Weak hearts stay away from the Market!!!!

I have been busy with work and did not get much time to write about the market. Interesting market movements in the last couple of days forced me again to express my views.

The correction we are seeing in the market is very encouraging and giving you another opportunity to invest.

Don't think I am nuts!!! I believe the bears are underestimating the recovery and spreading the message by these rigged sell offs that we are going back to 660 - 700 on S&P. IT IS NOT HAPPENING!!!! Use these sell offs to target the right companies for investments. I have learned that in this market it is difficult to make money as a trader especially if it is not a full time job. Why even try then? I strongly recommend to pick a direction based on your understanding of the economy and ride it. I believe that we will close the year on high due to the following reasons:

• Not everyone participated in the first leg of the rally and big boys (hedge fund manager) were under invested. Their performance will be measured in 2010 based on how they performed against the S&P 500. They will pile on the stocks which they can justify in buying at the current levels. Some of the strong names are: GS, MS, BAC, MOS, POT, INTC, MSFT, CRM, RIMM, AAPL
• Companies are hiring again and stimulus package is now showing the impact. Some may argue that the recovery will die once the stimulus package impact is over. Well, lets ignore those people.
• I expect a blockbuster holiday season for retailer. Don't get fooled by the consumer sentiment numbers. Look what Amazon, AAPL had to say about the holiday season!!!!

I think the time has come to make a decision whether you want to be out of this market and miss another opportunity or make a tough investment decision which will benefit you for rest of your life!!!!

Time to be ahead of the curve - cont

What we are seeing today is a classical pulback after the earnings season. I hope that most people took some money off the table and locked in their project when S&P was at 1015.

I think that the market will continue to pull back untill we get the big money in from the big boys who missed the rally last time. I think the next S&P support is at 942 if S&P closes below 992.

Don't get long today; just sit back with your cash and enjoy the game. Keep your shopping list ready to ride another rally.

Here is the list: UYM, URE, PXLW, RF, C, MS, FWLT, TEX, IPI

Time to be ahead of the curve!!

I hope someone acted on my recommendations and bought the stocks I listed in my earlier post. S&P was at 880 at that time and now it is at 1015 and going up as I write this blog from a beautiful Virgin Atlantic lounge in London; it does not feel like recession.

This rally still has steam but I am reluctant to go long here. Market has reached the levels where investors start thinking about growth and not recovery. I think the real test is the next quarter where I am expecting a positve GDP number but hey, isn't the stock market suppose to be 6 months forward looking. I think this rally is taking a positive GDP number into account and I don't think we are seeing S&P 1200 anytime soon.

We don't want to be greedy and I recommend taking some money off the table and feel good about it. Another option is to SHORT SPY to hedge your investments.

If the market pulls to 950 levels then I am a buyer again (1/3 of my investment). Keep the follwing stocks in your radar: MRVL, FSLR, URE, PXLW, C, UYM, MOS.

Hope someone is listening!!!!

Cheers!

Watch out transaction volumes today!!! S&P at critical level

S&P is trading at critical levels and has shown some support around 880 levels. It is a difficult market but it is also trying to tell us something. The message is: If you need cash for next 1-2 years then don't jump in the market; otherwise it is time to start thinking about putting some cash to work.
We all are so focused on short term trading patterns and media buzz that we are not focusing on the key indicators that market is giving us for a turnaround. Here are few that I am watching closely:

1: Business inventories are falling shapely which means that when the demand improves the manufacturing will improve
2: Financials are bottoming. GS delivered blockbuster results today and I expect MS,JPM, BAC, WFC to follow the leader. The point is worst is behind the Financials and the long term trend looks up
3: Long term bears are turning bulls and that would mean that the money on the sidelines could start to come into the equities. I say S&P at 1000 by Dec 2009.

BUT, all this could fall apart if unemployment continue to rise.
Happy investing :-). Here are my favorate pics: AAPL, MS, BAC, BSX, FCX, MOS, MRVL, EGLE, MGM, ENER, URE, UYM,

Prepare your shopping list for next upturn!!!

Since my last post S&P has pulled back 5% and now is the time to get some cash into action. Investors should think of buying some good names in commodities and finance while traders should be looking to play the downside by protecting their gains by shorting the market.

In my last post I talked about a significant pull back in S&P to levels 820-840 and now we are seeing the signs with S&P already pulled 5% . In particular, commodities and agriculture have seen a very sharp decline (15-20%). I see potential of 5-10% downside before bulls are back in action.

Stocks have been trading sideways but yesterday was special. Market was down on huge volume and this could be the start of another 5-10% correction. Next couple of days are critical for the market direction and I would keep a close watch on Feds meeting tomorrow where they are expected to keep the key rates on hold.

Here are my plays.

For investors:

1: Look for investments opportunities in finance,alternative energy, technology, commodities and agriculture sectors. I would commit 1/3 on my cash into these names: MS, JPM, WFC, SPWRA, AAPL, MRVL, FCX, MOS, IPI. Another play is UYM, which is a ultra long for metals.

2: I will wait for another 5% pull back from this point to commit 1/3 of my cash. I would be all in if S&P drops below 840.

For traders:

1: I would look at the volumes after feds decision at 2:15 pm before shorting the market. If the VIX continue to go higher then I would play options instead of equities. Some of the options plays are: SPY puts, QQQQ puts. I am not recommending to short individual stocks as I think it is too risky.

Timing the market!

I have been following the capital markets for some time now and I am glad that I started investing right at the beginning of the recession. Like many, I lost some money but what I gained was precious. This kind of market pattern occurs once in decades and I was lucky to witness; invest; and learn from it.

Jumping in a train in smartness but jumping in front of it is foolishness!

The S&P 500 is nearly up 35% from its March lows and many believe that everything is back to normal; just like many believed that the world is coming to an end when S&P was below 700. This kind of optimism or pessimism is the first sign that the market will turn the corners.

S&P is currently trading at ~18X PE, which I think is too bullish and requires a correction for this rally to be real. I think that the S&P will not cross 950 in this rally!!! Get ready for a sharp pull back (S&P around 820-840); we have gone up too far and too quickly. That will be a good opportunity to buy for a long term as things are not as bad as many feared.

Trades for pull back:

S&P 500 June 85 Puts.
FAZ - 3X Financial Bear
Sell covered Call Options to protect your investment in financial which have seen a great rally.

If you have not invested in the market then stay on the sidelines and wait for pullback!!