Week 4 Performance

Week 4 Performance
Broader market gain: -0.4% Dow -0.3% S&P
LIVEROCKET gain: +0.6%

Year to Date Performance (since inception Nov 3rd)
Broader market gain: 3.8% Dow 4.5% S&P
LIVEROCKET gain: 10%

Weekly Performance
LIVEROCKET beat Dow/S&P: 3 out of 4 weeks
Dow/S&P beat LIVEROCKET: 0 out of 4 weeks
LIVEROCKET tied Dow/S&P: 1 out of 4 weeks

Individual Stock Performance
Stock growth >10% 5 out of 11
Stock Growth 5%~10% 3 out of 11
Stock growth 0%~5% 2 out of 11
Stock growth <0% 1 out of 11


What next?
Earnings season is a good 30+ days away. Until earnings season begins, stocks are at the mercy of occasional news and macroeconomic movements (inflation, oil, Iraq, Iran, holiday season sales, asset re-allocation).

Time to read the tea leaves
We want to see underlying strength: stable or increasing trading volume, price increases, reductions in short ratio, new analyst coverage, tight trading ranges (which can be a sign of reduced volatility), revisiting 52 week highs.
1. Reduction in short ratio: CERN, JBLU and BCSI all saw large reductions in the short positions. This may be a good or a bad. Reduced shorting may mean investors are no longer betting against the stock, which is good. It could also mean that recent price growth is driven in part by short sellers covering their positions. We want to be cautious with these stocks and tighten the Stop prices.
2. Increasing trading volume: CERN, MRVL, JLG
3. Decreasing trading volume: BCSI, PWR.
4. Stocks growing for the week: BCSI, WFMI, MRVL
5. Stocks revisiting 52 week highs: PWR, WFMI, CERN, MRVL, JLG, GYI
• BCSI – Trades in a 10% zone that is tightening to 5%. It is still recovering from a 20% drop in price.
• PWR –Some slowdown in volume trading. Trading in a 3% range mostly flat
• WFMI – Trading in a very narrow 3% range, mostly upwards.
• GILD - Trading in a 10% range. It seems to be softening a bit and we need to watch.
• CERN – Trading in a 5% range, mostly upward.
• MRVL – Trading in a 5%~10% range mostly upward
• JLG – Trading in a 3% range, mostly upward
• GYI – Trading in a 3% range, mostly upward
• JBLU – Trading in a 5%~10% range, very volatile and driven by oil. Underlying stock price seems soft.
• DESC – Trading in a 10% range.

Specific actions:
Hold or accumulate: BCSI, WFMI, JLG, MRVL, GYI, JBLU
Get defensive: PWR, CERN, DESC
PWR – Interest is flagging and the stock is flattening showing very little volatility. Tighten Stop.
GILD – I think Gilead will trade in the $50~$60 zone until earnings season picks up.
CERN – Could be slowing down. Tighten Stop.
JBLU – I think they will blow away earnings. Oil prices are easing and I think holiday travel will be amazing for them. Ignore stock price weakness. Wait until earnings season and they will be back above $21.
DESC – I see some weakness here. Tighten stop and maybe sell.

I will suggest 3 stocks that we want to have on deck in the event we decide to leave DESC and CERN.

New Stop Loss Prices
BCSI $42
PWR $13.7
WFMI $145
GILD $50
CERN $93
MRVL $53
JLG $42
GYI $89
JBLU $17.5
DESC $9.2


Overall
I think that we will end the year on a positive note. Oil is moderating and inflation is mild. The Iraqi end game is beginning. Iran is a major wild card. They will continue to try and create problems. Nevertheless, holiday sales will be very strong for online retailers. Holiday travel will also show strength.