DOW DOWN 300 points on the ISM data- this was expected but the market is swoooning pretty badly today. Recession I thought was priced in. Last week on weak data the market rallied- the jobs growth was negative. The market rallied because the fed is ahead of the curve- cutting rates ferociously already. So this week by the same logic we should ignore bad data. But we are in panic mode again.
To my mind, buy again- Citigroup rebounded to 29.75 last week- is down to 27.25- today - longer term the recovery will take it much higher. Downside looks like 26 to me. Retail stocks rallied way ahead of the market in the last two weeks- all of em are down today. I am looking at Coach again at 30 and KSS (Kohls) at 43.50.
This week maybe technology bottoms out finally- with CSCO reporting on Wednesday. Lets hope John Chambers saves the tech sector- but even if he doesnt I dont think there is not much downside. CSCO at 23 looks cheap. BUT ahead of the earnings its tough buyin any stock today.
I had a bad stock pick- got to talk of the losers too. ITS SIRF- they took it somewhere and annihilated, mutilated, crushed it= down 8 bucks from its lows of 16!!! It missed and guided lower- I guess I got this one wrong, I should apologize for screamin a buy for SIRF. I still think the business is growing- the management screwed up by not fessing up ahead of the earnings- product mix is shifting and theres confusion about its numbers going forward. Competition is eating its margins a bit- as well. I guess BRCM is a safer play- dont think they hammer it down 50% in a day after being at a low of 22. Maybe I would not sell SIRF under 8- but watch for an aquirer to come in - its trading at attractive valuations to say the least-and on the day the market decides to literally KILL it, panic selling can cost you when it does recover! But that was a big ouch!
New picks I am looking at ACM- an infrastructure pick- at 25-looks like a buy. JEC we bought at 73 or so last week. Sold them at 80 yesterday and its down to 75 again. Am a nibbler. VLO we had a good ride from 49 to 60- Its down to 57- am watching for 55. Alcoa looks like a buy at 32.5- !
I am not expecting a rally into the close like other times- as this week brings- more news- and maybe the market bottoms out again- sometime thursday- thats the day when the European central bank meets- will they lower rates as well. That could be a positive.
We have to celebrate the great comeback the market had in the last two weeks- and not sulk when its down so much- just go ahead and buy as buying low and selling high is the only name of the game.
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