Wanted: Conviction
After a long and
wonderfully relaxing weekend, it is time to jump back into the thick
of things. Unless there were some nasty or positive surprises from the retailing
sector over the “Christmas Kick-off” shopping weekend, I don’t expect
the market to trade all that differently than it has been recently — lethargic
with little conviction. This is certainly not what I am hoping for, but it
appears that another catalyst, positive or negative, is needed to induce a
healthy bit of fear and greed back into this market.
I won’t get too analytical with regard to today’s
action until I have a chance to get in there on the opening and see what is
happening. Based on that, I thought it would be a good idea to go over some of
the longer-term picks I have highlighted over the past month and bring you up to
speed as to my thoughts currently.Â
One thing I can say for sure is that even on
the longer time frame (days-weeks), the price action is just as choppy as the
intraday trading. I cannot recall a period when so many trades got stopped out
or just sat there and did nothing. A few months back, the same screens would
have yielded far more winners which exhibited follow-through.Â
Sure, markets
change, that is a given, and what worked yesterday, may not work today. But I
continue to feel that the most recent upside move the market has experienced
since Sept. 11 is nothing short of peculiar. I won’t bore you with all the
ideas and theories which I have heard or even thought myself, but I will just
say that this latest period is unique in market history.
Short
Capital One Financial
(
COF |
Quote |
Chart |
News |
PowerRating) stopped out
Short
Advent Software
(
ADVS |
Quote |
Chart |
News |
PowerRating)
stopped out
Short
Williams Sonoma
(
WSM |
Quote |
Chart |
News |
PowerRating)
stopped out
You will recall that my reasoning on these trades
was both technical and fundamental. I was not expecting much out of the retail
sector nor the consumer finance companies; perhaps the trades will eventually
pan out, but the market did not agree with my overall conclusions at the time.
This particular pick goes way back to the
beginning of the Argentine debt crisis. It was a long slow drift down, but
the trade paid off handsomely.
Long
Argentina Fund
(
AF |
Quote |
Chart |
News |
PowerRating)
covered
Short
Health Management Associates
(
HMA |
Quote |
Chart |
News |
PowerRating)
open
Short
Golden West Financial
(
GDW |
Quote |
Chart |
News |
PowerRating)
stopped out
Long
Boston Scientific
(
BSX |
Quote |
Chart |
News |
PowerRating) if it traded above 24
open
Long
Dun & Bradstreet
(
DNB |
Quote |
Chart |
News |
PowerRating)
open
Long
Lowe’s
(
LOW |
Quote |
Chart |
News |
PowerRating) if it trades above 40 open
Long
Hutchinson Technology
(
HTCH |
Quote |
Chart |
News |
PowerRating) open
Long
Network Associates
(
NETA |
Quote |
Chart |
News |
PowerRating)
open
All in all, not a particularly great run.
The trades that did work or are panning out are not sufficient at the present
time to offset the losses from the closed positions. This may change, but as I
indicated earlier in the column, this market is testing traders on all time
frames.
Key Technical Numbers will appear tomorrow. My
software is giving me the dreaded “Performed Illegal Operation” so I
did not have the numbers ready in time for the opening. Check in TradersWire
later as I will do my best to update you in there.
As always, feel free to send me your comments or
questions. Have a great trading day, and be selective. See you in TradersWire.
Â