[Weekend Summary]
Dear Member:
While one can never be sure, I think the markets have shown a serious propensity to remain bearish for a while. All the major indices were down for the week and each broke through a relatively important level of support. The SP-500 broke support and it looks like the next level down could well be below 1400. The Q's were part of the downsiders club and also have formed a head and shoulders. Meanwhile, volatility has jumped. All in all, while bullish plays may be found, I believe it is time to be very, very selective when entering bullish positions with a finger ready on the trigger for reversals down. In my view, emphasis is on holding cash and/or bearish option positions.
In keeping with my current bearish leaning, I did little this week in Trend Trader. For the bullish trader, I think it is better to be mostly in cash while the market shakes out a bit. I did add a position in the Powershares DB Commodity Index (DBC) which is more a play on wideranging commodities than a single equity.
Two of my other existing positions are essentially income related. Realty Income (O) will be paying $0.12776 per share on August 15th and Evergreen Adv Inc Fd (EAD) continues at the rate of almost 12 cents a share a month.
Palm, Inc. (PALM) has been a big disappointment and Friday it closed below the weekly trend. Absent a bounce early next week, I'm going to have to take my lumps on this one.
Remember it is every bit as important to be in cash (or bearish plays) when a market is dropping. The really exciting thing is that there are going to be some terrific opportunities when it turns back and, in the meantime, there will be some high potential specific opportunities. One thing to consider will be the short ETFs such as DXD, TWM, and QID.
Have a great weekend.
Bill
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