Economic Data Is Improving: SELL, SELL, SELL
Although the Fed will continue QE at its current rate, the market is apparently worried about improving economic data leading to a late 2013 taper. Since when did positive economic data become a negative indicator? What can we do other than follow the price action? I tightened stops on all equity positions going into the Fed's announcement on Wednesday, all of which held with the exception of WisdomTree (WETF). This ended up working in my favor because WETF's stock sold off about 12% today in massive volume. I've readjusted stops in some of my stronger performers in order to allow some fluctuation during these choppy times. That being said, none of my stops put me in a position to lose more than 1% of my total account equity on each position.
I'll start with some positive news, my stronger performers:
- I entered WWWW on 6/7 as the sock looked poised to breakout of a tight, low-volume sideways pattern. This failed, but the pullback between 6/10 and 6/14 occurred on extremely light volume. The stock has advanced roughly 5% this week including an upside close today on an upside reversal with strong volume.
- The reversal today on strong volume in a weak market can be taken as a strong sign of support.
CBOE Holdings (CBOE):
- CBOE has performed well over the last couple of weeks. Today's drop on above avg volume was about par for the course. I'm slightly green on the position and holding a stop around 4% below my entry.
Financial Engines (FNGN):
- After outperforming for the entirety of this year's uptrend, HTZ is showing some sideways consolidation around 50-day support with heavier volume on down days versus up days, probably signaling profit taking.
- HTZ is due for consolidation. My stop is just under today's close and will not be adjusted. Should we catch a bounce tomorrow, I plan on using the opportunity to close the position.
- Very strong fundamentals and growth prospects. Suffering from a rough market.
- Adjusted my stop to around 5% of entry.
- Another fantastic potential growth stock with excellent increasing earnings and sales numbers. Increase in fund ownership also excellent.
- INVN also has a strong "N" factor (N as in caN slim). They are strongly positioned for the trend in motion sensor technology for video game consoles, televisions, etc.
- Stop is around 8% of entry.
- This is a purely technical play for me. GRPN looks to be breaking out of a long sideways consolidation. This is a smaller position that I'm giving some room as the stock looks poised for a steady uptrend.
The short term direction of the market is clear. We're due for a correction and it looks like we might get one. Follow your routine -- these types of situations can create opportunities for entries into leading stocks coming out of brief consolidations.