Preparing for the week
The massive overselling of the past five weeks is over. Friday as a down day was, I believe, more a sign of options expiring than a retreat. As such, I am of the opinion that all weak hands have been shaken out and money managers and hedge funds will be moving back in.
Tuesday will be an interesting day - the housing figures for May are released. We already know from home builders that the market is softening faster than expected (it always does). If the numbers are significantly worse, that's good news and bad news. It's good news from the inflation standpoint - lower demand for raw materials leads to softer prices and less reason to raise interest rates. It's bad news because it signals downstream problems for durable goods purchases and other economy drivers.
I believe that this economy is strong. We are operating at over 3% GDP AFTER the ratee hikes. And the other world economies are similarly strong. I am going to go long this week, and I am taking the following strategy:
1. Avoid financial institutions. I don't like the impact of a slowdown in financing
2. Avoid anything related to housing infrastructure
3. Continue to focus on energy
First, I looked for stocks that have shown resilience in the face of the last week. I wanted mid-cap or large-cap companies with average daily trading volume at least 300K shares.
JBLU - this one looks especially solid
T - expect more revenue as the regulations solidify
BIDU
VOLT
VALU
GOOG
DIS
MDR
SIMC
OMNI
EMT
TTI
MIG
BSY
CELG
Second, I looked at stocks that appear to be rebounding
GRP
ZRAN
EXPD
CCJ
TIE
I also want to continue to suggest ZOLT and JLG. ZOLT was recently told that their wind farms interfered with US military efforts. That is political and will go away, adding to the company's value. JLG looks to be the best buy I can spot out there, after TIE and GRP. In any case, after 5 weeks of massive selling and no news, I think this one will re-bound after this quarter's results.
I also still love DO & ESV because their business is so rock solid, as well as JOYG and GRP.
Tuesday will be an interesting day - the housing figures for May are released. We already know from home builders that the market is softening faster than expected (it always does). If the numbers are significantly worse, that's good news and bad news. It's good news from the inflation standpoint - lower demand for raw materials leads to softer prices and less reason to raise interest rates. It's bad news because it signals downstream problems for durable goods purchases and other economy drivers.
I believe that this economy is strong. We are operating at over 3% GDP AFTER the ratee hikes. And the other world economies are similarly strong. I am going to go long this week, and I am taking the following strategy:
1. Avoid financial institutions. I don't like the impact of a slowdown in financing
2. Avoid anything related to housing infrastructure
3. Continue to focus on energy
First, I looked for stocks that have shown resilience in the face of the last week. I wanted mid-cap or large-cap companies with average daily trading volume at least 300K shares.
JBLU - this one looks especially solid
T - expect more revenue as the regulations solidify
BIDU
VOLT
VALU
GOOG
DIS
MDR
SIMC
OMNI
EMT
TTI
MIG
BSY
CELG
Second, I looked at stocks that appear to be rebounding
GRP
ZRAN
EXPD
CCJ
TIE
I also want to continue to suggest ZOLT and JLG. ZOLT was recently told that their wind farms interfered with US military efforts. That is political and will go away, adding to the company's value. JLG looks to be the best buy I can spot out there, after TIE and GRP. In any case, after 5 weeks of massive selling and no news, I think this one will re-bound after this quarter's results.
I also still love DO & ESV because their business is so rock solid, as well as JOYG and GRP.
posted by Andrew at
8:53 AM
2 Comments:
So the question remains. with all this cash, where do we put it ;)
Cash is a position
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