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Why I'm Happy the Market is Down : Afternoon Market Commentary

|Includes:Gilead Sciences, Inc. (GILD), JPM, MRO, SIRI, VZ


Good Afternoon Readers.  Finally, we are seeing the correction I had been expecting for a while.  I’m surprised it took so long but higher-than-expected weekly unemployment figures and a stronger dollar have given this market a reason to selloff.  Add these Euro concerns to the mix and here we are about 160 points down while I write this.

The dip buyers seem to be waiting on the sidelines at the moment.  I created a watch list and am slowly adding to a few of my positions on this pullback. I still think we “should” selloff more, so I’m not going to overly commit today.  The economy is worse than CNBC likes to inform the small investor. Therefore, I’m speculating poor economic news such as higher-than-expected unemployment figures keeping pressure on the market in the near future. I’m going with that trend and will see if the bears control this market down, to which I’ll start accumulating more for the bounce back up.

In portfolio news, I’m shaving a small amount of GoIP Global (GOIG.PK) off today in case we don’t see a PR tomorrow. We’ve seen a nice increase in PPS this week on low volume. I’ll take advantage of this increase and look to add back on a dip.  This sale does not change my thesis on GOIG at all. I’m active during the day and I look to maximize my profits when possible.  We are all expecting a PR tomorrow, per the February 8th PR, stating something to the effect of Verizon (NYSE:VZ) being ready for the launch, and hopefully an official launch date in that PR as well.  If we don’t receive it tomorrow, I expect some emotional panic sellers bringing the price down to which I’ll take advantage of and buy them back.  Since I have a significant position in GOIG, I am not worried about “missing the ride” as many would argue with me on.  If I had a small position, I wouldn’t take the risk of selling some and potentially missing out on a jump. However, I have a good percentage of my portfolio in GOIG, so I will take advantage of the strength and shave some shares off for a nice profit and look to buy more back on a dip.  Even if it continues to ride up tomorrow, I will not be missing out as my position will still be significant.

Sirius XM (NASDAQ:SIRI) reported earnings today and as I stated in my earnings preview, I expected more downside risk than upside as the recent run-up had priced in the positive earnings.  Kudos to those whom agreed and profited on it. The pressure is not because of the general market, though it doesn't help, since SIRI tends to trade under the radar.  We saw some early volatility to which I sold some shares into. Now, I’m looking to buy back near $1 again while the PPS is under pressure.  I’m going to get caught up on the conference call right now and will evaluate my thesis after that. However, I expect to still be long SIRI after it is all said and done.  The question I have to answer for myself is if I can find stocks with greater short-term potential (what is the opportunity cost?) than SIRI.  If so, I’ll put my cash reserves to work elsewhere and look to patiently add to SIRI overtime.  Nothing is more frustrating than holding a significant position that is stagnant when I could at least be making interest in a money market account.  If I feel SIRI will be stagnant for a while, I’d rather accumulate over a period of time and put my other money to work in better short-term prospects.

I’m looking to add to JPMorgan-Chase (NYSE:JPM), Gilead (NASDAQ:GILD), and Marathon Oil (NYSE:MRO) for my large cap stocks while they are under pressure.  I’m also running a few small trades today as I see some promising bounces in a few small caps.  Today is a much more active day than yesterday for me so I’m going to stay busy.  Thanks for reading Kudrna’s Stock Market Blog.  Good luck out there.


Disclosure: Long GILD, VZ, MRO, JPM, SIRI, and GOIG.PK but positions can change at any time