The market internals continued to deteriorate and the screened stock ratio has turned negative at 1.8 to 3.8 favoring selling. This puts us up another notch to high risk and "lite" mode. So, we'll cut back our trading. For review, we use "lite" mode to define a state where if you have to trade at all, trade a small number of shares in each position, use tighter stop losses, take profits before the close on positions that are close to your buy point, and limit the number of times you get stopped out without seeing an improving market.
Many of the stocks on the watchlist may move up despite a technology stock slide, but we saw a broadening of the market selling today and it is easy to get stopped out of any sector. There is a future full of good opportunities ahead, just preserve your capital and let the opportunity come to you, rather than chase down an unruly dog.
This is not to imply that there isn't anything on the watchlist that has potential. I have particular interest in Frost Bank (CFR) as I know it from living in Texas, and both MESA and LUV as an airline play, HOV released good earnings and is beaten down, and lastly, I mentioned STJ in the room today as one I would like, so we'll see if they get buying tomorrow.
Note that our only positions at this point are two on the watchlist, PCP and NBTY.
Long: AZO, BDX, CD, CFR, CMX, HOV, FNM, KG, LUV and STJ.
Good Trading!!
Sam
savvy-trader.com |
