday, another indicator rolled over: the percentage of stocks on the NYSE that are trading above their 30-week MA. This is a major red flag because it is looking at a longer term trend. The number fell to 42%, from 46% last week, and 50% two weeks ago. It is signaling an extended breakdown in the market.

Consumer Staples [[XLP]] $27.08: Bearish. Momentum has been negative for eighteen days after weakening all last week. Also has lost momentum on a three week time frame and now a five month time frame. Relative strength weaker than the market. This one is rolling over.

 

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Recent market action and alomst every single indicator I follow has confirmed what I had concluded on 6/11/08 and 06/12/08. 

So what now, you ask?

First of all, forget about buying breakouts, unless you’re daytrading or short term trading. In this environment, breakouts fail. Face reality. Accept it. The bears are back in control.

Secondly, the focus should be on capital preservation right now. If you still haven’t done so, it’s not too late to:

1. Raise cash levels by selling lagging positions now, and your leading stocks once they start to breakdown. Forget about hanging on and hoping they’ll recover. Remember where MSFT was in 2000?

2. Reduce exposure to even the leading sectors like ag, energy services and steel. I’m not saying blow out those positions completely right now. Just lighten up. Take some off the table and go to cash.

3. Tighten up stops

4. Buy puts or use inverse ETFs to hedge your positions and portfolio.

5. Look at alternatives that are not correlated to the stock and bond markets. Think commodities. I like [[DBA]], [[USO]], [[GSG]], [[JJA]], and [[RJI]].

6. As an alternative to cash / money market, look at allocating your “cash” to currency shares. [[FXA]] and [[FXE]] look stronger than the dollar. Also, the yield on FXA is about 6.7% and 3.7% on FXE.

Some of these ideas are rather obvious, but when the market gets dark, people can get all emotional and stressed out about their money, get analysis paralysis, and just end up sitting on their hands. This is especially true if they have no idea of what their philosophy is and no game plan.

Or, they take stupid actions like buying with both hands, thinking that “the market is oversold”, based on a feeling or what the people on CNBC say. Don’t be among them.

Disclaimer: This information is not intended to be used as the primary basis of investment decisions. Because of individual investors requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. Consult your financial advisor prior to taking any actions. The information and opinions contained here are those of the author and are not necessarily the same as those of iBankCoin, its principals or its affiliates. Trade at your own risk.

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No trades were done within the focus stock portfolio this past week.

It doesn’t come as a surprise that the portfolio took a 1.25% hit to the crotch today. The biggest losers were [[CLF]], [[TTEK]], and [[BIG]]. However, I remain steadfast with these, though bearish on the general market.

Despite being bearish on the general market, there still is opportunity in selected sectors and stocks related to energy and materials. Stick with the basic theme. Generally, if it’s black and found in the ground, it’s probably a good bet. It’s just that simple. Don’t make things complicated.

All in all, this group of stocks gained  3.43 % for the week.

So far, since inception:

Focus Stocks:    +11.65%

S&P 500:     – 6.18%

Dow:     – 8.15%

Naz:     – 3.33%

Top three winners (unrealized):

MEE     +52.57% 

CLR    +32.32%

EAC    +31.19%

Top three losers:

MTL   -6.50% (realized)

SID     -5.91% (realized)

MA     -2.65% (unrealized)

Sector allocations: Energy 39%; Materials 32%; Industrials 15%; Info Tech 8%; Consumer Discretionary 6%.

Holdings: (most recent prices) and original purchase prices:

[[AGU]]@86.26

[[AKS]]@68.99

[[BIG]]@ 29.05

[[CLF]]@89.40

[[CLR]]@51.90

[[CNX]]@91.41

[[EAC]]@55.52

[[FDG]]@69.30

[[FLS]]@121.10

[[GLW]]@25.74

[[MA]]@291.75

[[MEE]]@58.50

[[MOS]]@126.98

[[PBR]]@65.55

[[POT]]@199.26

[[SE]]@ 26.64

[[TTEK]]@ 24.92

[[WFT]]@41.99

[[WLT]]@83.87

Have a great weekend and drink responsibly.

Disclaimer: This information is not intended to be used as the primary basis of investment decisions. Because of individual investors requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. Consult your financial advisor prior to taking any actions. The information and opinions contained here are those of the author and are not necessarily the same as those of iBankCoin, its principals or its affiliates. Trade at your own risk.

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Despite most tech names getting poleaxed today, I bought CSCO earlier this morning on my fishing expedition, because I can.

Now it’s time to wade in a little further, and I like [[WDC]] here.

What’s not to like? I live out west and it has “Western” in it’s name. Not only that, but we also live in a “digital” world, so…there you go.

Call me crazy, but I think this one can make a comeback.

Disclaimer: This information is not intended to be used as the primary basis of investment decisions.  Because of individual investors requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. Consult your financial advisor prior to taking any actions. The information and opinions contained here are those of the author and are not necessarily the same as those of iBankCoin, its principals or its affiliates. The author may have a position in one or more stocks mentioned here. Trade at your own risk.

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Constanza trade, ok?

Hey, it’s a Friday. Time to go fishing with the [[CSCO]] kid.

Disclaimer: This information is not intended to be used as the primary basis of investment decisions.  Because of individual investors requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. Consult your financial advisor prior to taking any actions. The information and opinions contained here are those of the author and are not necessarily the same as those of iBankCoin, its principals or its affiliates. The author may have a position in one or more stocks mentioned here. Trade at your own risk.

 

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