Sunday, October 7, 2012

Where is that dip?

Where is the dip, behind us or still ahead?

I keep expecting a dip, or a drop before the election, maybe it is wrong to think so. Was it that little thing on September 26? Is it already off to the races? I have to remind myself that I do not know the future and should best leave that to others. We will know in a few weeks.. With the unemployment rate down to 7.8% perhaps the economy is already starting its new run.

I took a moment and reviewed the XTN which is a transportation ETF, one that is more trucking related and broader than the more well-known IYT. Comparing this to the S & P 500 we see it has been dribbling since March, but averaging just a steady lateral move. In that same time period the     S & P 500 has had a dip and then a nice steady climb. Which is leading, which is lagging?


Perhaps the transportation stocks have been waiting, just waiting and posed for takeoff. First ignoring the dip they should have taken and now ignoring the market rise until the election is over or at least until the outcome is clear. It was clear who was likely to win, but now it is less so.

Last week I noted that the S&P 500 did not drop to 1396. This had been cited by a Technician as one of the Fibonacci numbers that if breached, signaled a greater drop going forward. Perhaps it has held and rally has started. 

I think it will all be cleared in the next week or two and we will know the trend.

What did I see in my weekend review?

 The 10-yr Treasury yield is now up to 1.73…perhaps wrong to pay too much attention to this number weekly.

IBD (Investor Business Daily) continues:  Confirmed Up Trend 

Copernicus Systems: Is now long, but still mixed. It is clearer that the global ETF’s stocks are in control over the US ETFs. 

Not all Global ETFs are climbing, but FXI (China) and EPI (India) are gaining ground in the rankings, so are EWH, EWW, EWT and EWY. Falling are Australia and Canada along with Japan.

Moneys Flows still has money flows all down, but two out of three prices are rising.

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

(All gains or losses shown are the total since purchase)
FRAN -7.84% still bad but recovering (I plan on selling this retail stock on or before Dec 1)
ALGN  1.73% a nice gain for the week
RAX sold for a modest profit this week
ALXN +4.40%  a nice gain this week, thank you very much
AAPL -.36% was added on a dip, may add more if it drops further. 

ETF’s for a trade are:

GLD +4.74% this is actually not a trade but a long term holding
EWG +.24% a nice gain, now positive
IWM -.98%, gaining for the week, but not yet positive
SLV +1.27% dropping this week 

What will I do?

Last week my watch list was simply : CTRX, and GOOG. This week, these still look good but I will add to the watch list :  TDG, RND, GIB, EBAY, HD, JCOM, all great stocks right now. However still no buying “planned”. I would rather be a seller right now.

I did add Apple last week since it was on sale and may add more if it drops lower. Its earnings are great, the PE is only 15.34 and it is now paying a cool dividend of 1.6%. I should point out this is still a trade for now, not a long term position, hope to retake that long term position later

I hope you have a great week.

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