Last week was a week of role reversals, as tech related stocks took a back seat to previously pummeled commodity stocks. The selling in the Nasdaq was particularly intense with semiconductors sustaining significant technical damage. This does not bode well for the market in the coming weeks… but let’s not throw in the towel just yet. Both the Dow and S&P still look very strong and the Nasdaq still has key support intact. What last week’s action should do is increase your skepticism of this bull run at least in the short term. Add to that the volatility of earnings season and it doesn’t make a whole lot of sense to play the market aggressively right now. We’ve had quite a run over the past several months. Take some of those profits to the bank and wait patiently for only the very best opportunities to emerge.
::: Model Portfolio Update :::
With the Nasdaq tumbling a bit last week and the Model Portfolio weighted towards technology, it wasn’t a great week for the Self Investors Model Portfolio. The portfolio was off 2.4% but remains ahead of the .9% YTD gain of the S&P500 with a 3.1% YTD gain. Instead of getting aggressive this week following the Nasdaq break out, I remained cautious ahead of inflation numbers and the first big week of earnings reports; ultimately I sold off positions to preserve capital. Long positions were sold in Las Vegas Sands (LVS), for a quick 18% gain; Comtech Group (COGO) for a 9% gain, Bell MicroProducts (BELM), a QSP trade for an 8% gain and finally the lone losing trade in Gmarket (GMKT) for a 7% loss. My strategy during earnings season with a market on shaky ground will be one of caution. I will not be leveraging with margin over the next month or so and won’t be initiating many core holdings on the long or short side. Any new positions will most likely be ETFs or Quick Strike Profit plays, looking for big profit potential swing trades over a few days. Last week, I initated two more of these trades.
::: Best/Worst Performers :::
– Top 10 Performing Industries For the Week –
1. Agricultural Chemicals: 5.60%
2. Shipping: 5.40%
3. Railroads: 5.35%
4. Lumber/Wood Production: 5.15%
5. Independent Oil & Gas: 4.95%
6. Oil & Gas Drilling & Exploration: 4.60%
7. Residential Construction: 4.55%
8. Oil & Gas Equip & Services: 4.45%
9. Auto Manufacturers – Major: 4.05%
10. Drugs – Wholesale: 4.00%
– Top 10 Worst Performing Industries For the Week –
1. Personal Computers: -7.35%
2. Networking & Comm Devices: -5.80%
3. Semiconductor – Memory Chips: -5.00%
4. Data Storage Devices: -4.85%
5. Semiconductor – Equipment & Materials: -4.60%
6. Internet Software & Services: -.3.85%
7. Semiconductor – Specialized: -3.75%
8. Industrial Equipment Wholesale: -3.55%
9. Diversified Investments: -3.50%
10. Diversified Computer Systems: -3.50%
– Top 5 Best Performing ETFs For the Week –
1. Herzfeld Caribbean Basin (CUBA) 32.30%
2. Morgan Stanley Eastern Europe (RNE) 6.30%
3. Central Fund of Canada (CEF) 5.60%
4. Ishares Maylasia (EWM) 5.55%
5. Ishares Singapore (EWS) 5.00%
– Worst 5 Performing ETF’s –
1. Powershares Dynamic Semis (PSI) -4.80%
2. HLDRS Semis (SMH) -4.50%
3. Ishares Semis (IGW) -4.00%
4. PowerShares Nanotech (PXN) -3.55%
5. Ishares Networking (IGN) -3.30%
::: IPO’s Worth Watching for This Week :::
1. AeroVironment (AVAV): manufacturer of technologically advanced small unmanned aircraft systems (UAS), which are sold to the U.S. Department of Defense. The company designs its small UASs to be man-portable, capable of being launched by one person and operated through a handheld control unit. The unmanned aircraft systems are electrically powered and configured to carry electro-optical or infrared sensors. The company is profitable, growing and has a significant log of backorders. Set to start trading on Wednesday.
::: Upcoming Economic Reports (1/22/07- 1/26/07) :::
Monday: Leading Indicators
Tuesday: None
Wednesday: Crude Inventories
Thursday: Initial Jobless Claims, Existing Home Sales
Friday: Durable Orders, New Home Sales
::: Notable Upcoming Earnings Reports I’ll Be Watching This Week :::
Tuesday: Advanced Micro Devices (AMD), Black Rock (BLK), Centex (CTX), DR Horton (DHI),Coach (COH), EMC (EMC), EZCORP (EZPW), Johnson & Johnson (JNJ), Rediff.com (REDF), United Airlines (UAUA), Yahoo (YHOO)
Wednesday: Allegheny Technologies (ATI), Corning (GLW), Ebay (EBAY), F5 Networks (FFIV), First Cash Financial (FCFS), Alliance Bernstein (AB)
Thursday: AT&T (T), Nucor (NUE), Cash America (CSH), MEMC Electronics (WFR), Sunpower (SPWR), First MarbleHead (FMD), VistaPrint (VPRT), CyberSource (CYBS), Amgen (AMGN), Beazer Homes (BZH), Microsoft (MSFT), Nokia (NOK)
Friday: Caterpillar (CAT)
::: Latest Blog Entries – In Case You Missed Them! :::
– SelfInvestors Blog –
1. T Boone Pickens Thirsty For Water Rights http://investing.typepad.com/tradingstocks/2007/01/t_boone_pickens.html
2. After Market Report – Intel Disappoints, Another Cisco Downgrade Too Much for Nasdaq
http://investing.typepad.com/tradingstocks/2007/01/after_market_re_1.html
3. After Market Report – Nasdaq’s Worst Day Since June 13th, Stock of Day – SEI Investments (SEIC)
http://investing.typepad.com/tradingstocks/2007/01/after_market_re_2.html