Navarro’s Broad
Market Outlook: Sitting Tight

Gotta love those stiff,
upper lip Brits!  They’ve endured the Nazis and the Irish Republican Army and
bad food for so long that nothing fazes them.  Hey, if those bombs had gone
off in New York or D.C., it would have been mass hysteria — at least among the
media and politicians.

So if bombs can shake this
market what can?  Higher interest rates?  Nope.  Higher oil prices?  Nope. 
Fundamentalist extremists consolidating power in Iran?  Nope?  

While maybe a little dose
of inflationary pressures next week when the CPI and PPI come out towards the
end of the week.  That might ruffle some feathers.

At this point, I have no
real interest in trading the market trend — there just isn’t any.  Instead,
I’ll speculate on a few story stocks and get ready to short the broad market
in September and housing stocks at some point…..

 

Portfolio Musings

 

One of my last week’s picks,
IBIS, may a nice little move so I double dup.  Technicals remain good.  The
other pick, VION, looks solid and hope to do the same this week or next. 

 

Of my two stem cell stocks,
GERN and ASTM, GERN made a nice little move too.  It seems like a very solid
stock technically but will face a hurdle breaking through 9 and then the big
10.  ASTM continues to be under accumulation.  Both seem like good long term
holds.

 

My oil play MPET, which had
dropped me into the red, had a nice bump up on a news peg of an oil well in
Australia and I got the heck out unscathed.  The “Mo-Mo” players got this one
and I want no part of it.

 

Bird flu play SVA pulled back
after a nice little move but is climbing back towards 3 bucks.  My other bird
flu play CHIR has been killing me as it tanked right after I got into some
2007 leaps.  It rallied this week nicely, however, on forecasts of a huge
demand for vaccines.

 

My two losers ARDI and ZILA
are basing and a big earnings call on July 28 is coming for ARDI.  I doubled
down on ZILA — don’t usually do that but I love this stupid stock.  May soon
do the same for ARDI.

 

 

Hedging Your Bets
With Matt Davio:  Volatility Rising….

 

Earnings season should begin
solidly next week. I think this could be the first brush of increased
volatility, although I expect fairly decent earnings from most players.  This
could set us up for a run to SPX 1250-60 by the Fall.  Still, we remain stuck
in the same market range we have been in now for over 9 months. 

 

BROAD MARKET MUSINGS

Kind of strange how the SPX tested the May highs of
1170 pre-market, never looked back, and closed all the way over 1201 on
Thursday.

I still see limited upside to 1260 on the SPX which is a short 40 pts or about
3% away from Friday’s closing of 1216. 

 

I also think the low volatility can not continue forever.  The
smart trade is to buy premium — although it has not been the smart trade the
past few years. 

 

CNBC’s Mad Money and its mad host continue to act like we have
never seen better days in the markets. This is anecdotal info, but
nonetheless, it is important information for me as Cramer is often a good
contrarian indicator. 

 

SECTOR MUSINGS

 

The HGX, homebuilding index, closed at a new all time high on
Friday. Bubble or not, the trend is still higher and interest rates are
staying low, so why fight the “homies”.  I wouldn’t own em, but I sure
wouldn’t short em here.

 

RTH the retail holders continue higher in this last 2 year
rally holding firm on Friday’s closing.

 

BKX, the banking index, is holding its tight range.  It has
been locked into 95-100.

 

The TNX, the 10 year Treasury note closed @ 41.09, showing
potential of a near term breakout over 41.52 closing price. 

 

Lots of things breaking out or nearing breaking out, should
lead to an interesting 2^nd quarter earnings season.  Looking
forward to next week!!