The market seems to be tilting lower across the board, with futures representing about a 1% decline at the open. I wouldn't be suprised to have a big down day today, since we went at 800 strong on the S&P; however, failed to close above. As for S&P ranges, I see best case scenario about 12.5% up on the near term and the worst case scenario about -25%.
If I was constructing a trading portfolio and trying to snatch gains, I would have at least 30% in cash, with about 35-40% short, and 30-35% long. I have about 90% in cash because I don't want to lose my hard earned YTD gains (+127.11%). Frankly, I have had a year were I closed up well but nothing like this, so I am scared really and don't wanted to make a huge mistake and lose it.
As for longs, I would look at TTWO and other video games makers like ERTS and ATVI. ERTS has a $21 12-month price target by the Wedbush Morgan analyst; however, TTWO, in my view, is a better play.
As for shorts, I would look to sell short MAC, FRT, PLD, DRR, FR and WRI. I also don't like select regional banks like ZION, CATY, PACW, and FTBK.
I would use strength to take some profits (not all) and also as a time to build into a short position. If I was looking to short or even build into a long position (for a long period of time), I would not commit more than 40% to the position. For example, if I was buying 1,000 shares of INTC, I would not buy more than 400 shares (I wouldn't buy more than 250 but thats me)because I believe we are going lower, in due time.
Update: futures turning up
Subscribe to:
Post Comments (Atom)
Had some extra profits on Intrade so I backed the truck up on DOW -25, -50, and -75 contracts hoping for your predicted Friday sell-off. We'll see...no biggie if some of those don't hit. All I need is a couple more downtrends like the one we just had (1235pm-1255pm).
ReplyDeleteOnce again thank you RF. Covered all the DOW shorts for monster gains.
ReplyDeletenice play brother
ReplyDelete