Sunday, May 27, 2012


Last week I pointed out we have seen the DJIA drop almost 1000 points, it was actually 910
This week we closed at 12,455. So after a couple of cycles during the week we are now down 824 points for the month.

Well that is actually up for the week. What is so ominous? 

Everything in my weekend review was ominous, both IBD and Copernicus Systems.

I also saw a rotation of what I consider to be less-than-stellar Global ETF’s jump to the top rankings. These are ETF’s with holdings in Australia, Taiwan, Canada and Japan. 

I just don’t see justification for this. My thought is that with so many ETF’s diving in the rotation, these I consider to currently be less-than-stellar have been “pushed” to the top by this action. 

Something simply has to be on top, just as something has to be on the bottom.

At the bottom of the rankings are EPI (India) and EWZ (Brazil) and dropping in concert is FXI (China). 

So what did I see in my weekend review?

The 10-yr Treasury yield is now at 1.745%.

IBD (Investor Business Daily) continues to have: Market in Correction 

Copernicus Systems: Is still calling for a short in the market, now with much more unanimity. Moneys flows are still down 3/3…but I have to note an upward divergence in price

IBD 50 Top Five: 

LQDT, ALXN, GNC, SXCI, TSCO   I make note of TSCO’s entry, but now is not a time to buy
Last Week:
Week Prior:

 Currently my "Stocks for a Trade" now consists of:

None at this time

 IBD 50 Basket Holdings Are:

None at this time

 ETF’s for a trade are:

(All gains or losses shown are the total since purchase)

GLD (3) buys for -7.36%
SH -1.49%

What will I do?

I may add more SH which is an inverse ETF of the S&P500. I never seem to do well with shorts, but this is being bought to neutralize some illiquid mutual funds.

I also bought a little SDS  last week as a part of my dividend payer portfolio. I may also add to this.

The plan for the dividend portfolio is to buy good dividend payers which are profitable companies that grow their dividends and grow their stock price. In down times I do not sell them I just hold them and get paid the dividend while waiting. These stocks do get sold when they fail to make a profit, fail to grow their dividend or do anything else that makes them less than stellar. But a drop in general stock price does not disqualify them. However a little cash does accumulate here, so in times like this I use it to buy a little protection or insurance.

I also try to buy good dividend payers in down times, but I wait until I see the market rising out a valley and currently it looks like descent may be ahead

I hope you have a great week.

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