The market's movements this week were spooky. The major indices consistently failed to maintain new highs. The volatility index and the U.S. Dollar index, which both have been acting as mirror images of the market, are showing signs of bottoming. On the other hand, this could be much needed consolidation before a big breakthrough of the spring highs. The longer-term analysis seems to suggest a more bullish outlook than the shorter-term.
I entered a new position at the beginning of this week: GMX Resources [GMXR]. It is a very fundamentally solid company at a very very cheap price. The natural gas industry has had trouble making a profit after the breakthrough of horizontal shelf drilling made vast new reserves accessible, but GMXR is in a prime spot to capitalize on this. They have a manageable debt load and a relatively solid uptrend in cash flow over the last decade. This is a technical and a fundamental buy. I'm looking for a return of upwards of 100%, although I'm not headstrong enough not to set a conservative stop. I'm holding MFA & APFC until signs of a longer-term top.
Long MFA, GMXR, APFC