After Market Close September 18, 2007 |
So Much For Fed Watch
It's a good thing that I don't have to predict the Fed's actions very often. I was pretty well convinced that we'd only see a 1/4 point cut, but the Fed, in a decisive fashion, cut a full 1/2 point. That was probably the right move and from what I see from my sources, it freed up some "stuck" capital. There were some banks sitting on things that needed to go (and they were trying to sell at deeply discounted rates, to no avail) and I suspect that the powers that be didn't want that. From here, we have to be generally Bullish. After a few deals getting done, the lower rates aren't going to stimulate buying of much of anything besides stocks. That's good for us.
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DJIA: Look at that spike in the Dow! |  |
SPX: The S&P is not far from generating weekly MACD cross. When it comes, we'll likely get a pullback. |  |
NDX: The Nasdaq also participated. |  |
RUT: The Russell saw a pretty serious squeeze yesterday. Far too many short there. We'll look to this sector to short after that demand is spent. |  |
HUI: Gold hit 25 year highs yesterday. That oughta help miners. |  |
DJT: The Trannies broke up, but are hung on resistance. |  |
XBD: The Brokers exploded higher. Too many folks thought that they had the key to the lock. |  |
CSCO: Cisco rallied but lagged a bit, too. Should play catch up today. |  |
SYMC: Symantec lagged too, but a rally is a rally. |  |
AUXL: Auxilium did just fine for us. |  |
XEL: Xcel exploded higher for us. |  |
IRC: Inland Real Estate, surprise, surprise, did quite well for us. |  |
WR: Westar romped higher. We're long. |  |
PNRA: Panera suddenly looks sick. Just in case we get a pullback, this might make a nice short. Maybe even if we don't get a pullback. |  |
AMLN: Amylin continues to hold some promise, though it lagged yesterday. |  |
CNB: Colonial romped. Those who took the buy at the open have to be happy. We missed it thanks to the 30' rule. They gave us a second chance, too. |  |
ACS: Affiliated Computer was weak, and if it falls here, there could be trouble under the surface. I'll short that, even in this market. |  |
JCOM: J2 was strong and looks stronger. |  |
Summary:
As Bullish as yesterday was, I think we're still in a correction and that some work needs to be done. This week still has a higher bias, but I suspect that there is some bad news lurking. Perhaps next week will bring it out, or maybe sooner. In any case, should we get that, a few shorts might make sense if they're particularly weak looking. If not, well, we have plenty of longs and are looking for more. The Nasdaq should play a little catch up. If it doesn't, that may be a hint that there's trouble ahead.
Be Well, and Trade Smarter Than the Average Bear!
-The ChartSmarts Team
Current Positions:
Long 50% CSCO at 29.49, stop at 31.03
Long 50% SYMC at 18.31, stop at 19.03
Long 50% AUXL at 20.37, stop at 20.37
Long 50% XEL at 20.94, stop at 20.94
Long 50% IRC at 15.43, stop at 14.81
Long 50% WR at 24.67, stop at 23.86
Watch List:
PNRA: Short 50% on a print of 42.97, stop at 44.69
AMLN: Buy 50% on a print of 49.44, stop at 47.47
ACS: Short 50% on a print of 48.47, stop at 50.49
JCOM: Buy 50% on a print of 35.21, stop at 33.46
Changes in Current Positions:
Move the stop up on SYMC to 19.03
Move the stop up on XEL tp 20.94 breakeven
We are now 50% long IRC at 15.43
We are now 50% long WR at 24.67
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As a general rule for the model portfolio, we will lift all stops on existing positions for the first 30 minutes of trading. As a practical matter, subscribers may wish to leave their stops in place if they expect to be incommunicado or unavailable during that time to monitor positions.
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