The market kicked into high gear this morning shortly after breaking down out of the consolidation we closely observed Sunday evening.
The idea was simple, and with it, I saved myself from the nauseating task of watching news which is centrally focused on politics. Instead I could watch price and determine how to manage my portfolio accordingly.
When everything started breaking down early on I sold off all my shares in WLT, FB, AMBA, and BALT. They were hard decisions to make because I didn’t want to sell any of them, but I knew there were major implications to that consolidation snap. Also The Fly has been preparing us for a correction rather extensively. After all of the selling my portfolio was bulked up with over 40% cash.
We are closing on the lows of the day after a high volume, large range selling candle. Something tells me there will be better opportunities to buy soon and I want plenty of cash on hand.
The seller I was observing Sunday evening seemed big by how the orders were carried about—absorbing buy flow at the offer for a full day. They just won big time and today’s tape is likely to embolden them. Do not discount the bears at this junction.
At the same time keep your eyes on stocks that are trading in a microcosm. Notice how financials aren’t as beaten down as tech. That’s because they were dogs all last quarter. We are nearing the time to consider another Goldman Sachs long.
Bottom line: stay cool and get out your shopping lists, but move slowly.
Top picks: CREE and RVLT, my two largest positions