October 14, 2007
Hi, Friends,
We are in the midst of a powerful uptrend across all markets and most sectors, but as always, caution is necessary.
Since initiating our positions on September 4th, we're up 19% in unrealized gains in six weeks, and new positions placed on October 1st are up 5.6%.
Almost every sector is showing gains and the broader markets are all in up trends as the Dow and S&P500 both broke into record territory this week.
However, I'm never too excited about new records as they can be followed by sharp sell offs like the 10% drawdown this summer that came right after passing Dow 14,000 for the first time.
But for now, all of our positions remain in strong short and medium term up trends and we will be following them upwards with trailing stops to lock in these gains because it's always critical to not get complacent when the market is going our way.
Watch your inboxes this week for a new Special Report I've just written.
I've written 5 new Special Reports which are now included as Free Gifts with your guaranteed subscription.
Tthey're packed with good information and insight and you can learn more about them at
http://www.wall-street-sector-selector.com/
The View from 35,000 Feet
This week's move upward was driven by stronger than forecast retail sales and no nasty surprises in the beginning of earnings season. The tech. market went through a nasty gyration downwards on Thursday only to rally again on Friday, and oil hit a record close on Friday of $83.69/bbl. Also, there was an unexpected rise of 1.1% in the PPI, driven mostly by food and energy.
The Week Ahead
Several important reports are coming out this week which will be market movers along with earnings reports that will be coming all week:
Tuesday:
Wells Fargo reports earnings, the first of the big banks and a look at how the financials are faring after the credit crisis.
Wednesday:
JP Morgan Chase reports earnings
Sept. Housing Starts
Fed. Beige Book Report on economic activity
September Housing Starts
Thursday:
Bank of America reports earnings
Leading Economic Indicators
What It All Means
We continue to have a mixed picture as far as news is concerned and are in a very interesting tug of war between the forces of inflation and a slowdown in the economy.
On the one hand, the retail sales report, while considered good, was essentially flat when you remove gasoline and auto sales, and on the other hand, we have a rising Producer Price Index and energy prices that rose 4.1% last month alone.
Of course, Benny and the Feds are watching all of this closely and will use these inputs to decide their course at their Halloween meeting.
Fed watchers continue to play their "what will the Fed do with rates" game, and the picture is decidedly cloudy today with recent news pointing to rates staying steady at the end of October.
However, I expect that this week's reports will help to substantially clear up the picture and give us a more focused view of what the Feds might do.
But, as always, it's important to remember that Wall Street Sector Selector doesn't trade on news, which tends to be a poor predictor of market action, but rather based on our indicators which give us a view ahead for the next 4-8 weeks.
Sector Spotlight
Almost all sectors are in up trends for the month with International and Energy still leading the way. Homebuilders and Real Estate are in the positive column, and as I mentioned last week, I'm watching these two closely. While it's much too early to take a position in these, it's interesting to watch them come out of the negative column after so many months, especially with all of the negative news surrounding these sectors.
Autumn in Bend has been particularly beautiful this year with the changing leaves exploding across our town. In the mountains, golden aspen are sprinkled throughout the conifer sea, and this Saturday morning, Mount Bachelor glistens snowcapped in the sunshine outside our living room window.
Today my young son and I are heading for Twin Lake for a last night out in our R.V. and then I'll winterize and store it for winter this week. That's always the definitive close of summer around our house and something of a melancholy time. Summer is over and we're heading into the darker months, but looking at the snow capped mountain, it's exciting to think of ski season just ahead.
If you compare a human life span of 84 years to the calendar, October would be the start of a person's 64th year. It's a beautiful month, and for many people I know, a beautiful time of life.
My goal with Wall Street Sector Selector is to make all our months and years truly golden, and I greatly appreciate your confidence and trust in that important endeavor.
Have a great weekend.
Your partner in prosperity,
John Nyaradi
Publisher
Wall Street Sector Selector
http://rs6.net/tn.jsp?t=95n8pfcab.0.0.eou954bab.0&ts=S0289&p=http%3A%2F%2Fwww.wall-street-sector-selector.com%2F&id=preview
Thursday, October 25, 2007
Prepping for Monday
October 20, 2007
Hi, Friends,
Not a good week last week, made worse by the media's incessant fear mongering about the 20th anniversary of Black Monday on October 19, 1987.
But, for us, the market action and talking heads' speculations are nothing more than background noise. And that's the terrific advantage of having a proven, non emotional trading plan in place that we can depend on in good times and bad.
