Friday, April 20, 2007

Market Thoughts

Alright, so when the market does things that go against one's predictions, it can be a bit frustrating. No doubt some of this will come out in my comments as the market continues to DEFY ME! But that's okay. I don't want to sound overly pessimistic, but patience has been my best ally. While I do appear to have been wrong about the market, it doesn't mean "game over."  It just means that I will adapt yet continue to do what has worked for me.  What has worked for me just didn't work "this time."  But I think going forward, it will.  By adapting, what I have done is focus more on the short-term trading aspect in my portfolio.  This has led to some nice trades, even while my longer-term portfolio languishes the market due to having a QID hedge and some cash.   

And before I move on to the market thoughts, what do you think about Sanjaya Malakar being booted off of American Idol this week?  While the judges (especially Simon) seem to have been pulling for Sanjaya to be voted off, I think this leaves a bit entertainment hole in the show.  There are some good singers left, but it's all a bit boring. He might not have been able to sing, but he was just goofy enough to keep us all watching.  Will Sanjaya parlay his journey into a career?

  • Long term:  The market internals seem a little weak for me to buy into this.  Seems like we're all focused on the DOW making a new record.  The Nasdaq 100 doesn't seem to have been doing much for 6 months now, except for bouncing around in a channel.  But the market has climbed the wall of worry of inflation vs no inflation, falling dollar, rallying gold, slowing GDP, Iran, Iraq, Bush sucks, subprime lender blow-ups, falling real estate, budget deficits, and the Sacramento Kings missing the playoffs.  But that's what bull markets do.  No one can deny that the bull market that started in September of 2002 (or March 2003) is still alive and well, despite those calling for recession or armageddon.  Since we are at the highs in the market, I have no intention of chasing strength and will continue with low beta holdings, cash, and a QID hedge for the longer term portfolio.
  • Short term:  Big gains for me here recently, as there has been some mo-mo and merger stuff happening in some of my names.  I have sold off quite a few the past week because even though there are some stocks basing, they are so extended.  I remember from my IBD readings that things get a little risky on that 3rd or 4th basing action in a rally, so I'm still looking but feel that these little buggers will be just as dramatic when (if?) the sellers do show up.

  • CNBC stock contest:  I've been in cash all week, and while I did suffer early on it served me well yesterday.  By doing nothing this week I am now in the top 20% at rank 208,070.  But the contest ends in early May, so I'm just throwing caution into the wind right now.  So I'm going to say "no deal" to the banker and select Mylinda Tov to open the suitcase!  I went through my stock charts last night and CNBC won't allow me to use the stock names I wanted, so I'm just going with RAD and BRCD up to the max I can buy.  We'll see how that works out.  Might be the suitcase with $.01.  What the heck. Oh, and Mylinda has been voted as the hottest Deal or No Deal suitcase model. Lauren is riding right on her butt, though.

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