Today is the last trading day of the third quarter. Window dressing was on this week. That means portfolio managers bought the winners and sold the losers, sort of, to look good on paper. SO by extension next week will be exact opposite as they buy the losers that have potential of becoming winners and sell the winners that have run up enough.
In our trade, I have been buying the losers all along- housing for instance. DHI we had a good trade of buying at 13.8 and getting out at 16.5. Guess what some more housing numbers dismal they must be, pushed the stock all the way to under 13 and we picked up some more. Its still 13 today but technically when the relief breeze for housing blows one of these days again when they start talkin of more Fed easing... we know the stock goes upto 16.5 again if not more. Low downside is my idea of safe investing. God willing the company should not go bankrupt until next year if at all. Ha.
SIRF turned back and rallied again. Lovely. 18.50 brings me 21.5 today. Who said buy and hold was good. I love the stock, the sector, the lack of momentum that affords it to be trading at a low valuation. This one is ready to break out- this time it will go to 25 and then head for 30. Too much attention goin to GRMN, making a 52 week high every day- 122.78 today and once SIRF gets noticed it will soar is my humble opinion.
Dow 14000 -seeing it on the radar- maybe if people wake up a bit aftr a lack luster start, it may happen today itself. Or next week surely. Monday 10.20 am says my crystal ball, DOW will be close to 14050. Who is to stop me from dreaming. But seriously, it does seem a bit dicey with earnings for the 3rd quarter coming up as well.
Technology is my sector pick for the next quarter. Energy seems to be at a peaky level. Oil near term tops at $85. And gold maybe stops at $750 though momentum can take it closer to $800 but not over that. But the money to be made in gold and energy is done for now is what I feel. With housing and finance in nervous mode, retail too dependent on the consumer, leaves technology safe and sound. The ones that have not rallied as much as the leaders will catch up so I would be in those. The leaders like AAPL, RIMM, GOOG are too high for my trading picks. If at all I may short them for they will fall harder if the market were to turn around and retreat. Would not be a bad idea to buy puts on the high fliers to hedge the longs.
Next week will be prepared to sell the winners and be in cash before the earnings start pouring out. At least sell half my positions and that will raise cash to buy the ones that get hammered too bad.
Lets cheer for the mad market, albeit, stellar and upbeat and near record levels... thats the spirit. VOILA....HALLA...HOO.
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