Since September 4th, we've been on a heady roll with our portfolio up as high as 19%, to drop back this week to 14.7% compared to 1.8% for the S&P 500.
Year to Date we stand at +20.61% realized and unrealized gains compared to +5.82 for the S&P.
Our indicators accurately called the beginning of this run, and now are flashing some short term weakness. The S&P looks decidedly high risk short term, and although most of our positions are not S&P components, in stressful times, all markets around the world move as one.
To respond, we'll be tightening our stops for Monday morning. Subscribers need to watch for your Stop Loss Update later today and have your stops in place before market open on Monday. The closer you are able to follow the system's entry and exit points, the more likely your chances of success.
In spite of the short term weakness, all up trends in our positions remain firmly in place.
The View from 35,000 Feet
This week's sell off was prompted by the poor earnings reports from the financials and industrials. Everyone knew there were big hits coming due to the sub prime morass but the reality of billion dollar write offs was a staggering hit to the markets, sending the DOW down 360+ points on Friday and -2.64% for the day and -4% for the week. The S&P did no better, down -2.56% on the day and -3.9% for the week.
A strong whiff of fear was in the air as investors mulled over the weak earnings, the weaker dollar and oil breaking the $90/bbl. mark.
More and more the talk is of recession as the housing woes spill over into the general market. And this story isn't over yet as the majority of the sub prime resets to higher interest rates are scheduled for first quarter next year.
Reflecting this reality, Fed Chairman "Gentle Ben" Bernanke on Monday said that the negative pull of housing on the economy was getting worse and would hurt growth for the Fourth Quarter and into 2008.
As I wrote last week, Benny and his Merry Band of Feds are between a rock and a hard place, worrying about inflation while having to cut interest rates to prevent a recession in a Presidential Election year. All indications now point to the rock getting bigger and the hard place getting harder. As the bad news unfolded this week, the Fed meeting on Halloween looms ever larger in the background.
The Week Ahead
Next week will have more than 160 companies reporting earnings. More than 120 have reported so far and earnings growth is in the negative column.
We'll also see some important reports with September Durable Goods, weekly jobless numbers and home sales reports that will give investors plenty of data to chew on.
What It All Means
Clearly, the economy is slowing. The sub prime melt down is spreading past financials, and since financials are widely represented on the S&P, that broad indicator will experience downward pressure. Oil and the high price of gasoline will act like a tax on the consumer and so it's hard to make a case for robust growth over the next few months.
All of this points to Benny and his Merry Band of Feds and their Halloween meeting. More bad news this week could easily lead to a rate cut and a month end rally. Will it be trick or treat? No one can make that call, but we'll be ready for either eventuality.
My view is that a recession in 2008 is so politically unpalatable that we'll see plenty of Fed intervention in hopes of making the proverbial soft landing.
There has not been a losing pre-Presidential year since 1939, and I think it's likely that this year will hold true to trend.Sector Spotlight
The hot sectors this week were energy, commodities and gold, but most sectors ended up in the negative column with Real Estate, Financials and Home Construction being the bottom feeders. The rally in Real Estate and Home Construction proved to be short lived as "Gentle Ben" gave his outlook for more problems ahead and sent those sectors into the basement for the week.
This weekend we're in Hood River, Oregon, for a swim meet with my young son and the Hood River Fall Festival. If you've never been here, Hood River is a quaint little town on the banks of the Columbia River with a rural valley setting affectionately known as "the fruit loop" to sightseers.
The fall foliage brings a ton of "leaf peepers," and from the valley you can see the snowy volcanic peaks of Mt. Hood to the south and Mt. Adams across the river to the north. Framed in brilliant yellows and reds, it's truly a spectacular setting.
For ten years we've come here, watching the kids swim and stopping at Rasmussen's Farm for pumpkins, caramel apples, boxes of pears and spruce beer, a local "delicacy."
It's always a fun time, and as the leaves blow across the wet ground, the salmon return home to their spawning grounds in Hood River and goblins start showing up on front lawns, one knows that deep autumn and harvest time are here.
Wishing you the best for a great autumn Sunday and week ahead,
Your partner in prosperity,
John Nyaradi
Publisher
Wall Street Sector Selector
http://rs6.net/tn.jsp?t=6d89yfcab.0.0.eou954bab.0&ts=S0289&p=http%3A%2F%2Fwww.wall-street-sector-selector.com%2F&id=preview
Hi, Friends,
Not a good week last week, made worse by the media's incessant fear mongering about the 20th anniversary of Black Monday on October 19, 1987.
