Technical forecasts have been calling for some sort of correction (me included), but the big unkown is by how much and how severe. If the action continues anything like last week, we won’t be down for long. Despite a round of economic numbers last week that indicate an economy slowing a bit more than expected (who really knows what the heck is going on with the number of jobs?!), the major indices managed to hold their upward trends throughout the week. I’d call it a big victory for the bulls. The weekly pull back occurred on light volume.. just the kind of digestion you want to see. The longer the bulls hold their ground and keep the market in the upward trend, the greater the chance we’ll be off to the races again. However, with the elections on Tuesday and the deteriorating action in leading stocks last week, it pays to be very cautious at this point. The action next week will be pivotal. Stay tuned for the After Market reports during week!
::: Model Portfolio Update :::
The Self Investors Model portfolio was not spared from the carnage of many leading stocks last week (down 5% – now 15.2% YTD), but much of the loss was due to a mistake on my part. Yes, this is a real world model portfolio, not theoretical 🙂 Members see the triumphs and tribulations.. the good, bad and the ugly. It did get ugly last week. It all centered around one stock really – a quick strike profit play in North American Coatings (NGA). As I’ve mentioned many times on the blog and in these reports I RARELY hold through an earnings report, particularly in small, unproven companies. It was never my intention to hold NGA through its report. As I do with all stocks, I check to see when they report earnings and keep a calendar of holdings in the portfolio. If my sources don’t reveal a date, 99% of the time, it’s because the company hasn’t yet released the date. I made the incorrect assumption that the company hadn’t released an exact date but would soon. There was never an official date released, but the company did release earnings on Tuesday morning. Of course they were very good, but the stock fell off a cliff – the theme for many companies last week. I gave the stock some room to run and bounce, but it would never happen and I was forced to close for a large loss which accounted for roughly a 2% loss in the portfolio last week. Needless to say, I’ve implemented a new rule: no more holding companies without an official earnings date during earnings season.
::: Best/Worst Performers :::
– Top 10 Performing Industries For the Week –
1. Nonmettallic Mineral & Mining 6.57%
2. Gold 5.13%
3. Multimedia & Graphics Software 3.86%
4. Security Software & Services 3.11%
5. Music & Video Stores 1.93%
6. Marketing Services 1.85%
7. Insurance Brokers 1.53%
8. Business Equipment 1.50%
9. Movie Production – Theaters 1.37%
10. Synthetics 1.35%
– Top 10 Worst Performing Industries For the Week –
1. Home Furnishing Stores -6.30%
2. Internet Service Providers -5.65%
3. Grocery Stores -5.60%
4. REIT – Residential -5.55%
5. Industrial Equipment Wholesale -4.80%
6. Water Utilities -4.75%
7. REIT – Healthcare Facilities -4.45%
8. Drug Related Products -4.45%
9. General Contractors -4.45%
– Top 5 Best Performing ETFs For the Week –
1. Central Fund of Canada (CEF) 6.10%
2. Market Vectors Gold Miners (GDX) 5.32%
3. Ishares South Africa (EZA) 5.25%
4. Ishares Gold (IAU) 4.95%
5. StreetTracks Gold (GLD) 4.90%
– Worst 5 Performing ETF’s –
1. Global Equity Dividend (IGD) -4.00%
2. SPDR Homebuilders (XHB) -3.85%
3. PowerShares Clean Energy (PBW) -3.80%
4. Turkish Invest Fund (TKF) -3.70%
5. PowerShares Dynamic Retail (PMR) -3.70%
::: IPO’s Worth Watching for This Week :::
Many IPO’s this week, but only 3 worth watching!
1. KBW (KBW): This appears to be the headliner for the week. New York City-based full-service investment bank specializes in the financial services industry, such as banks and insurance companies. KBW’s clients include over 489 financial services companies — 352 companies in the United States and 137 in Europe. And its financials have been growing and solid. Trading set to start on Thursday.
2. ACA Capital Holdings (ACA): New York City-based company providing financial guaranty insurance products to participants in the credit derivatives markets, structured finance capital markets and municipal finance capital markets. The company also offers asset management services to specific segments of the structured finance capital markets. The company is growing quickly with earnings doubling in the past 6 months. Set to start trading Friday.
3. Capella Education (CPLA): an online post-secondary education services company offering doctoral, master’s and bachelor’s degree programs in business, organization and management, education, psychology, human services and information technology. Capella has not shown big growth in the past 6 months but is profitable Trading set to start Friday.
::: Upcoming Economic Reports (11/6/06- 11/10/06) :::
Monday: Public Debt
Tuesday: Consumer Credit, Retail Sales,
Wednesday: Petroleum Status, Mortgage Apps
Thursday: Money Supply, Trade Balance, Import Price Index, Wholesale Trade
Consumer Sentiment (prelim), Jobless Claims
Friday: None
::: Notable Upcoming Earnings Reports I’ll Be Watching This Week :::
Monday: NONE
Tuesday: Fuel Tech (FTEK), True Religion (TRLG), Allis Chalmers (ALY)
Wednesday: Tenaris Steel (TS), Ctrip.com (CTRP), Hologic (HOLX)
Thursday: Comtech Group (COGO), EZCORP (EZPW)
Friday: NONE
::: Latest Blog Entries – In Case You Missed Them! :::
– SelfInvestors Blog –
1. Round of Profit Taking Begins, Leading Stocks Deteriorate
http://investing.typepad.com/tradingstocks/2006/11/round_of_profit.html
** Anything you’d like to see in this report or have suggestions? Just hit your reply button and respond. I’m all ears!