I further cut it to a 0.4% stake as it further weakened.... unfortunately the chart now looks like a short (again) as it has been for many weeks. Until proven otherwise a bounce to upper $25s should be shorted and then you can stop loss maybe $26.50 - bah. This could be headed back to that $20-$21 range.
7) A few names from last week's prospect list (
Potential Portfolio Candidates) are still out there - and in fact at levels I *could* buy but have not yet pulled the trigger -
O'Reilly (ORLY) is like
AutoZone (AZO) - a play on people keeping their cars longer; and then we have two home title firms who make money the more houses change hands - both plays on the (ahem) coming housing boom. Best case scenario I would like to get FNF on a pullback to $14.
8) Commodities/Infrastructure: Late Tuesday when all commodity stocks went ballistic I had a nice trade to take off
half our Jacobs Engineering (JEC) right near its high at $54, and then got some back in the $51s near the end of the week. Not as much as we sold, but we are just churning around. My worry here are the prospects for a double top forming near mid $54s/$55. Plus it's an Obama-stock.
Many of these commodity stocks actually have quite solid charts now as they pull back - remember Obama will ignite global growth (source: pundits) as will China (source: Jim Cramer). I think its a farce but thats what HAL9000 is buying. We sold Mosaic (MOS) and I wanted to roll it into
Potash (POT) but I missed that pullback Thursday morning...instead I threw some cash back into
James River Coal (JRCC) Friday as we hit a "make or break" level.
9) As you can see global growth is BACK! by the recovery of the
Baltic Dry Index... by recovery I mean a shipping rate that has dropped 90% is back up 0.000002% - hence the daytraders scream RECOVERY!
Almost every day the past two weeks you wake up and see DryShips trading up 10% premarket - daytraders special.
10) Oh yes, if the global growth thesis was anywhere near true we'd really need China to help...
FXI seems to be rolling over again. Remember, one of my calls for 2009 is China will be FAR worse than the punditry believe as they have some of their own bubbles to work through, along with a heavy reliance on US and European consumers... which are not coming back "in 6 months". But you can't talk to daytraders who insist on their DryShips. Now FXI is a basket of stocks, but if it breaks below $25.50ish we have another useless thesis blown to bits. This chart looks like a short to me with a stop loss over $29 (I'm playing this through FXP which is the double inverse) It simply does not make sense for commodity stocks to rally without the engines of either the US or China...
