17-Apr-08
DJIA only down 5% year to date?
Hard to believe that given all that has happened during the first 105 days of the year, the Dow is only 5% away from where it was at the close of 2007. Of course, the S&P and NASDAQ has performed a bit worse.
I've held my own over the past month, gaining back roughly half of my underperformance. This is mainly accredited to the return of strength to the momentum names. We needn't look beyond the performance of RIMM, FSLR, AAPL, and RIG to see why many traders have had a solid month.
At the same time, unfortunately, I've missed several 'easy' trades (at least in hindsight) in POT when it broke convincingly above $165, CPST when it hit my target of $1.80, and EXPO when it tagged its 50 day MA last week.
We remain range-bound in the overall markets while many eyes remain fixated in the 1390 level in the S&P. I am comfortably positioned neutral with a slight positive bias. Again, my inability to scalp quick trades is limiting any activity I would enact here. For the very short-term focused, the hot agricultural, energy, steel, and other metals names remain attractive. Of course we'll see a washout at some point, but its not difficult to see another 10% move higher sooner than later. So long as stops are kept tight, this may be the way to steal a few percent of alpha.
I have been in favor of reducing positions in the materials sector. Much of these gains in commodity-related stocks has been a DIRECT result of the weakening dollar (which I have repeatedly stated is becoming more and more overdone). When we ultimately see the dollar stabilize and then strengthen, the performance of FCX, GLD, POT, and the like will suffer. The FX Market is a beast and not one I have the confidence in betting on or against. I simply chose to stay away from the companies driven by dollar moves when I feel the currency is dangerously oversold.
Stocks I'm taking a closer look at for potential intermediate to long-term holdings period include MU, AMZN, ALB, and RTN. I've initiated positions in OFG and AFSI while going short WFC. This has provided my first financial exposure in some time. I should note this is more of a bottom-up analysis versus a belief that financials are moving higher.
Posted at 05:20 in Market Report | Permalink | Comments () | Top
Liquidity, the Doll...
Taking a look at last week's posts, I was undoubtedly early ...
hrtrader
Bounce into Thanksg...
Friday saw a great rally with options expiration. Volume was...
beactive
CTZPRA - Rationale ...
Another Covestor member requested an updated rationale reque...
I3east
Categories
Holding Tags
Other Stock Tags
0 Comments on "DJIA only down 5% year to date..."
You must be logged in to post a comment.
Top