In the last weekend market report I talked about the importance of and relation of greed and fear. It’s a part of trading, it’s a part of market cycles. The greed of nearly free money has long come and go. It’s time for fear to play it’s hand and that begins now.
From last week’s Where Are We in the Greed and Fear Cycle:
"With greed comes pain, with pain comes blame and the blame game ends in fear. Only then can we start discussing a true bottom to a market and I don’t think we’re there yet. As the characters of this housing horror show defended their practices in front of congress last week (where was Greenspan?) it’s quite clear the blame game is in full motion. The public always pays first and now it’s time for the government to make an example out of a few ill intentioned CEO’s. It’s all playing out according to the script and I don’t think we’ve seen the end of this mess until a few of the larger financial/home builder companies go under and a few recognized executives are indicted. "
The last cycle of greed and fear produced such casualties as Enron and Worldcom. Less than a decade later, Bear Stearns (BSC) takes its place in line. Some good comments on what brought down Bear Stearns (BSC)
Can you sense the desperation? With each passing day it seems the Fed is attempting to stave off a firestorm of financial collapse with water balloons, albeit BIG water balloons. .. but eventually someone will get burned. Uh I mean more will get burned. The Fed seems to be running out of water balloon ammo.
Do you believe the flat CPI number of last week? Well do ya? It’s probably just a setup for another big Fed rate cut on Tuesday, more dollar demise, gold rally, oil rally… more of the same. Let’s see what PPI brings Tuesday ahead of the Fed decision. At this point though, interest rates aren’t gonna cut it but oh what a rally we’re gonna have once we get that fear/panic driven shakeout over with.
There is so much intervention and news driven skiddishness out there right now that it’s difficult to place much importance on the charts from day to day, but taking a step back reveals a narrowing trading range on all indices. I won’t go into detail for each chart tonight. What we’re looking at are indices that are holding support of those January lows but prone to failure given Friday’s distribution day and the spiking VIX. Whatevever happens in the early part of next week, it’s going to be one wild ride. Yes, you should still be out of this market for the most part!
::: Model Portfolio :::
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::: Best/Worst Performers :::
– Top 10 Performing Industries For the Week –
1. Manufactured Housing: 7.41%
2. REIT – Healthcare: 5.90%
3. Education & Training Services: 5.00%
4. Catalog & Mail Order Houses: 4.79%
5. Banks – Pacific: 4.45%
6. Long Distance Carriers: 4.40%
7. Silver: 4.25%
8. Banks – SW: 4.20%
9. REIT – Residential: 4.15%
10. Gold: 4.10%
– Top 10 Worst Performing Industries For the Week –
1. Toy & Hobby Stores: -26.15%
2. Health Care Plans: -17.35%
3. Major Airlines: -15.50%
4. Sporting Activities: -7.05
6. Investment Brokerage: -6.80%
7. Diagnostic Substances: -6.55%
8. Drugs Wholesale: -5.65%
9. Technical Services: -5.65%
10. Surety & Title Insurance: -5.55%
– Top 5 Best Performing ETFs For the Week –
1. Central Fund of Canada (CEF) 6.45%
2. Powershares Dynamic Banking (PJB) 6.35%
3. KBW Banking (KRE) 5.80%
4. Market Vectors Gold Miners (GDX) 5.55%
5. SPDR Homebuilders (XHB) 5.50%
– Worst 5 Performing ETF’s –
1. Indonesia Fund (IF) -11.50%
2. Morgan Stanley China (CAF) -11.35%
3.
4. iShares South Korea (EWY) -7.45%
5. iShares Malaysia (EWM) -7.00%
The IPO market remains absolutely dead, but the big one happens this week. The Visa (V) IPO begins trading on Wednesday. I’ll have preview tomorrow night or Tuesday highlighting what others are saying about it and some of my own thoughts on strategy.
This section will now appear as a separate post on Mondays (if there are some interesting IPO’s coming to market).
While 2008 should be a much slower year for IPO’s considering the deterioration of the market, there will continue to be some good companies coming to market here and there. I’ll be highlighting the best IPO’s every Monday.
::: Upcoming Economic Reports (
Monday: Capacity Utilization, Industrial Production
Tuesday: Fed Rate Decision, PPI, Building Permits, Housing Starts
Wednesday: Crude Inventories
Thursday: Initial Claims, Leading Indicators
Friday: None
::: Earnings I’m Watching This Week :::
Monday:
Bear Stearns (BSC)
Wednesday:
China Mobile (CHL)
That was alot of money. I have read that this is just the beginning of fall for many companies. Lets hope we can turn around the economy.