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Our research draws its market bias from a combo of Fundamental and Technical evidence. Economic and earning trends are matched against our analysis of price and volume charts, giving us an indication of how friendly or unfriendly the market is behaving. The goal is to identify top growth stocks... More
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  • Bearish Callings 2 comments
    Jun 24, 2010 4:50 PM | about stocks: TEX, CUZ, SPN, CHS, MELI, LULU, DECK, ULTA, JNJ, MRK, BMY

    Clear Distribution, or institutional selling, turns us into Bears.

    Going into Thursday we were on the cusp of shifting our Buyer's Caution as key sectors continued to lose ground.

    No time to wonder how or why things turned bad. It pays to be flexible in this business. That's how we preserve capital.

    In response to our shift in bias we've added CUZ, SPN and CHS to our short positions, which already included TEX.

    Early in the week we saw warning signs from recent breakouts of top Growth Stocks, such as MELI, LULU, ULTA and DECK, to name a few, which failed to hold high ground.

    Consumer Discretionary stocks (XLY) are leading the downside action as the ETF comes within a shade of a new low for the year. Meanwhile, the Consumer Staples (XLP) are showing relative strength, though the ETF is clearly trend-down under its 200-day moving average.

    Elsewhere, it's pretty much the same, with the exception of some drug stocks, like JNJ, MRK and BMY, which eked out gains Thursday.

    Stay tuned,

    Disclosure: Short: TEX, CUZ, CHS, SPN

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Comments (2)
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  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    Doesn't look much like intermediate trading to us, but looks more like attempts to essentially daytrade the markets.. Long on growth stocks breaking out last week, now reversal and short various stocks today. Looks more like attempted momentum ST trading. What are you going to do if da boyz step in to support the market again and try to prop up the markets yet again for the umpteenth time?


    One can lose a lot money get whipsawed back in forth in markets like these that really have almost nothing to do with technicals or fundamentals. Much much easier to just pick a direction (likely down) and sell well-out-of-the-money puts at target prices one would be willing to buy at. Our HAL $15 Jan/11 puts sold in panic sell-off several weeks ago at $1.27 are up well over 60% and we have closed out half already now . Besides we would be more than happy to buy HAL at $15 if they were ever put to us instead of the present $25 price now which is about where you were recommeding HAL HAL is a very good company, just not at $25 but certainly a clear buy at $15. We have traded in and out of HAL, both long and short at least half a dozen times since Dec/08 and literally made tens of thousands on the trades in total, and we would not even remotely consider buying HAL at $25 in these markets. But that's just our view and we have never lost any money on HAL despite numerous trades or sometimes holding it for several years.


    But guess that's what makes the market. We will stick with our approach and presumably you will stick with yours. Good luck with yours, but it just seems to risky to us.
    24 Jun 2010, 08:59 PM Reply Like
  • GSRTrades
    , contributor
    Comments (10) | Send Message
    Author’s reply » We've been buying growth stock breakouts for over a decade - it's an ever so humbling game, but we've been profitable (up +60% for the last couple years.) And aren't afraid to be wrong - hell, we expect it from time-to-time! When the pitch comes we swing or don't. Through time, it's the winners that keep us coming back.


    Last week we were Cautious Buyers, seeing if the recent breakouts would stick. They haven't. With institutional grade selling Thursday, we reversed course and nibbled on some shorts, which are showing a little profit. That's our game. Feel free to check the record on Covestor.


    Great job on HAL.
    25 Jun 2010, 04:31 PM Reply Like
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