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Michael Kudrna
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"The market can remain irrational longer than you can remain solvent.” John Maynard Keynes In an industry which caters to the greedy and already wealthy, it has become increasingly complex for the individual investor to find a path to success. “Buy and hold” is an inadequate investing... More
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  • 2-5-10 Unemployment Rate Confusion - Morning Market Update  0 comments
    Feb 5, 2010 11:32 AM | about stocks: KOOL, CBAI, AAPL, GLD, CTIC

    9:30am  (originally posted on Kudrna's Stock Market Blog)  

    Job numbers came out today and there is some well deserved confusion out there on how to understand them.  Some members on CNBC are trying to tell everyone it’s a positive number.  They are saying that the unemployment rate went down from 10% to 9.7%.  Great news, right?  We are on the right track, right?  Well how would you feel about those numbers if you knew that they changed the formatting of the survey (and seasonal adjustments) and if they kept the same format, we’d be at 10.6%? Not so happy about these numbers anymore, are you?  You have to love these pundits.  Telling you everything is OK when we are in a bear market sells better than telling you that the bears are in control right now.  Yea, I want to be bullish as well but it seems only I wouldn't be able to sleep at night if I was to tell you not to worry and start buying today. 

    The bears are showing some control today because fear is still in control.  We received a weak bounce that failed and we are doing it again as I’m typing this as we are about even in the Dow.  I think it will be a failed bounce again but I don’t necessarily think we have that far to drop just yet.  Yesterday was terrible and I think we will trade in a short range for a while with a bull/bear struggle for control over next week.  Basically, it could turn out to be a decent traders market for the near future.

    If we gain any strength today, I’m going to look to sell some shares into strength to protect my capital and to sit in some cash to have the opportunity to buy back closer to the bottom when I see some upward momentum.   Fighting the downtrend or gambling on a big reversal is not something that is a part of my Portfolio Management System.  I’m not willing to create a position in Apple (NASDAQ:AAPL) just yet as I’ve discussed I’ve wanted to.  I’ll wait for some more clarity on an upward move before I do so as I don’t want my money to sit in AAPL for a long period of time and it do nothing.

    I initiated a trade in SPDR Gold Trust (NYSEARCA:GLD) again at 104 and will buy on weakness.  I see this number as oversold and in a bear market, Gold should work its way up but with the dollar gaining strength gold and oil continue to be under pressure.  Cell Therapeutics (NASDAQ:CTIC) is down a few points after some negative articles on others thinking the February 10th review will not be a positive one and that they will not get approved by the FDA in April.  I’m still gambling that the review will be positive and that the shorts will try to cover when the news hits but if not, I have tight stops in place and will jump out quickly to protect my capital, possibly as soon as Monday when we could see some documents on the review released.

    Cord Blood America, Inc (OTCPK:CBAI) is fizzling on lack of news.  I’m looking to see if the support around .008 holds before I buy more.  If it doesn’t hold, I expect to be loading up around .059 (the 200 day SMA).

    GoIP Global, Inc (GOIG) is doing a phenomenal job in this bear market.  They are in the green today and It will probably be one of the few stocks I add today.  I want a large position going into the Go800 release later this quarter.  I think this company has some fantastic short and long term potential and want to make this a bigger bet at current prices.  Since these types of stock tend to be volatile, I will still keep room to buy back if it dips.

    Lastly, since I’m on a roll with updates.  Thermogenesis Corp (NASDAQ:KOOL) reported some great numbers last night and jumped about 20% in afterhours.  I’m looking to take a little bit off the table and let the rest ride as I believe the great news hasn’t even been fully priced in yet.

    Be careful not to over commit today regardless what CNBC tells you.  Big losses are made when you anticipate a reversal in a bear market and it doesn’t happen.  Good luck out there.

    Mike



    Disclosure: Long KOOL, CBAI.OB, APPL, GLD, and GOIG but positions can change at anytime
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