Saturday, June 19, 2010
Weekly Newsletter -- Mixed Signals
Stock market trend: Possible Nascent Bullish Uptrend
8:06 pm edt
This is another tough week for me. On the one hand,
two of my favorite sources for handicapping the market trend -- Market Edge and Investors Business Daily -- support the existence
of a new bullish uptrend in the market based primarily on technical indicators.
On the other hand, one of my favorite sources
for forecasting the economy -- and thereby easing fundamentals to handicap the market trend -- is flashing increasingly bearish
signals. This is the ECRI Weekly Leading Index which is in a clear decline.
When I put these two disparate pieces of information
together, one likely scenario is a very short run bullish move -- followed promptly by a bearish downtrend once the economic
data kicks in fully. To put this another way, there may be a green light now to engage in some short-term trading with the
uptrend. However, it will be risky business if the ECRI index is correct and the slowdown is coming.
In light of these mixed
signals, I have begun engaging in some very short-term trading on both the long and the short side. My trades have been described
in a series of recent videos for the street.com. I recommend viewing these videos in their entirety, but
some of the stocks I see with some short-term potential include, on the long side, Apple, Halliburton, SanDisk, Cirrus Logic,
and Pfizer. On the short side, I like Gamestop And Research in Motion.
As an update on Prolor (PBTH), my favorite biotech
analyst Andrew Vaino may well have put a fork in this stock by issuing alert that says that the stock may well be done in
terms of justifying its rich valuation. Prolor fell on the news and it will be interesting to see whether it recovers.
Saturday, June 5, 2010
Weekly Newsletter -- IBD Blows It
11:19 am edt
Reminder: I will be hosting a free webinar on June 8 at noon EST illustrating how to use my Always a Winner framework to improve money management
and corporate strategy. The webinar is sponsored by Soundview, which has identified Always a Winner as
one of the top business books of 2010.
This Week: IBD Blows It
Stock market trend: Decisively Broken. Market Pulse
I read IBD’s Big Picture column daily as a way to help assess the trend, and I was astonished
this last week when after Wednesday’s little bull party, IBD called a resumption of the upward market trend.
about this, I realized that the problem with IBD is that it basically makes a technical, formulaic call based on past patterns
of elements such as distribution days and rallies on large volume. What it does not do – which is
done is this column – is to also factor into the broader macro fundamentals.
Looking at those fundamentals, you know my story:
I see the slowdown in Europe affecting both Asia and the Americas in a way likely to dampen global recovery. I
see the Obama Administration approaching our economic woes as if more taxes and regulations were the answer rather than true
tax and trade reform. I see no end in sight for an energy policy that leaves us at the mercy of foreign
oil producers – and cowboy companies like BP.
Given this vision, I continue with my cash call – and urge the retail investment community not
to become a cash cow for the rest of Wall Street. .