Rough Start to 2008
Friday, January 11, 2008
It has been almost two weeks since my last post on the Greenback Consulting blog - I apologize for the delay. My cable TV and internet went on the fritz right around the time of my last post, and I give a big wag of my finger to Time Warner Cable (NYSE: TWC) for turning a routine repair into a customer service nightmare. By the time the cable was fixed I relocated to Texas. I am still trying to get used to the market being open 8:30am - 3:00pm local time. I actually am very curious now about hedge funds and trading firms on the west coast... their US trading hours are 6:30am - 1:00pm. That aside, I finally received my new Sirius Satellite (NASDAQ: SIRI) antenna in the mail, so I can finally follow along with CNBC and Bloomberg again. I know, I know... these stations are mostly noise that make trading markets intelligently more difficult; but I am addicted to it anyway, what can I say?
Quite simply, the market is a mess. The chart of the S&P 500 isn't very promising at all.
The dreaded "death cross" occurred toward the end of December. That is when the 50-day moving average cross below the 200-day moving average. The index broke both its August and November closing lows, and has yet only to test the August intra-day low. Honestly, I don't think this is a triple bottom like some optimists want to believe, I think this is a major break down.
I don't think we've hit capitulation. My "capitulation basket" consisting of three stocks: NYMEX Holdings (NYSE: NMX), Altria Group (NYSE: MO), and Chevron (NYSE: CVX) aren't signaling that the market has engaged in panic selling. NYMEX is still in its trading range and Altria and Chevron are near their all-time highs. It really is just a hard market to make money in being long stocks. The Greenback Consulting portfolio has gone long the Proshares Ultrashort Russell 2000 ETF (AMEX: TWM) as a hedge against the painful decline in the market. I really agree with Karen Finerman (of Fast Money) on this point: in this market, the last group of stocks you want to own are the small-caps, regardless of sector or business.
Posted by Rob Pitingolo 11:37 PM
2 comments:
- At January 12, 2008 6:11 PM Trading Goddess said...
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Rob,
Sorry to hear about your troubles! waaaaa!
But glad to see you back!
Here's to a happy, healthy and prosperous New Year! - At January 12, 2008 6:45 PM Rob Pitingolo said...
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Hi Trading Goddess, thanks for checking in! Happy trading in 2008 to you too!