But, for us, the market action and talking heads' speculations are nothing more than background noise. And that's the terrific advantage of having a proven, non emotional trading plan in place that we can depend on in good times and bad.
Since September 4th, we've been on a heady roll with our portfolio up as high as 19%, to drop back this week to 14.7% compared to 1.8% for the S&P 500.
Year to Date we stand at +20.61% realized and unrealized gains compared to +5.82 for the S&P.
Our indicators accurately called the beginning of this run, and now are flashing some short term weakness. The S&P looks decidedly high risk short term, and although most of our positions are not S&P components, in stressful times, all markets around the world move as one.
To respond, we'll be tightening our stops for Monday morning. Subscribers need to watch for your Stop Loss Update later today and have your stops in place before market open on Monday. The closer you are able to follow the system's entry and exit points, the more likely your chances of success.
In spite of the short term weakness, all up trends in our positions remain firmly in place.
The View from 35,000 Feet
This week's sell off was prompted by the poor earnings reports from the financials and industrials. Everyone knew there were big hits coming due to the sub prime morass but the reality of billion dollar write offs was a staggering hit to the markets, sending the DOW down 360+ points on Friday and -2.64% for the day and -4% for the week. The S&P did no better, down -2.56% on the day and -3.9% for the week.
A strong whiff of fear was in the air as investors mulled over the weak earnings, the weaker dollar and oil breaking the $90/bbl. mark.
More and more the talk is of recession as the housing woes spill over into the general market. And this story isn't over yet as the majority of the sub prime resets to higher interest rates are scheduled for first quarter next year.
Reflecting this reality, Fed Chairman "Gentle Ben" Bernanke on Monday said that the negative pull of housing on the economy was getting worse and would hurt growth for the Fourth Quarter and into 2008.
As I wrote last week, Benny and his Merry Band of Feds are between a rock and a hard place, worrying about inflation while having to cut interest rates to prevent a recession in a Presidential Election year. All indications now point to the rock getting bigger and the hard place getting harder. As the bad news unfolded this week, the Fed meeting on Halloween looms ever larger in the background.
The Week Ahead
Next week will have more than 160 companies reporting earnings. More than 120 have reported so far and earnings growth is in the negative column.
We'll also see some important reports with September Durable Goods, weekly jobless numbers and home sales reports that will give investors plenty of data to chew on.
What It All Means
Clearly, the economy is slowing. The sub prime melt down is spreading past financials, and since financials are widely represented on the S&P, that broad indicator will experience downward pressure. Oil and the high price of gasoline will act like a tax on the consumer and so it's hard to make a case for robust growth over the next few months.
All of this points to Benny and his Merry Band of Feds and their Halloween meeting. More bad news this week could easily lead to a rate cut and a month end rally. Will it be trick or treat? No one can make that call, but we'll be ready for either eventuality.
My view is that a recession in 2008 is so politically unpalatable that we'll see plenty of Fed intervention in hopes of making the proverbial soft landing.
There has not been a losing pre-Presidential year since 1939, and I think it's likely that this year will hold true to trend.Sector Spotlight
The hot sectors this week were energy, commodities and gold, but most sectors ended up in the negative column with Real Estate, Financials and Home Construction being the bottom feeders. The rally in Real Estate and Home Construction proved to be short lived as "Gentle Ben" gave his outlook for more problems ahead and sent those sectors into the basement for the week.
This weekend we're in Hood River, Oregon, for a swim meet with my young son and the Hood River Fall Festival. If you've never been here, Hood River is a quaint little town on the banks of the Columbia River with a rural valley setting affectionately known as "the fruit loop" to sightseers.
The fall foliage brings a ton of "leaf peepers," and from the valley you can see the snowy volcanic peaks of Mt. Hood to the south and Mt. Adams across the river to the north. Framed in brilliant yellows and reds, it's truly a spectacular setting.
For ten years we've come here, watching the kids swim and stopping at Rasmussen's Farm for pumpkins, caramel apples, boxes of pears and spruce beer, a local "delicacy."
It's always a fun time, and as the leaves blow across the wet ground, the salmon return home to their spawning grounds in Hood River and goblins start showing up on front lawns, one knows that deep autumn and harvest time are here.
Wishing you the best for a great autumn Sunday and week ahead,
Your partner in prosperity,
John Nyaradi
Publisher
Wall Street Sector Selector
http://rs6.net/tn.jsp?t=6d89yfcab.0.0.eou954bab.0&ts=S0289&p=http%3A%2F%2Fwww.wall-street-sector-selector.com%2F&id=preview
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